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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PIONEER NATURAL RESOURCES COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 75-2702753
(State of incorporation or organization) (I.R.S. Employer I.D. No.)
1400 WILLIAMS SQUARE WEST
5205 NORTH O'CONNOR BOULEVARD
IRVING, TEXAS 75039
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
<S> <C>
COMMON STOCK, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE
SERIES A 8% CUMULATIVE CONVERTIBLE PREFERRED NEW YORK STOCK EXCHANGE
STOCK, PAR VALUE $.01 PER SHARE
</TABLE>
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. [ ]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The Common Stock, par value $.01 per share and the Series A 8%
Cumulative Convertible Preferred Stock, par value $.01 per share are described
in the section captioned "Description of Pioneer Capital Stock" in the
Registrant's Registration Statement on Form S-4 (Registration No. 333-26951),
as amended, (the "Registration Statement") originally filed with the Securities
and Exchange Commission on May 13, 1997. The Registration Statement is
incorporated herein by reference.
ITEM 2. EXHIBITS.
1. Amended and Restated Certificate of Incorporation of Pioneer
Natural Resources Company (Exhibit 3.1 to the Registration
Statement).
2. Amended and Restated Bylaws of Pioneer Natural Resources
Company, as adopted June 24, 1997 (Exhibit 3.2 to the
Registration Statement).
3. Certificate of Designations of Series A 8% Cumulative
Preferred Stock, par value $.01 per share, filed August 5,
1997.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
PIONEER NATURAL RESOURCES COMPANY
Date: August 4, 1997 By: /s/ M. Garrett Smith
----------------------------
M. Garrett Smith
Vice President
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Amended and Restated Certificate of Incorporation of Pioneer
Natural Resources Company (Exhibit 3.1 to the Registration
Statement).
3.2 Amended and Restated Bylaws of Pioneer Natural Resources
Company, as adopted June 24, 1997 (Exhibit 3.2 to the
Registration Statement).
4.1 Certificate of Designations of Series A 8% Cumulative
Preferred Stock, par value $.01 per share, filed August 5,
1997.
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CERTIFICATE OF DESIGNATIONS
OF
SERIES A 8% CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
PIONEER NATURAL RESOURCES COMPANY
Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), and pursuant to Article
Fifth of its Amended and Restated Certificate of Incorporation, the
undersigned, Pioneer Natural Resources Company, a company organized and
existing under the DGCL (the "Corporation"), in accordance with the provisions
of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Amended and Restated Certificate of
Incorporation of the Corporation, the Board of Directors on June 25, 1997,
adopted a resolution creating a series of Preferred Stock, par value $.01,
designated as "Series A 8% Cumulative Convertible Preferred Stock"; and
That no shares of such series have been issued; and
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Amended and Restated Certificate of
Incorporation of the Corporation, the Board of Directors on July 31, 1997,
adopted the following resolution which shall have the effect of replacing in
its entirety the resolution of June 25, 1997 and shall create a series of
Preferred Stock, par value $.01, designated as "Series A 8% Cumulative
Convertible Preferred Stock":
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Corporation ("Board of Directors") in accordance
with provisions of its Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation"), a series of
Preferred Stock, par value $.01 per share, of the Corporation is
hereby created, and that the designation and number of shares thereof
and the preferences, limitations and relative rights thereof are as
follows:
Section 1. Designation, Number of Shares and Stated Value of
Series A 8% Cumulative Convertible Preferred Stock. There is hereby authorized
and established a series of Preferred Stock that shall be designated as "Series
A 8% Cumulative Convertible Preferred Stock" (hereinafter referred to as
"Series A Preferred"), and the number of shares constituting such series shall
be 20,000,000. Such number of shares may be increased, but not decreased below
the number of shares thereof issued and outstanding at the time of decrease
plus the maximum number of shares thereof issuable pursuant to Section 3 hereof
prior to June 30, 2008, by resolution adopted by the majority of the full Board
of Directors. The "Stated Value" per share of the Series A Preferred shall be
equal to $15.82.
