-----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, Jl4/jdWzG0IW/HTdyxdzWNhFbeqOAOxEhynTnthB7fkq0GBS0Desme6iQs09IGri hdT6jfShwfv5tCGfSDiaZA== 0000912057-99-009596.txt : 19991217 0000912057-99-009596.hdr.sgml : 19991217 ACCESSION NUMBER: 0000912057-99-009596 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19991124 ITEM INFORMATION: FILED AS OF DATE: 19991216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: 3TEC ENERGY CORP CENTRAL INDEX KEY: 0000903267 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 631081013 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-14745 FILM NUMBER: 99775685 BUSINESS ADDRESS: STREET 1: 1221 LAMAR ST STREET 2: SUITE 1020 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 7137596808 MAIL ADDRESS: STREET 1: PO BOX 390 CITY: MOBILE STATE: AL ZIP: 36602 FORMER COMPANY: FORMER CONFORMED NAME: MIDDLE BAY OIL CO INC DATE OF NAME CHANGE: 19930504 8-K/A 1 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): NOVEMBER 24, 1999 3TEC ENERGY CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 0-21702 76-0624573 - -------- ------- ---------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) Two Shell Plaza, 777 Walker, Suite 2400, Houston, Texas 77002 (Address of principal executive offices and zip code) (713) 222-6275 Registrant's telephone number, including area code MIDDLE BAY OIL COMPANY, INC. 1221 Lamar, Suite 1020, Houston, Texas 77010 Former Name and Address ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS As discussed in Item 5 of Form 8-K filed with the commission on December 6, 1999, on November 24, 1999 Middle Bay Oil Company, Inc., now known as 3TEC Energy Corporation (the "Company") filed a Certificate of Incorporation of 3TEC Energy Corporation ("3TEC") and a Certificate of Merger of the Company into 3TEC with the Delaware Secretary of State. The Certificate of Incorporation of 3TEC authorizes 60,000,000 shares of common stock and 20,000,000 share of preferred stock. In the Form 8-K filed with the commission on December 6, 1999, the Certificate of Designation of Series B Preferred Stock of 3TEC, the Certificate of Designation of Series C Preferred Stock of 3TEC and Certificate of Merger of Middle Bay Oil Company, Inc. into 3TEC Energy Corporation were inadvertently omitted. (c) Exhibits. The following exhibits are filed herewith and are incorporated herein by reference: 3.1 Certificate of Designation of Series B Preferred Stock of 3TEC Energy Corporation 3.2 Certificate of Designation of Series C Preferred Stock of 3TEC Energy Corporation 3.3 Certificate of Merger of Middle Bay Oil Company, Inc. into 3TEC Energy Corporation 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 hereunto duly authorized. 3TEC Energy Corporation (Registrant) Date: December 16, 1999 By: /s/ Floyd C. Wilson Floyd C. Wilson President, Chief Executive Officer and Chairman of the Board EXHIBIT INDEX: The following exhibits are filed herewith and are incorporated herein by reference: 3.1 Certificate of Designation of Series B Preferred Stock of 3TEC Energy Corporation 3.2 Certificate of Designation of Series C Preferred Stock of 3TEC Energy Corporation 3.3 Certificate of Merger of Middle Bay Oil Company, Inc. into 3TEC Energy Corporation EX-3.1 2 EX-3.1 Exhibit 3.1 CERTIFICATE OF DESIGNATION of SERIES B PREFERRED STOCK of 3TEC ENERGY CORPORATION --------------------- Pursuant to Section 151 of the General Corporation Law of Delaware --------------------- 3TEC ENERGY CORPORATION, a corporation existing under the laws of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY that, pursuant to the authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation of the Corporation (the "Certificate of Incorporation") and in accordance with Section 151 of the General Corporation Law of the State of Delaware ("DGCL"), the Board of Directors of the Corporation on October 1, 1999 duly adopted the following resolution establishing and creating a series of its Preferred Stock, par value $.02 per share, designated "Series B Preferred Stock". RESOLVED, that pursuant to authority vested in the Board of Directors of the Corporation (the "Board of Directors") in accordance with the provisions of its Certificate of Incorporation (the "Certificate of Incorporation"), a series of Preferred Stock, par value $.02 per share, of the Corporation is hereby created, and the designation and number of shares thereof and the preferences, limitations and relative rights thereof are as follows: 1. DESIGNATION, NUMBER OF SHARES AND STATED VALUE OF SERIES B PREFERRED STOCK. There is hereby authorized and established a series of Preferred Stock that shall be designated as "Series B Preferred Stock", and the number of shares constituting such series shall be 266,667. Such number may be increased or decreased, but not to a number less than the number of shares of Series B Preferred Stock then issued and outstanding, by resolution adopted by the full Board of Directors. The "stated value" of the Series B Preferred Stock shall be $7.50 per share. 2. CERTAIN DEFINITIONS. "COMMON STOCK" means, collectively, the Corporation's Common Stock, par value $.02 per share, and any capital stock of any class of the Corporation hereafter authorized which is not limited to a fixed sum or percentage of par or stated value in respect to the rights of the holders thereof to participate in dividends or in the dissolution of assets upon any liquidation, dissolution or winding up of the Corporation. "JUNIOR SECURITIES" means any of the Corporation's equity securities other than the Series B Shares. "LIQUIDATION VALUE" of any Series B Share as of any particular date will be equal to the sum of $7.50 plus, in the event of any liquidation, dissolution or winding up of the Corporation, any declared but unpaid dividends on such Series B Share shall be added to the Liquidation Value of such Share on the payment date in any liquidation, dissolution or winding up accrued to the close of business on such payment date. "PERSON" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "SERIES B SHARE" means a share of the Series B Preferred Stock. 3. DIVIDENDS; CAPITAL. A. GENERAL. When and as declared by the Corporation's Board of Directors and only to the extent permitted under the DGCL, the Corporation may, but is not required to, pay dividends to the holders of its Series B Preferred Stock; however, the Corporation shall not be restricted from declaring and paying dividends to the holders of any Junior Securities out of funds lawfully available for payment of such dividends. B. CAPITAL. Upon issuance of any Series B Preferred Stock, the entire consideration received therefor shall be allocated to the "capital" of the Corporation, and the Corporation shall take no action to reduce its capital in respect of the Series B Preferred Stock below the Liquidation Value of all outstanding Series B Preferred Stock. 4. LIQUIDATION. Upon any liquidation, dissolution or winding up of the Corporation, subject to the conversion rights set forth in Paragraph 5. hereof, the holders of Series B Shares will be entitled to be paid, before any distribution or payment is made upon any Junior Securities, an amount in cash equal to the Liquidation Value (including the amount of declared but unpaid dividends, if any) of all Series B Shares outstanding. If, upon any such liquidation, dissolution or winding up of the Corporation, the Corporation's assets to be distributed among the holders of the Series B Shares are insufficient to permit payment to such holders of the aggregate amount which they are entitled to be paid, then the entire assets to be distributed in respect of such Series B Shares will be distributed ratably among such holders based upon the Liquidation Value of the Series B Shares held by each such holder. The Corporation will mail written notice of such liquidation, dissolution or winding up not less than 60 days prior to the payment date stated therein, to each record holder of Series B Shares. Neither the consolidation or merger of the Corporation into or with any other corporation or corporations, the sale or transfer by the Corporation of all or any part of its assets nor the reduction of the capital stock of the Corporation will be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Paragraph 4. 