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Section 2. Definitions. In addition to the definitions set forth
elsewhere herein, the following terns shall have the meanings indicated:
"Average Gas Equivalent Price" shall mean for any Rolling 4 Quarter
Period, the average price received by the Company during such period from sales
of oil and gas production, expressed on a natural gas equivalent basis per
thousand cubic feet ("Mcf") using a factor of 6 Mcf of natural gas per 1 barrel
of liquids, to be calculated as follows:
(a) the aggregate revenues of the Corporation and its
consolidated subsidiaries during such Rolling 4 Quarter Period from
sales of natural gas, natural gas liquids and oil and condensate
produced (other than that used for fuel and shrinkage) and sold by the
Corporation and its consolidated subsidiaries, as reported in the
Corporation's consolidated financial statements, divided by,
(b) the sum of (i) the total volume, on an Mcf basis, of
natural gas produced (other than that used for fuel and shrinkage) and
sold by the Corporation and its consolidated subsidiaries during such
Rolling 4 Quarter Period, plus (ii) the product of 6 times the total
number of barrels of natural gas liquids, oil and condensate, produced
(other than that used for fuel and shrinkage) and sold by the
Corporation and its consolidated subsidiaries during such Rolling 4
Quarter Period, as derived from the Corporation's consolidated
financial statements.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Dallas, Texas are authorized or obligated
by law or executive order to close.
"Closing Price" with respect to a particular security on any Trading
Day shall mean the last reported sales price, regular way, for such security on
such Trading Day, or, in case no sale takes place on such day, the average of
the closing bid and ask prices, regular way on such Trading Day, in either case
as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading or, if such
security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
Nasdaq Stock Market or such other system then in use, or, if on any such date
such security is not quoted by any such organization, the average of the
closing bid and ask prices on such Trading Day as furnished by a professional
market maker making a market in such security selected by the Board of
Directors of the corporation. If on any such date no market maker is making a
market in such security, the fair value of such shares on such date as
determined in good faith by the Board of Directors shall be used.
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"Common Stock" shall mean the common stock, par value $0.01 per share,
of the Corporation.
"Consolidated EBITDA" for any period, shall mean the consolidated net
income or loss of the Corporation for such period determined in accordance with
GAAP, but excluding gains and losses not arising from operations (including,
without limitation, interest income, gains and losses from investments, gains
and losses from dispositions of oil and gas properties or other assets,
collections and settlements of claims and litigation, adjustments of
contingency reserves and other extraordinary and/or non-recurring gains and
losses), plus, to the extent the following have been deducted in determining
such net income or loss, interest expense, income taxes, depreciation,
depletion and amortization expense and impairment expense.
"Conversion Price" shall mean the conversion price per share of Common
Stock into which the Series A Preferred is convertible, as such conversion
price may be adjusted pursuant to Section 9 hereof. The initial Conversion
Price will be $15.82.
"Full Board of Directors" when used in reference to the Corporation's
Board of Directors, means the total number of members of the Board of Directors
as fixed by, or in the manner provided in, the Certificate of Incorporation and
Bylaws (without regard to any then existing vacancies).
"Fixed Charge Coverage Ratio" shall mean as of the end of any Rolling
4 Quarter Period, the ratio of (a) the sum of (i) the Consolidated EBITDA for
such Rolling 4 Quarter Period, plus (ii) one-third of gross operating rents
paid before sublease income as defined by Standard & Poor's Corporation ("Gross
Rents"), if any, for such period to (b) the sum for such Rolling 4 Quarter
Period of (i) interest expense, both expensed and capitalized, of the
Corporation and its consolidated subsidiaries for such period, plus (ii)
one-third of Gross Rents for such period, plus (iii) scheduled principal
amortization of indebtedness (including borrowed money and capitalized leases)
of the Corporation and its consolidated subsidiaries.
"GAAP" shall mean generally accepted accounting principles in the
United States of America from time to time.
"Junior Securities" means the Common Stock or any other series of
stock issued by the Corporation ranking junior as to the Series A Preferred in
payment of dividends or distributions or upon liquidation, dissolution, or
winding-up of the Corporation.
"Market Price" per share of Common Stock as of any date shall mean the
average of the daily Closing Prices for a period of twenty Trading Days ending
on such date.
"Non-Series A Directors" shall mean the members of the Board of
Directors in whose election the holders of Common Stock are entitled to vote
(whether or not holders of shares of any other class or series are also
entitled to vote thereon).
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"Original Issue Date" shall mean with respect to the Series A
Preferred the date on which shares of such series are first issued.