5. CONVERSION. A. CONVERSION BY HOLDER. (1) Until December 31, 2002 (the "Conversion Period"), any holder of Series B Shares may convert all or any portion of the Series B Shares held by such holder into shares of Common Stock (i) at a ratio of one share of Common Stock for each Series B Share or (ii) pursuant to the Alternative Conversion Method based on Cumulative Value, as described and defined in and in accordance with Section 2.9 of that certain Agreement and Plan of Merger dated June 20, 1997 among Middle Bay Oil Company, Inc., Shore Acquisition Company, Shore Oil Company and its shareholders, which Section 2.9 is incorporated herein. (2) Upon the expiration of the Conversion Period, unless the Corporation has given prior notice of intent to redeem the Series B Shares pursuant to Paragraph 7., all outstanding Series B Shares shall be automatically converted pursuant to Paragraph 5.A(1)(i) or 5.A(2)(ii), whichever provides for a greater conversion ratio. (3) Any conversion will be deemed effected (i) at the close of business on the date which the certificate or certificates representing the Series B Shares to be converted have been delivered by the holder to the Corporation at its principal office, together with a request for conversion of such Series B Shares, or (ii) upon the last day of the Conversion Period if the Series B Shares are converted pursuant to Paragraph 5.A(2)(ii). (4) In no event shall the aggregate total number of Shares of Common Stock into which the Series B Shares are converted exceed 1,333,333 Shares (except as that number may be adjusted pursuant to Paragraph 6). B. CONVERSION PROCEDURES. (1) At such time as a conversion has been effected, the rights of the holder of such Series B Shares as such holder will cease and the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock are to be issued upon such conversion will be deemed to have become the holder or holders of record of the shares of Common Stock represented thereby. (2) As soon as possible after a conversion has been effected, the Corporation will deliver to the holder of Series B Shares being converted: a. A certificate or certificates representing the number of shares of Common Stock issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified; and b. A certificate representing any Series B Shares which were represented by the certificate or certificates delivered to the Corporation in connection with such conversion but which were not converted. (3) The issuance of certificates for shares of Common Stock upon conversion of Series B Shares will be made without charge to the holders of such Series B Shares for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such conversion and the related issuance of shares of Common Stock. Upon conversion of each Series B Share, the Corporation will take all such actions as are necessary in order to insure that the Common Stock issuable with respect to such conversion will be validly issued, fully paid and nonassessable. (4) The Corporation will not close its books against the transfer of Series B Shares or of Common Stock issued or issuable upon conversion of Series B Shares in any manner which interferes with the timely conversion of Series B Shares. 6. ANTI-DILUTION PROVISIONS. In the event that the Common Stock hereafter is changed into or exchanged for a different number or kind of shares or other securities of the Corporation or of another corporation by reason of merger, consolidation, other reorganization, recapitalization, reclassification, combination of shares, stock split-up or stock dividend: A. The aggregate number and kind of shares subject to the conversion rights granted hereunder shall be adjusted appropriately; B. Conversion rights granted hereunder, both as to the number of subject Series B Shares and the Cumulative Value, shall be adjusted appropriately; C. Where dissolution or liquidation of the Corporation or any merger or combination in which the Corporation is not a surviving corporation is involved, each outstanding conversion right granted hereunder shall terminate, but the holder shall have the right, immediately prior to such dissolution, liquidation, merger or combination, to exercise his conversion right, in whole or in part, to the extent that it shall not have been exercised; and D. Such new or additional or different shares or securities which are distributed to holder, in his capacity as the owner of Common Stock issued pursuant to the conversion rights granted hereunder, shall be subject to all of the conditions and restrictions applicable to the Common Stock issuable hereunder. The foregoing adjustments and the manner of application of the foregoing provisions shall be determined solely by the Corporation, and any such adjustment may provide for the elimination of fractional share interests. 7. OPTIONAL REDEMPTION. A. Subject to prior exercise of conversion rights by the holder during the Conversion Period, the Series B Preferred Stock may be redeemed, in whole or in part, upon notice given as provided in Paragraph 7.B. (but subject to the terms and conditions hereinafter set forth), at the option of the Corporation, at any time and from time to time after December 31, 2002, at a redemption price of $7.50 per Share, together with any dividends declared and unpaid thereon to the date of redemption (the "Redemption Price"), so long as funds are legally available for such redemption. B. If pursuant to Paragraph 7.A. the Corporation shall redeem any shares of Series B Preferred Stock, the Corporation shall give written notice of such redemption to each holder of record of Series B Shares to be redeemed not less than thirty (30) nor more than ninety (90) days prior to the date fixed for redemption, by certified mail enclosed in a postage-paid envelope addressed to such holder at such holder's address as the same shall appear on the books of the Corporation. Such notice shall (i) state that the Corporation has elected to redeem such Series B Shares, (ii) state the date fixed for redemption, (iii) state the Redemption Price and (iv) call upon such holder to surrender to the Corporation on or after said date at its principal place of business designated in such notice a certificate or certificates representing the number of Series B Shares to be redeemed in accordance with such notice. On or after the date fixed in such notice for redemption, each holder of shares of Series B Preferred Stock to be so redeemed shall present and surrender the certificate or certificates for such Series B Shares to the Corporation at the place designated in said notice, and thereupon the Redemption Price of such Series B Shares shall be paid to, or to the order of, the Person whose name appears on such certificate or certificates as the owner thereof. From and after the date fixed in any such notice as the date for redemption, unless default shall be made by the Corporation in providing for the payment of the Redemption Price pursuant to such notice, all rights of the holders of the Series B Shares so redeemed, except the right to receive the Redemption Price (but without interest thereon), shall cease and terminate. If less than all of the outstanding Series B Shares are to be redeemed, the Series B Shares to be redeemed shall be allocated among the holders thereof in proportion to the respective number of Series B Shares held by them. C. Any Series B Shares redeemed by the Corporation shall be retired. 8. COVENANTS OF CORPORATION. So long as any of the Series B Shares are outstanding, the Corporation shall do all of the following (the "Covenants"): A. Maintain its corporate existence in good standing; B. Maintain the general character of its business and conduct its business in its ordinary and usual manner; C. Maintain proper business and accounting records; D. Comply with and perform all material obligations and duties imposed upon it by federal, state and local laws and all rules, regulations and orders imposed by federal, state or local governmental authorities, except as may be contested by them in good faith by appropriate proceedings; E. Deliver to the holders of the Series B Preferred Shares, within the times required for the filing of SEC Forms 10-K and 10-Q, true and correct copies of the annual and quarterly financial statements of the Corporation, which statements shall be prepared in compliance with the Rules and Regulations of the Securities and Exchange Commission; F. Comply with all financial covenants in all loan agreements or credit facilities to which the Corporation is a party; and G. Timely make all filings and submit all reports required by the Rules and Regulations of the Securities and Exchange Commission. 9. VOTING RIGHTS. The holders of the Series B Preferred Stock shall have no voting rights, other than those rights afforded to them by law. 10. NOTICES. Except as otherwise expressly provided, all notices referred to herein will be in writing and will be deemed to have been given either when delivered personally or three business days after having been mailed by registered or certified mail, return receipt requested, postage prepaid (i) to the Corporation, at its principal executive offices, and (ii) to any stockholder, at such holder's address as it appears in the stock records of the Corporation (unless otherwise indicated by any such holder). 11. REMEDIES. The remedies afforded the holders of Series B Shares in this Certificate of Designation are cumulative and not sole or exclusive. 12. CONFLICT WITH OTHER PROVISIONS. In the event of any conflict between the provisions of this Certificate of Designation and any other provisions of the Certificate of Incorporation, then the provisions of this Certificate of Designation shall govern and control. RESOLVED FURTHER, that the appropriate officers of the Corporation be, and they are hereby, authorized and directed from time to time to execute such certificates, instruments or other documents and do all such things as may be necessary or advisable in their discretion in order to carry out the terms hereof, including the filing with the Secretary of State for the State of Delaware of a copy of the foregoing resolution executed by an officer of the Corporation. Dated November 24, 1999. 3TEC ENERGY CORPORATION By: /s/ Floyd C. Wilson Name: Floyd C. Wilson Title: President EX-3.2 3 EX-3.2 Exhibit 3.2 CERTIFICATE OF DESIGNATION of SERIES C PREFERRED STOCK of 3TEC ENERGY CORPORATION --------------------- Pursuant to Section 151 of the General Corporation Law of Delaware --------------------- 3TEC ENERGY CORPORATION, a corporation existing under the laws of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY that, pursuant to the authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation of the Corporation (the "Certificate of Incorporation") and in accordance with Section 151 of the General Corporation Law of the State of Delaware ("DGCL"), the Board of Directors of the Corporation on October 1, 1999 duly adopted the following resolution establishing and creating an additional series of its Preferred Stock, par value $.02 per share, designated "Series C Preferred Stock". RESOLVED, that pursuant to authority vested in the Board of Directors of the Corporation (the "Board of Directors") in accordance with the provisions of its Certificate of Incorporation (the "Certificate of Incorporation"), an additional series of Preferred Stock, par value $.02 per share, of the Corporation is hereby created, and the designation and number of shares thereof and the preferences, limitations and relative rights thereof are as follows: 1. DESIGNATION, NUMBER OF SHARES AND STATED VALUE OF SERIES C PREFERRED STOCK. There is hereby authorized and established a series of Preferred Stock that shall be designated as "Series C Preferred Stock", and the number of shares constituting such series shall be 2,300,000. Such number may be increased or decreased, but not to a number less than the number of shares of Series C Preferred Stock then issued and outstanding, by resolution adopted by the full Board of Directors. The "stated value" of the Series C Preferred Stock shall be $5.00 per share. 2. CERTAIN DEFINITIONS. For purposes of the Series C Preferred Stock, the following terms shall have the meanings indicated: "AFFILIATE" of a person means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the person specified. "BOARD OF DIRECTORS" shall mean the Board of Directors of the Corporation or any committee authorized by such Board of Directors to perform any of its responsibilities with respect to the Series C Preferred Stock. "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on which state or federally-chartered banking institutions in Houston, Texas are not required to be open. "CALL DATE" shall have the meaning set forth in Paragraph 5.B. hereof. "COMMON STOCK" means, collectively, the Corporation's Common Stock, par value $0.02 per share, and any capital stock of any class of the Corporation hereafter authorized which is not limited to a fixed sum or percentage of par or stated value in respect to the rights of the holders thereof to participate in dividends or in the dissolution of assets upon any liquidation, dissolution or winding up of the Corporation. "CONVERSION RATE" shall initially mean 1.0 to 1.0, subject to adjustment pursuant to Section D. of Paragraph 7. hereof. "CUMULATIVE DIVIDENDS" shall mean all accumulated, accrued and unpaid dividends. "CURRENT MARKET PRICE" of publicly traded shares of Common Stock or any other class or series of stock or other security of the Corporation or of any similar security of any other issuer for any day shall mean the last reported sales price, regular way on such day, or, if no sale takes place on such day, the average of the reported closing, bid and asked prices regular way on such day, in either case as reported on the Small Cap Market of the National Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq") or, if such security is not quoted on such Small Cap Market, the average of the closing bid and asked prices on such day in the over-the-counter market as reported by Nasdaq or, if bid and asked prices for such security on such day shall not have been reported through Nasdaq, the average of the bid and asked prices on such day as furnished by any Nasdaq member firm regularly making a market in such security selected for such purpose by the Chief Executive Officer of the Board of Directors or if any class or series of securities are not publicly traded, the fair value of the shares of such class as determined reasonably and in good faith by the Board of Directors of the Corporation. "DISTRIBUTION" shall have the meaning set forth in Section D(3) of Paragraph 7. hereof. "DIVIDEND PAYMENT DATE" shall have the meaning set forth in Section A. of Paragraph 3. hereof. "FAIR MARKET VALUE" shall mean the average of the daily Current Market Prices of a share of Common Stock during five (5) consecutive Trading Days selected by the Corporation commencing not more than twenty (20) Trading Days before, and ending not later than, the earlier of the day in