"Parity Security" means any class or series of stock issued by the
Corporation ranking on a parity with the Series A Preferred in payment of
dividends or distributions or upon liquidation, dissolution or winding-up of
the Corporation.
"Payable-in-Kind" or "Paid-in-Kind" when used in reference to any
dividend payable on the shares of Series A Preferred, means payment of the
dividend by issuance of that number of additional shares of Series A Preferred
that has an aggregate Stated Value equal to the dollar amount of such dividend
then payable, rounded to the nearest whole share (i.e., if less than .5 rounded
down, and if .5 or more rounded up). Shares of Series A Preferred issued as
dividends Payable-in-Kind shall be duly authorized, validly issued and
nonassessable and, upon issuance, shall have rights (including without
limitation, dividend, voting, conversion and redemption rights) identical to
the outstanding shares of Series A Preferred in respect of which they are
issued.
"Person" means any individual, corporation, association, partnership,
joint venture, limited liability company, trust, estate, or other entity or
organization.
"Rolling 4 Quarter Period" means the most recently ended period of
four consecutive fiscal quarters of the Corporation prior to the date of
determination.
"Senior Securities" means any class or series of stock issued by the
Corporation ranking senior to the Series A Preferred in payment of dividends or
distributions or upon liquidation, dissolution or winding-up of the
Corporation.
"Trading Day" with respect to any security means (a) if such security
is listed or admitted for trading on any national securities exchange, a day on
which such national securities exchange is open for trailing, or (b) if such
security is not listed or admitted to trading on any national securities
exchange, a Business Day.
"Transfer Agent" means Continental Stock Transfer & Trust Company, or
such other agent or agents of the Corporation as may be designated by the Board
of Directors as the transfer agent or conversion agent for the Series A
Preferred.
"Underlying Common Stock" means at any time, with respect to any share
of Series A Preferred, the aggregate number of shares of Common Stock into
which such share is then convertible at such time pursuant to Section 9 hereof.
Section 3. Dividends and Distributions.
(a) The holders of outstanding shares of Series A Preferred shall
be entitled to receive, as and when declared by the Corporation, out of funds
of the Corporation legally available for the
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payment of dividends, preferential quarterly dividends at the times and at the
rates provided for in this Section 3. Dividends on shares of the Series A
Preferred shall be cumulative and shall accrue from and including the date of
issuance of such shares to and including the date on which such shares shall
have been converted into Common Stock or redeemed pursuant to Section 6 hereof.
Such dividends shall accrue whether or not there shall be (at the time such
dividend becomes payable or at any other time) profits, surplus or other funds
of the Corporation legally available for the payment of dividends.
(b) Dividends shall accrue on each outstanding share of Series A
Preferred at the rate of eight percent (8%) per annum of the Stated Value (the
"Dividend Rate") of such share. Dividends shall be payable quarterly, in
arrears, as of the last Business Day of each December, March, June and
September, commencing on September 30, 1997 (each, a "Dividend Payment Date"),
however, the initial dividend payment shall be payable, and dividends shall
accrue, as if the shares of Series A Preferred had been outstanding as of June
30, 1997.
(c) During the period beginning on the Original Issue Date of the
Series A Preferred and ending on June 30, 2000 (the "Exclusive PIK Period"),
dividends on outstanding shares of Series A Preferred shall be Payable-in-Kind.
After the Exclusive PIK Period, dividends on the shares of Series A Preferred
shall be Payable-in-Kind or, at the Corporation's option, if the "Stock Price
Threshold" (as defined in subsection (d) below) or the "Coverage Ratio or Gas
Price Threshold" (as defined in subsection (e) below) is satisfied as of the
record date for such dividend, payable in cash.
(d) For purposes hereof, the "Stock Price Threshold" shall be
satisfied as of a record date for a Dividend Payment Date after the Exclusive
PIK Period if the average of the daily Closing Price, for the Common Stock
during a period of ninety (90) consecutive Trading Days preceding the tenth day
prior to such record date, was more than three times the Conversion Price then
in effect. Once the Stock Price Threshold has been satisfied, it shall be
deemed to remain satisfied on each subsequent Quarterly Dividend Payment Date
regardless of any subsequent changes in the price of the Common Stock.