question and the day before the "ex" date with respect to the issuance or distribution requiring such computation. The term "'ex' date", when used with respect to any issuance or distribution, means the first day on which the share of Common Stock trades regular way, without the right to receive such issuance or distribution, on the exchange or in the market, as the case may be, used to determine that day's Current Market Price. "ISSUE DATE" shall mean December 7, 1999. "JUNIOR SECURITIES" means any of the Corporation's equity securities other than the Series B Preferred Stock or any other series of preferred stock issued as a Parity Stock. "PARITY STOCK" shall have the meaning set forth in Section A. of Paragraph 8. hereof. "PERMITTED COMMON STOCK CASH DISTRIBUTIONS" shall mean cash dividends or cash distributions out of current or accumulated funds from operations (as determined by the Board of Directors on a basis consistent with the policies and practices adopted by the Corporation for reporting publicly its results of operations and financial condition), and cash dividends which result in a payment of an equal cash dividend to holders of the Series C Preferred Stock and Parity Stock pursuant to Section A. of Paragraph 4. hereof. "PERSON" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "SERIES C PREFERRED STOCK" shall have the meaning set forth in Paragraph 1. hereof. "SET APART FOR PAYMENT" shall be deemed to include, without any action other than the following, the recording by the Corporation in its accounting ledgers of any accounting or bookkeeping entry which indicates, pursuant to an authorization of dividends or other distribution by the Board of Directors, the allocation of funds to be so paid on any series or class of stock of the Corporation. "TRADING DAY", as to any securities, shall mean any day on which such securities are traded on the Small Cap Market of Nasdaq or, if such securities are not quoted on such Small Cap Market, in the securities market in which such securities are traded. "TRANSFER AGENT" means such entity as may be designated by the Board of Directors or their designee as the transfer agent for the Series C Preferred Stock. 3. DIVIDENDS. A. The holders of Series C Preferred Stock shall be entitled to receive, when, as and if authorized and declared by the Board of Directors out of assets legally available for that purpose, cumulative dividends in cash in an amount per share of Series C Preferred Stock equal to $.50 per annum, payable semi-annually on March 31 and September 30 (measured by the fiscal year of the Corporation) or on such dates as may be set by the Board of Directors (a "Dividend Payment Date") to holders of record on such date, not more than sixty nor less than ten days preceding such Dividend Payment Date, fixed for such purpose by the Board of Directors (a "Dividend Record Date"). Such dividends shall be cumulative from the Issue Date, whether or not such dividends shall be authorized or there shall be assets of the Corporation legally available for the payment of such dividends. Each such dividend shall be payable to the holders of record of the Series C Preferred Stock, as they appear on the stock records of the Corporation at the close of business on the Dividend Record Date. The amount of Cumulative Dividends on any share of Series C Preferred Stock, or fraction thereof, at any date shall be the amount of any dividends thereon calculated at the applicable rate to and including such date, whether or not earned or authorized, which have not been paid in cash. B. If the Series C Preferred Stock is outstanding for less than any full fiscal year of the Corporation, the holders shall be entitled to receive the amount set forth in Section A. of this Paragraph 3. multiplied by a fraction, the numerator of which a fraction, the numerator of which equals the number of days during such fiscal year that such shares of Series C Preferred Stock were outstanding and the denominator of which is 360. Holders of Series C Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of cumulative dividends, as herein provided, on the Series C Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series C Preferred Stock that may be in arrears. C. So long as any of the shares of Series C Preferred Stock are outstanding, no dividends (other than dividends or distributions paid in shares of or options, warrants or rights to subscribe for or purchase shares of Junior Stock) shall be authorized or paid or set apart for payment by the Corporation or other distribution of cash or other property authorized or made directly or indirectly by the Corporation with respect to any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Stock made for purposes of an employee incentive or benefit plan of the Corporation or any subsidiary) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such stock) directly or indirectly by the Corporation (except by conversion into or exchange for Junior Stock), nor shall any other cash or other property otherwise be paid or distributed to or for the benefit of any holder of shares of Junior Stock in respect thereof, directly or indirectly, by the Corporation unless in each case (a) the full Cumulative Dividends on all outstanding shares of Series C Preferred Stock and any other Parity Stock of the Corporation shall have been paid or such dividends have been authorized and set apart for payment with respect to the Series C Preferred Stock and all past dividend periods with respect to such Parity Stock and (b) sufficient funds shall have been paid or set apart for the payment of the full dividend for the current fiscal year of the Corporation (including any required pursuant to Section A. of this Paragraph 3.) with respect to the Series C Preferred Stock and the current dividend period with respect to such Parity Stock. 4. LIQUIDATION PREFERENCE. A. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, before any assets of the Corporation shall be distributed, paid or set aside for the holders of Junior Stock, the Corporation shall pay cash to the holders of shares of Series C Preferred Stock $5.00 per share of Series C Preferred Stock plus an amount equal to all Cumulative Dividends (whether or not earned or authorized) to the date of final distribution to such holders; but such holders shall not be entitled to any further payment. Until the holders of the Series C Preferred Stock and holders of Parity Stock have been paid this liquidation preference in full, no payment will be made to any holder of Junior Stock upon the liquidation, dissolution or winding up of the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of Series C Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other shares of any class or series of Parity Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of Series C Preferred Stock and any such other Parity Stock ratably in the same proportion as the respective amounts that would be payable on such Series C Preferred Stock and any such other Parity Stock if all amounts payable thereon were paid in full. For the purposes of this Paragraph 4., (a) a consolidation or merger of the Corporation with one or more corporations (b) a sale or transfer of all or substantially all of the Corporation's assets, or (c) a statutory share exchange shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Corporation. B. Subject to the rights of the holders of any shares of Parity Stock, upon any liquidation, dissolution or winding up of the Corporation, after payment shall have been made in full to the holders of Series C Preferred Stock and any Parity Stock, as provided in this Paragraph 4., any other series or class or classes of Junior Stock shall, subject to the respective terms thereof, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series C Preferred Stock and any Parity Stock shall not be entitled to share therein. C. In determining whether a distribution (other than upon voluntary or involuntary liquidation) by dividend, redemption or other acquisition of shares of stock of the Corporation or otherwise is permitted under the DGCL, no effect shall be given to amounts that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of holders of shares of stock of the Corporation whose preferential rights upon dissolution are superior to those receiving the distribution. 5. REDEMPTION AT THE OPTION OF THE CORPORATION. A. Shares of Series C Preferred Stock shall not be redeemable by the Corporation prior to January 1, 2000. Shares of Series C Preferred Stock may be redeemed, in whole or in part, at the option of the Corporation at any time on or after January 1, 2000 out of assets legally available therefor at a redemption price payable in cash equal to $5.00 per share of Series C Preferred Stock plus an amount equal to all Cumulative Dividends, if any, to the Call Date, whether or not earned or authorized, as provided below). B. Shares of Series C Preferred Stock shall be redeemed by the Corporation on the date specified in the notice to holders required under Section D. of this Paragraph 5. (the "Call Date"). The Call Date shall be selected by the Corporation, shall be specified in the notice of redemption and shall be not less than 30 days nor more than 60 days after the date notice of redemption is sent by the Corporation. Upon any redemption of shares of Series C Preferred Stock pursuant to Section A. of this Paragraph 5., the Corporation shall pay in cash to the holder of such shares an amount equal to all Cumulative Dividends, if any, to the Call Date, whether or not earned or authorized. Immediately prior to authorizing any redemption of the Series C Preferred Stock, and as a condition precedent for such redemption, the Company, by resolution of its Board of Directors, shall authorize a mandatory dividend on the Series C Preferred Stock payable in cash on the Call Date in an amount equal to all Cumulative Dividends as of the Call Date on the Series C Preferred Stock to be redeemed, which amount shall be added to the redemption price. If the Call Date falls after a dividend payment record date and prior to the corresponding Dividend Payment Date, then each holder of the Series C Preferred Stock at the close of business on such dividend payment record date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares prior to such Dividend Payment Date. Except as provided above, the Corporation shall make no payment or allowance for accumulated or accrued dividends on shares of Series C Preferred Stock called for redemption or on the shares of Common Stock issued upon such redemption. C. If full Cumulative Dividends on all outstanding shares of Series C Preferred Stock and any other class or series of Parity Stock of the Corporation have not been paid or authorized and set apart for payment, no shares of Series C Preferred Stock may be redeemed unless all outstanding shares of Series C Preferred Stock and Parity Stock are simultaneously redeemed. D. If the Corporation shall redeem shares of Series C Preferred Stock pursuant to Section A. of this Paragraph 5., notice of such redemption shall be given to each holder of record of the shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the Corporation not less than 30 days nor more than 60 days prior to the Call Date. If the Corporation elects to provide such notice by publication, it shall also promptly mail notice of such redemption to the holders of the shares of Series C Preferred Stock to be redeemed. Neither the failure to mail any notice required by this paragraph (4) nor any defect therein or in the mailing thereof, to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to the other holders. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed whether or not the holder receives the notice. Each such mailed or published notice shall state, as appropriate: (a) the Call Date; (b) the number of shares of Series C Preferred Stock to be redeemed and, if fewer than all such shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (c) the place or places at which certificates for such shares are to be surrendered for certificates representing shares of Common Stock; (d) the then-current Conversion Rate; and (e) that dividends on the shares of Series C Preferred Stock to be redeemed shall cease to accrue on such Call Date except as otherwise provided herein. Notice having been published or mailed as aforesaid, from and after the Call Date (unless the Corporation shall fail to issue and make available the amount of cash necessary to effect such redemption, including all Cumulative Dividends to the Call Date, whether or not earned or authorized), (i)except as otherwise provided herein, dividends on the shares of Series C Preferred Stock so called for redemption shall cease to accumulate or accrue on the shares of Series C Preferred Stock called for redemption (except that, in the case of a Call Date after a dividend record date and prior to the related Dividend Payment Date, holders of Series C Preferred Stock on the dividend record date will be entitled on such Dividend Payment Date to receive the dividend payable on such shares), (ii) said shares shall no longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Series C Preferred Stock of the Corporation shall cease (except the rights to receive the cash payable upon such redemption, without interest thereon, upon surrender and endorsement of their certificates if so required and to receive any dividends payable thereon. The Corporation's obligation to provide cash in accordance with the preceding sentence shall be deemed fulfilled if, on or before the Call Date, the Corporation shall deposit with a bank or trust company (which may be an affiliate of the Corporation) that has, or is an affiliate of a bank or trust company that has, a capital and surplus of at least $50,000,000, such amount of cash as is necessary for such redemption, in trust, with irrevocable instructions that such cash be applied to the redemption of the shares of Series C Preferred Stock so called for redemption. No interest shall accrue for the benefit of the holders of shares of Series C Preferred Stock to be redeemed on any cash so set aside by the Corporation. Subject to applicable escheat laws, any such cash unclaimed at the end of two years from the Call Date shall revert to the general funds of the Corporation, after which reversion the holders of the shares of Series C Preferred Stock so called for redemption shall look only to the general funds of the Corporation for the payment of such cash. As promptly as practicable after the surrender in accordance with said notice of the certificates for any such shares so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and if the notice shall so state), such certificates shall be exchanged for cash (without interest thereon) for which such shares have been redeemed in accordance with such notice. If fewer than all the outstanding shares of Series C Preferred Stock are to be redeemed, shares to be redeemed shall be selected by the Corporation from outstanding shares of Series C Preferred Stock not previously called for redemption by lot or by any other method as may be determined by the Board of Directors in its discretion to be equitable. If fewer than all the shares of Series C Preferred Stock represented by any certificate are redeemed, then a new certificate representing the unredeemed shares shall be issued without cost to the holders thereof. 6. STATUS OF SHARES. All shares of Series C Preferred Stock which shall have been issued and redeemed, converted or reacquired in any manner by the Corporation shall be restored to the status of authorized, but unissued shares of Preferred Stock, without designation as to series. 