(e) For purposes hereof, the "Coverage Ratio or Gas Price
Threshold" shall be satisfied as of a record date for a Dividend Payment Date
if either (i) the Fixed Charge Coverage Ratio as of the end of the then most
recently ended Rolling 4 Quarter Period is in excess of 2.5; or (ii) the
Average Gas Equivalent Price realized by the Company during the then most
recently ended Rolling 4 Quarter Period is in excess of $2.95. As a condition
to the payment of cash dividends on any Dividend Payment Date, the Coverage
Ratio or Gas Price Threshold must be satisfied as of the record date for such
quarterly Dividend Payment Date (unless the Stock Price Threshold has been
satisfied, in which case satisfaction of the Coverage Ratio or Gas Price
Threshold shall not be required).
(f) The amount of dividends payable on each Dividend Payment Date
shall be determined by applying the Dividend Rate from but excluding the
immediately preceding Dividend
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Payment Date (or from but excluding June 30, 1997, with respect to the first
dividend period) to and including the Dividend Payment Date.
(g) Notwithstanding the foregoing or anything else herein to the
contrary, however, (i) dividends payable on any Redemption Date (as defined in
Section 6 below), shall be payable in cash or in Common Stock in accordance
with Section 6 hereof, and (ii) dividends payable on any final distribution
date relating to a dissolution, liquidation or winding up of the Corporation,
shall be payable in cash only. If the payment date does not occur on a regular
Dividend Payment Date, dividends shall be calculated on the basis of the actual
number of days elapsed from but excluding the immediately preceding Dividend
Payment Date to and including the Redemption Date or such final distribution
date. Dividends payable on the shares of Series A Preferred for any period of
less than a full quarterly dividend period shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
(h) To the extent dividends are not paid in cash or Paid-in-Kind
on a Dividend Payment date, all dividends which shall have accrued on each
share of Series A Preferred outstanding as of such Dividend Payment Date shall
be added to the Stated Value of such share of Series A Preferred and shall
remain a part thereof until paid, and dividends shall accrue at the Dividend
Rate and be paid on such share of Series A Preferred on the basis of the Stated
Value, as so adjusted.
(i) Dividends payable on each Dividend Payment Date shall be paid
to record holders of the shares of Series A Preferred as they appear on the
books of the Corporation at the close of business on the tenth Business Day
immediately preceding the respective Dividend Payment Date or on such other
record date as may be fixed by the Board of Directors of the Corporation in
advance of a Dividend Payment Date, provided that no such record date shall be
less than ten nor more than sixty calendar days preceding such Dividend Payment
Date.
(j) So long as any shares of Series A Preferred are outstanding:
(i) No dividend or other distribution shall be declared
or paid, or set apart for payment on or in respect of, any Junior
Securities (other than dividends or distributions payable in shares of
Junior Securities or in rights to purchase Junior Securities), nor
shall any Junior Securities be redeemed, purchased or otherwise
acquired for any consideration (or any money be paid to a sinking fund
or otherwise set apart for the purchase or redemption of any such
Junior Securities).
(ii) No dividend or other distribution, except as
described in the next succeeding sentence, shall be declared or paid,
or set apart for payment on or in respect of, Series A Preferred or
any Parity Securities for any period unless full cumulative dividends
on all outstanding shares of Series A Preferred and any Parity
Securities have been or contemporaneously are declared and paid for
all dividend periods terminating on or prior to the date set for
payment of such dividend. When dividends are not paid in full, as
aforesaid, on the shares of Series A Preferred and any Parity
Securities, all dividends declared upon the
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Series A Preferred and such Parity Securities shall be declared and
paid pro rata so that the amounts of dividends per share declared and
paid on the shares of Series A Preferred and such Parity Securities
shall in all cases bear to each other the same ratio that unpaid
dividends per share on the Series A Preferred and on such Parity
Securities bear to each other.
(iii) No shares of Series A Preferred or any Parity
Securities shall be redeemed, purchased or otherwise acquired for any
consideration (or any money be paid to a sinking fund or otherwise set
apart for the purchase or redemption of any such Parity Security) by
the Corporation unless the full cumulative dividends on all
outstanding shares of Series A Preferred shall have been or
contemporaneously are declared and paid for all dividend periods
terminating on or prior to the date on which such redemption, purchase
or other payment is to occur.