7. CONVERSION. Holders of Series C Preferred Stock shall have the right to convert all or a portion of such shares into shares of Common Stock, as follows: A. Subject to and upon compliance with the provisions of this Paragraph 7., a holder of shares of Series C Preferred Stock shall have the right, at such holder's option, at any time to convert such shares, in whole or in part, into the number of fully paid and nonassessable shares of authorized but previously unissued shares of Common Stock obtained by multiplying the number of shares of Series C Preferred Stock to be converted and the Conversion Rate (as in effect at the time and on the date provided for in the last clause of Section B. of this Paragraph 7.) by surrendering such shares to be converted, such surrender to be made in the manner provided in Section B. of this Paragraph 7.; provided, however, that the right to convert shares of Series C Preferred Stock called for redemption pursuant to Paragraph 5. shall terminate at the close of business on the Call Date fixed for such redemption, unless the Corporation shall default in making payment upon such redemption under Paragraph 5. hereof. B. In order to exercise the conversion right, the holder of each share of Series C Preferred Stock to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Corporation or in blank, at the office of the Transfer Agent, accompanied by written notice to the Corporation that the holder thereof elects to convert such shares of Series C Preferred Stock. Unless the shares issuable on conversion are to be issued in the same name as the name in which such share of Series C Preferred Stock is registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation and the Transfer Agent, duly executed by the holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation and the Transfer Agent demonstrating that such taxes have been paid). Holders of shares of Series C Preferred Stock at the close of business on a dividend payment record date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof following such dividend payment record date and prior to such Dividend Payment Date. However, shares of Series C Preferred Stock surrendered for conversion during the period between the close of business on any dividend payment record date and the opening of business on the corresponding Dividend Payment Date (except shares converted after the issuance of notice of redemption with respect to a Call Date during such period, such shares of Series C Preferred Stock being entitled to such dividend on the Dividend Payment Date) must be accompanied by payment of an amount equal to the dividend payable on such shares on such Dividend Payment Date. A holder of shares of Series C Preferred Stock on a dividend payment record date who (or whose transferee) tenders any such shares for conversion into shares of Common Stock on such Dividend Payment Date will receive the dividend payable by the Corporation on such shares of Series C Preferred Stock on such date, and the converting holder need not include payment of the amount of such dividend upon surrender of shares of Series C Preferred Stock for conversion. Except as provided above, the Corporation shall make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares or for dividends on the shares of Common Stock issued upon such conversion. As promptly as practicable after the surrender of certificates for shares of Series C Preferred Stock as aforesaid, the Corporation shall issue and shall deliver at such office to such holder, or send on such holder's written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such shares of Series C Preferred Stock in accordance with provisions of this Section F, and any fractional share of Common Stock arising upon such conversion shall be settled as provided in Section C of this Paragraph 7. Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of Series C Preferred Stock shall have been surrendered and such notice received by the Corporation as aforesaid, and the person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby at such time on such date and such conversion shall be at the Conversion Rate in effect at such time on such date unless the stock transfer books of the Corporation shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Rate in effect on the date on which such shares shall have been surrendered and such notice received by the Corporation. C. No fractional share of Common Stock or scrip representing fractions of a share of Common Stock shall be issued upon conversion of the shares of Series C Preferred Stock. Instead of any fractional interest in a share of Common Stock that would otherwise be deliverable upon the conversion of shares of Series C Preferred Stock, the Corporation shall pay to the holder of such share an amount in cash based upon the Current Market Price of the Common Stock on the Trading Day immediately preceding the date of conversion. If more than one share shall be surrendered for conversion at 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 full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series C Preferred Stock so surrendered. D. The Conversion Rate shall be adjusted from time to time as follows: (1) If the Corporation shall after the Issue Date (i) pay a dividend or make a distribution on its shares of Common Stock in shares of Common Stock, (ii) subdivide its outstanding Common Stock into a greater number of shares, (iii) combine its outstanding Common Stock into a smaller number of shares or (iv) issue any shares of stock by reclassification of its Common Stock, the Conversion Rate in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or distribution or at the opening of business on the day following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any share of Series C Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock (or fraction of a share of Common Stock) that such holder would have owned or have been entitled to receive the number of shares of Common Stock (or fraction of a share of Common Stock) that such holder would have owned or have been entitled to receive after the happening of any of the events described above had such share of Series C Preferred Stock been converted immediately prior to the record date in the case of a dividend or distribution or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this Section D(1) of Paragraph 7 shall become effective immediately after the opening of business on the day next following the record date (except as provided in Section H. below) in the case of a dividend or distribution and shall become effective immediately after the opening of business on the day next following the effective date in the case of a subdivision, combination or reclassification. (2) If the Corporation shall issue after the Issue Date rights, options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 days after the record date described below in this Section D(2) of Paragraph 7) to subscribe for or purchase Common Stock on the record date for the determination of stockholders entitled to receive such rights or warrants, then the Conversion Rate in effect at the opening of business on the day next following such record date shall be adjusted to equal the rate determined by multiplying (i) the Conversion Rate in effect immediately prior to the opening of business on the day following the date fixed for such determination by (ii) a fraction, the numerator of which shall be the sum of (X) the number of shares of Common Stock outstanding on the close of business on the date fixed for such determination and (Y) the number of additional shares of Common Stock offered for subscription or purchase pursuant to such rights or warrants, and the denominator of which shall be the sum of (XX) the number of shares of Common Stock outstanding on the close of business on the date fixed for such determination and (YY) the number of shares that the aggregate proceeds to the Corporation from the exercise of such rights or warrants for Common Stock would purchase at such Fair Market Value. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in Section H below). In determining whether any rights or warrants entitle the holders of Common Stock to subscribe for or purchase Common Stock at less than such Fair Market Value, there shall be taken into account any consideration received by the Corporation upon issuance and upon exercise of such rights or warrants, the value of such consideration, if other than cash, to be determined in good faith by the Board of Directors. (3) If the Corporation shall distribute to all holders of its Common Stock any shares of stock of the Corporation (other than common Stock) or evidence of its indebtedness of assets (including cash, but excluding Permitted Common Stock Cash Distributions) or rights or warrants to subscribe for or purchase any of its securities (excluding those rights and warrants issued to all holders of Common Stock entitling them for a period expiring within 45 days after the record date referred to in Section D(2) of this Paragraph 7. above to subscribe for or purchase Common Stock, which rights and warrants are referred to in and treated under such Section D(2) above) (any of the foregoing being hereinafter in this Section D(3) called the "Distribution"), then in each such case the Conversion Rate shall be adjusted so that it shall equal the rate determined by multiplying (i) the Conversion Rate in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such Distribution by (ii) a fraction, the numerator of which shall be the Fair Market Value per share of Common Stock on the record date mentioned below, and the denominator of which shall be the Fair Market Value per share of Common Stock on the record date mentioned below less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board resolution), of the portion of the stock or assets or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock. Such adjustment shall become effective immediately at the opening of business on the Business Day next following (except as provided in Section H below) the record date for the determination of stockholders entitled to receive such Distribution. For the purposes of this Section D(3), the distribution of a right or warrant to subscribe or purchase any of the Corporation's securities, which is distributed not only to the holders of the Common Stock on the date fixed for the determination of stockholders entitled to such Distribution of such right or warrant, but also is distributed with shares of Common Stock delivered to a Person converting shares of Series C Preferred Stock after such determination date, shall not require an adjustment of the Conversion Rate pursuant to this Section D(3); provided that if on the date, if any, on which a person converting shares of Series C Preferred Stock such person would no longer be entitled to receive such right or warrant with shares of Common Stock (other than as a result of the termination of all such right or warrant), a distribution of such rights or warrants shall be deemed to have occurred and the Conversion Rate shall be adjusted as provided in this Section D(3) and such day shall be deemed to be "the date fixed for the determination of the stockholders entitled to receive such distribution" and "the record date" within the meaning of the two preceding sentences. (4) No adjustment in the Conversion Rate shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in such rate; provided, however, that any adjustments that by reason of this Section D(4) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and provided, further, that any adjustment shall be required and made in accordance with the provisions of this Paragraph 7 [other than this Section D(4)] not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of shares of Common Stock. Notwithstanding any other provisions of this Paragraph 7, the Corporation shall not be required to make any adjustment of the Conversion Rate for the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in shares of Common Stock under such plan. All calculations under this Paragraph 7 shall be made to the nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be. Anything in this Section D of this Paragraph 7 to the contrary notwithstanding, the Corporation shall be entitled, to the extent permitted by law, to make such reductions in the Conversion Rate, in addition to those required by this Section D, as it in its discretion shall determine to be advisable in order that any stock dividends, subdivision of shares, reclassification or combination of shares, distribution of rights or warrants to purchase stock or securities, or a distribution of other assets (other than cash dividends) hereafter made by the Corporation to its stockholders shall not be taxable, or if that is not possible, to diminish any taxes that are otherwise payable because of such event. E. If: (1) the Corporation shall authorize a dividend (or any other distribution) on the Common Stock (other than cash dividends and cash distributions to the extent the same constitute Permitted Common Stock Cash Distributions); or (2) the Corporation shall authorize the granting to the holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of any class or series of stock or any other rights or warrants; or (3) there shall be any reclassification of the Common Stock or any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or a statutory share exchange, or an issuer or self tender offer by the Corporation for all or a substantial portion of its outstanding shares of Common Stock (or an amendment thereto changing the maximum number of shares sought or the amount or type of consideration being offered therefor) or the sale or transfer of all or substantially all of the assets of the Corporation as an entirety; or (4) there shall occur the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, then the Corporation shall cause to be filed with the Transfer Agent and shall cause to be mailed to each holder of shares of Series C Preferred Stock at such holder's address as shown on the stock records of the Corporation, as promptly as possible, but at least 15 days prior to the applicable date hereinafter specified, a notice stating (i) the record date for the payment of such dividend, distribution or rights or warrants, or, if a record date is not established, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights or warrants are to be determined or (ii) the date on which such reclassification, consolidation, merger, statutory share exchange, sale, transfer, liquidation, dissolution or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, statutory share exchange, sale, transfer, liquidation, dissolution or winding up or (iii) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of any amendment thereto). Failure to give or receive such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Paragraph 7. F. Whenever the Conversion Rate is adjusted as herein provided, the Corporation shall promptly file with the Transfer Agent an officer's certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error. Promptly after delivery of such certificate, the Corporation shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date such adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to each holder of shares of Series C Preferred Stock at such holder's last address as shown on the stock records of the Corporation. G. In any case