Section 4. Certain Covenants and Restrictions. So long as any
shares of Series A Preferred are outstanding:
(a) The Corporation shall at all times reserve and keep available
for issuance upon the conversion of the shares of Series A Preferred as
provided in Section 6 and Section 9, respectively, such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the conversion of all outstanding shares of Series A Preferred and all other
securities and instruments convertible into shares of Common Stock, and shall
take all reasonable action within its power required to increase the authorized
number of shares of Common Stock necessary to permit the conversion of all
outstanding shares of Series A Preferred and all such other securities and
instruments convertible into shares of Common Stock.
(b) The Corporation covenants and agrees that all shares of Common
Stock that may be issued as payment of the Redemption Price or upon exercise of
the conversion rights of shares of Series A Preferred will, upon issuance, be
fully-paid and nonassessable.
(c) The Corporation will endeavor to make the shares of stock that
may be issued as payment of the Redemption Price or upon exercise of the
conversion rights of shares of Series A Preferred eligible for trading upon any
national securities exchange, or any automated quotation system of a registered
securities association, upon or through which the Common Stock shall then be
traded prior to such delivery.
(d) Prior to the delivery of any securities which the Corporation
shall be obligated to deliver upon redemption or conversion of the Series A
Preferred, the Corporation will endeavor to comply with all federal and state
securities laws and regulations thereunder requiring the registration of such
securities with, or any approval of or consent to the delivery of such
securities by, any governmental authority.
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(e) The Corporation shall pay all taxes and other governmental
charges (other than any income or franchise taxes) that may be imposed with
respect to the issue or delivery of shares of Common Stock upon conversion or
redemption of Series A Preferred as provided herein. The Corporation shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Common
Stock in any name other than that of the registered holder of the shares of the
Series A Preferred surrendered in connection with the conversion or redemption
thereof, and in such case the Corporation shall not be required to issue or
deliver any stock certificate until such tax or other charge has been paid, or
it has been established to the Corporation's satisfaction that no tax or other
charge is due.
Section 5. Liquidation Preference.
(a) In the event of any liquidation, dissolution, or winding-up of
the Corporation (in connection with the bankruptcy or insolvency of the
Corporation or otherwise), whether voluntary or involuntary, 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 shares of any Junior
Securities, the holders of the shares of Series A Preferred shall be entitled
to receive an amount per share equal to the Stated Value per share held by
them, plus an amount in cash equal to the full cumulative dividends accrued and
unpaid thereon, to the date of such payment, whether or not declared, to the
extent such amount has not already been added to the Stated Value pursuant to
Section 3(h) hereof. No payment on account of any such liquidation, dissolution
or winding-up of the Corporation shall be paid to the holders of the shares of
Series A Preferred or the holders of any Parity Securities unless there shall
be paid at the same time to the holders of the shares of Series A Preferred and
the holders of any Parity Securities proportionate amounts determined ratably
in proportion to the full amounts to which the holders of all outstanding
shares of Series A Preferred and the holders of all such outstanding Parity
Securities are respectively entitled with respect to such distribution. For
purposes of this Section 5, neither a consolidation or merger of the
Corporation with one or more partnerships, companies or other entities nor a
sale, lease, exchange or transfer of all or any substantial part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary.
(b) After payment of the full amount of the liquidation preference
to which the holders of shares of Series A Preferred are entitled, such holders
will not be entitled to any further participation in any distribution of assets
of the Corporation.
(c) Written notice of any liquidation, dissolution or winding-up
of the Corporation, stating the payment date or dates when and the place or
places where the amounts distributable in such circumstances shall be payable,
shall be given by first class mail, postage prepaid, not less than 15 days
prior to any payment date stated therein, to the holders of record of the
shares of Series A Preferred at their respective addresses as the same shall
appear in the records of the Corporation.
Section 6. Redemption. The outstanding shares of Series A
Preferred are subject to redemption in accordance with the following
provisions:
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(a) Subject to the terms hereof, the Corporation may at its option
elect to redeem outstanding shares of Series A Preferred, in whole or in part
(pro-rata or by lot among the outstanding shares), on any Dividend Payment Date
after August 1, 2006.
(b) On June 30, 2008, the Corporation shall redeem all of the
shares of Series A Preferred outstanding on such date.