in which Section D. of this Paragraph 7. provides that an adjustment shall become effective on the day next following the record date for an event, the Corporation may defer until the occurrence of such event (i) issuing to the holder of any share of Series C Preferred Stock converted after such record date and before the occurrence of such event the additional Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holder any amount of cash in lieu of any fraction pursuant to Section C. of this Paragraph 7. H. There shall be no adjustment of the Conversion Rate in case of the issuance of any stock of the Corporation in a reorganization, acquisition or other similar transaction except as specifically set forth in this Paragraph 7. If any action or transaction would require adjustment of the Conversion Rate pursuant to more than one paragraph of this Paragraph 7, only one adjustment shall be made and such adjustment shall be the amount of adjustment that has the highest absolute value. I. If the Corporation shall take any action affecting the Common Stock, other than action described in this Paragraph 7, that in the opinion of the Board of Directors would materially adversely affect the conversion rights of the holders of Series C Preferred Stock, the Conversion Rate for the Series C Preferred Stock may be adjusted, to the extent permitted by law, in such manner, if any, and at such time as the Board of Directors, in its sole discretion, may determine to be equitable under the circumstances. J. The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock or other securities or property on conversion or redemption of shares of Series C Preferred Stock pursuant hereto; provided, however, that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or other securities or property in a name other than that of the holder of the shares of Series C Preferred Stock to be converted or redeemed, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation the amount of any such tax or established, to the reasonable satisfaction of the Corporation, that such tax has been paid. 8. RANKING. So long as any shares of Series C Preferred Stock are outstanding, the Corporation shall not issue any class or series of Stock which would entitle the holders thereof to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of Series C Preferred Stock. Any class or series of stock of the Corporation shall be deemed to rank: A. on a parity with the Series C Preferred Stock, as to the payment of dividends and as to distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share thereof be different from those of the Series C Preferred Stock, if the holders of such class of stock or series and the Series C Preferred Stock shall be entitled to the receipt of dividends and of amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid dividends per share or liquidation preferences, without preference or priority one over the other ("Parity Stock"); and B. junior to the Series C Preferred Stock, as to the payment of dividends or as to the distribution of assets upon liquidation, dissolution or winding up, if such stock or series shall be Common Stock or if the holders of Series C Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of shares of such class or series ("Junior Stock"). Series B Preferred Stock shall be considered Parity Stock. 9. VOTING RIGHTS. Holders of Series C Preferred Stock are entitled to vote solely upon those amendments, alterations or repeals of any provision of the Corporation's Certificate of Incorporation adversely affecting their rights and preferences as preferred stockholders; provided, however, that the issuance by the Corporation of additional series of preferred stock will not be deemed to adversely affect the rights and preferences of holders of Series C Preferred Stock, so long as any such series of preferred stock ranks junior to or on a parity with the Series C Preferred Stock. The holders of Series C Preferred Stock shall have no other voting rights, except as prescribed by law. For purposes of the foregoing provisions of this Paragraph 9, each share of Series C Preferred Stock shall have one vote per share. Nothing contained in this Paragraph 9 shall require a vote of the holders of Series C Preferred Stock (i) in connection with any merger or consolidation in which the Corporation is the surviving entity if, immediately after the merger or consolidation, there are outstanding no shares and no securities convertible into shares of any class ranking as to distribution rights or liquidation preference senior to the Series C Preferred Stock or (ii) in connection with any merger or consolidation in which the Corporation is not the surviving entity if, as result of the merger or consolidation, the holders of Series C Preferred Stock receive shares of stock or beneficial interest or other equity securities with preferences, rights and privileges not materially inferior to the preferences, rights and privileges of the Series C Preferred Stock. 10. SEVERABILITY OF PROVISIONS. If any preference, conversion or other right, voting power, restriction, limitation as to dividends or other distributions, qualification or term or condition of redemption of the Series C Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series C Preferred Stock set forth herein which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect, and no preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series C Preferred Stock herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein. RESOLVED FURTHER, that the appropriate officers of the Corporation be, and they are hereby, authorized and directed from time to time to execute such certificates, instruments or other documents and do all such things as may be necessary or advisable in their discretion in order to carry out the terms hereof, including the filing with the Secretary of State for the State of Delaware of a copy of the foregoing resolution executed by an officer of the Corporation. Dated November 24, 1999. 3TEC ENERGY CORPORATION By: /s/ Floyd C. Wilson Name: Floyd C. Wilson Title: President EX-3.3 4 EX-3.3 Exhibit 3.3 CERTIFICATE OF MERGER OF MIDDLE BAY OIL COMPANY, INC. INTO 3TEC ENERGY CORPORATION ______________ The undersigned corporation, 3TEC ENERGY CORPORATION, DOES HEREBY CERTIFY: FIRST: That the name and state of incorporation of each of the constituent corporations of the merger is as follows: NAME STATE OF INCORPORATION Middle Bay Oil Company, Inc. Alabama 3TEC Energy Corporation Delaware SECOND: That an Agreement of Merger between the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 252 of the General Corporation Law of Delaware. THIRD: That the name of the surviving corporation of the merger is 3TEC Energy Corporation, a Delaware corporation. FOURTH: That the Certificate of Incorporation of 3TEC Energy Corporation, a Delaware corporation which is surviving the merger, shall be the Certificate of Incorporation of the surviving corporation. FIFTH: That the executed Agreement of Merger is on file at an office of the surviving corporation, the address of which is Two Shell Plaza, 777 Walker, Suite 2400, Houston, Texas 77002. SIXTH: That a copy of the Agreement of Merger will be furnished by the surviving corporation, on request and without cost, to any stockholder of any constituent corporation. SEVENTH: The authorized capital stock of each foreign corporation which is a party to the merger is as follows: Number Par Value Corporation Class of Shares Per Share Middle Bay Oil Company, Inc. Common 40,000,000 $.02 Preferred 20,000,000 $.02 EIGHTH: That this Certificate of Merger shall be effective on December 7, 1999 at 12:01 a.m. Dated: November 24, 1999. 3TEC ENERGY CORPORATION By: /s/ Floyd C. Wilson Its: President -----END PRIVACY-ENHANCED MESSAGE-----