(c) The redemption price per share for Series A Preferred redeemed
on any optional or mandatory redemption date (the "Redemption Price") shall be
equal to the Stated Value per share of the shares to be redeemed plus an amount
equal to the aggregate dollar amount of all accrued and unpaid dividends
through the redemption date that have not been added to the Stated Value of
such shares pursuant to Section 3(h) hereof. The Redemption Price shall be paid
in cash from any source of funds legally available therefore unless the
Corporation shall publicly announce at least 30 days prior to the redemption
date that it has elected to make payment of the Redemption Price in Common
Stock, in which case the Redemption Price shall be payable in Common Stock. If
the Corporation elects to pay the Redemption Price in shares of Common Stock,
the number (or fraction) of shares to be issued in payment of the Redemption
Price shall be calculated based on the Market Price per share of Common Stock
as of the fifth Trading Day before the redemption date.
(d) Not less than thirty nor more than sixty days prior the
redemption date, a notice specifying the time and place of such redemption
shall be given by first class mail, postage prepaid, to the holders of record
of the shares of Series A Preferred to be redeemed at their respective
addresses as the same shall appear on the books of the Corporation (but no
failure to mail such notice or any defect therein shall affect the validity of
the proceedings for redemption except as to the holder to whom the Corporation
has failed to mail such notice or except as to the holder whose note was
defective), calling upon each such holder of record to surrender to the
Corporation on the redemption date at the place designated in such notice such
holder's certificate or certificates representing the then outstanding shares
of Series A Preferred held by such holder. On or after the Redemption Date,
each holder of shares of Series A Preferred called for redemption shall
surrender his certificate or certificates for such shares to the Corporation at
the place designated in the redemption notice and shall thereupon be entitled
to receive payment of the Redemption Price in the manner set forth in Section
6(a) above. If the redemption is delayed for any reason, dividends shall
continue to accrue on the shares of Series A Preferred outstanding, and shall
be added to and become a part of the Redemption Price of such shares, until the
Redemption Price, as so adjusted, for such shares is paid in full.
(e) If a holder of shares of Series A Preferred called for
redemption shall have elected, in accordance with the provisions of Sections
9(a) and (b), to convert such shares into Common Stock, such shares of Series A
Preferred which are to be converted into Common Stock shall no longer be
subject to redemption, and conversion of same shall occur in accordance with
the terms of Section 9.
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Section 7. Shares to be Retired. All shares of Series A
Preferred repurchased, redeemed, converted or otherwise acquired by the
Corporation shall be retired and canceled and shall be restored to the status
of authorized but unissued shares of Preferred Stock, without designation as to
series, and may thereafter be reissued.
Section 8. Voting Rights.
(a) Except as otherwise provided in this Section 8 or required by
law or any provision of the Certificate of Incorporation of the Corporation,
the holders of the shares of Series A Preferred shall vote together with the
shares of Common Stock as a single class at any annual or special meeting of
stockholders of the Corporation upon the following basis: each holder of shares
of Series A Preferred shall be entitled to such number of votes for the shares
of Series A Preferred held by such holder on the record date fixed for such
meeting as shall be equal to the whole number of shares of Underlying Common
Stock for such shares of Series A Preferred immediately after the close of
business on the record date fixed for such meeting.
(b) With respect to any matter for which the affirmative vote of
the holders of separate classes or series of the Corporation's capital stock is
required by the DGCL, the holders of Series A Preferred shall vote as a
separate class with respect to such matter.
(c) For so long as any shares of Series A Preferred remain
outstanding, the Corporation shall not without the affirmative vote or consent
of the holders of two-thirds of the shares of Series A Preferred voting as a
separate class: (i) authorize, create or issue, or increase the authorized or
issued amount of, any class or series of stock of Senior Securities or Parity
Securities, or any security convertible into or exchangeable for Senior
Securities or Parity Securities or reclassify or modify any Junior Securities
so as to become Parity Securities or Senior Securities; or (ii) adopt any
amendment to the Certificate of Incorporation or the bylaws that would
materially affect the terms of the Series A Preferred.
(d) The following special voting provisions shall be applicable to
the Series A Preferred Stock:
(i) if the corporation shall be in arrears in the payment
of dividends (whether Payable-in-Kind or in cash) on the shares of
Series A Preferred for a total of six quarterly Divided Payment Dates,
then the number of members of the Board of Directors shall
automatically be increased by two additional directors and the holders
of the Series A Preferred, voting as a separate class, shall have the
exclusive right to elect two directors ("Series A Directors") at the
next annual meeting of stockholders (or at a special meeting as
provided in Section 8(e) hereof) and every subsequent annual meeting
of stockholders called for the election of directors at which the term
of office of the Series A Directors expire;
(ii) the right of the holders of Series A Preferred to
elect the Series A Directors as aforesaid shall continue until such
time as dividends accumulated on the Series A
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Preferred shall have been paid in full, whether Payable-in-Kind or in
cash, at which time the office of the Series A Directors shall be
eliminated and the special right of the holders of Series A Preferred
so to vote separately as a class for the election of the Series A
Directors shall terminate, subject to revesting at such time as the
corporation shall be in arrears in the payment of dividends on the
outstanding shares of Series A Preferred as set forth in clause (i)
above;
(iii) upon any termination of the right of holders of
Series A Preferred to vote as a separate class for directors as herein
provided, the term of office of each Series A Director shall
automatically expire and the size of the Board of Directors shall
automatically be reduced accordingly;
(iv) unless otherwise terminated as set forth above, the
term of office of each Series A Director shall terminate upon the
election of a successor Series A Director at any meeting of the
stockholders held for the purpose of electing directors; and
(v) in any case in which the holders of Series A
Preferred shall be entitled to vote pursuant to this Section 8(d),
each holder of Series A Preferred shall be entitled to one vote for
each share of Series A Preferred held.
(e) During any period in which the holders of Series A Preferred
shall be entitled to elect directors pursuant to subsection (d) of this Section
8, the following shall be applicable:
(i) if the annual meeting of stockholders of the
Corporation is not, for any reason, held within the time fixed in the
Bylaws of the Corporation, or if a vacancy shall exist in the office
of a Series A Director, a proper officer of the Corporation, upon the
written request of the holders of record of at least ten percent (10%)
of the shares of the Series A Preferred then outstanding, as
applicable, addressed to the Secretary of the Corporation, shall call
a special meeting in lieu of the annual meeting of stockholders for
the purpose of electing Series A Directors, or in the event of a
vacancy, a special meeting of the holders of Series A Preferred for
the purpose of electing Series A Directors, and any such meeting shall
be held at the earliest practicable date at such time and place as
shall be determined by the Corporation;
(ii) if such meeting shall not be called by the proper
officer of the Corporation within twenty (20) days after personal
service of said written request upon the Secretary of the Corporation,
or within (20) days after mailing the same within the United States by
certified mail, addressed to the Secretary of the Corporation at its
principal executive offices, then the holders of record of at least
ten percent (10%) of the outstanding shares of the Series A Preferred
may designate in writing one of their number to call such meeting at
the expense of the Corporation, and such meeting may be called by the
person so designated upon the notice required for the annual meetings
of stockholders of the Corporation and shall be held at the principal
executive offices of the Corporation. Any holder of Series A Preferred
so
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designated shall have access to the lists of Series A Preferred
stockholders to be called pursuant to the provisions hereof; and
(iii) at any meeting held for the purpose of electing a
director at which the holders of Series A Preferred shall have the
right, voting as a separate class, to elect the Series A Director
pursuant to this Section 8, the presence in person or by proxy of the
holders of at least one-third (1/3) of the outstanding Series A
Preferred shall be required to constitute a quorum of such Series A
Preferred.
Section 9. Conversion Rights. Holders of shares of Series A
Preferred 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
Section 9, each share of Series A Preferred shall be convertible at the option
of the holder thereof into fully paid, nonassessable shares of Common Stock.
The number (or fraction) of shares of Common Stock deliverable upon conversion
of one share of Series A Preferred shall be determined by dividing the Stated
Value of such share of Series A Preferred by the Conversion Price then in
effect. For purpose of such determination, the Stated Value of each share of
Series A Preferred shall be increased by the amount of accrued and unpaid
dividends for all quarterly dividend payment periods ending on or prior to the
date such shares are surrendered to the Corporation for conversion and for the
partial dividend period beginning on the date immediately following the most
recent Dividend Payment Date through and including the date on which such
shares are surrendered for conversion. Notwithstanding the foregoing, holders
of shares of Series A Preferred surrendered for conversion shall have the right
to require the Corporation to make payment in cash of all such accrued and
unpaid dividends, in lieu of such adjustment to the Stated Value to the extent
funds are legally available therefor.
(b) The conversion of any share of Series A Preferred may be
effected by the holder thereof by the surrender of the certificate for such
share to the Corporation at the principal office of the Transfer Agent or to
such other agent or agents of the Corporation as may be designated by the Board
of Directors. If any shares of Series A Preferred are called for redemption
pursuant to Section 6 hereof, such right of conversion shall cease and
terminate as to the shares called for redemption at the close of business on
the Business Day immediately preceding the redemption date, unless the
Corporation shall default in the payment of the Redemption Price, in which
event such conversion right shall remain in effect until full payment of the
Redemption Price has been made.
(c) As promptly as practicable after the surrender of shares of
Series A Preferred for conversion, the Corporation shall issue and deliver or
cause to be issued and delivered to the holder of such shares certificates
representing the number (or fraction) of fully paid and non-assessable shares
of Common Stock into which such shares of Series A Preferred have been
converted in accordance with the provisions of this Section 9. Subject to the
following provisions of this Section 9, such conversion shall be deemed to have
been made as of the close of business on the date on which the shares of Series
A Preferred shall have been surrendered for conversion in the manner
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herein provided, so that the rights of the holder of the shares of Series A
Preferred so surrendered shall cease at such time, and the person or persons
entitled to receive the shares of Common Stock upon conversion thereof shall be
treated for all purposes as having become the record holder or holders of such
shares of Common Stock at such time; provided, however, that any such surrender
on any date when the stock transfer books of the Corporation are closed shall
be deemed to have been made, and shall be effective to terminate the rights of
the holder or holders of the shares of Series A Preferred so surrendered for
conversion and to constitute the person or persons entitled to receive such
shares of Common Stock as the record holder or holders thereof for all
purposes, at the opening of business on the next succeeding day on which such
transfer books are open and such conversion shall be at the Conversion Price in
effect at such time.
(d) Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value of the shares of Common
Stock deliverable upon conversion of the shares of Series A Preferred, the
Corporation will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and non-assessable shares of Common Stock at such adjusted
Conversion Price.
(e) The Conversion Price shall be subject to adjustment from time
to time as follows:
(i) In case at any time the Corporation shall (A)
subdivide the outstanding shares of Common Stock into a greater number
of shares, or (B) combine the outstanding shares of Common Stock into
a smaller number of shares, the Conversion Price in effect immediately
prior thereto shall be adjusted proportionately so that the adjusted
Conversion Price shall bear the same relation to the Conversion Price
in effect immediately prior to such event as the total number of
shares of Common Stock outstanding immediately prior to such event
shall bear to the total number of shares of Common Stock outstanding
immediately after such event. Such adjustment shall become effective
immediately after the effective date of a subdivision or combination.
(ii) In case at any time the Corporation shall declare,
order, pay or make any dividend or other distribution to holders of
the Common Stock payable in Common Stock, then in each such case,
subject to Section 9(e)(v) hereof, the Conversion Price in effect
immediately prior to the close of business on the record date fixed
for determination of holders of any class of securities entitled to
receive such dividend or distribution shall be reduced to a price
(calculated to the nearest .001 of cent) determined by multiplying
such Conversion Price by a fraction:
(A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such
dividend or distribution; and
(B) the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such
dividend or distribution.
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Shares of Common Stock owned by or held for the account of the
Corporation shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made on the date such
dividend is paid or such distribution is made and shall become
effective retroactive to the record date for the determination of
stockholders entitled to receive such dividend or distribution.
(iii) In case at any time the Corporation shall declare,
order, pay or make any dividend or other distribution to all holders
of the Common Stock, other than a dividend payable in shares of Common
Stock (including, without limitation, dividends or distributions
payable in cash, evidences of indebtedness, rights, options or
warrants to subscribe or purchase any Common Stock (or other
securities, or any other securities or other property, but excluding
any rights to purchase any stock or other securities if such rights
are not separable from the Common Stock except upon the occurrence of
a contingency beyond the control of the Corporation), then, and in
each such case, subject to Section 9(e)(v) hereof, the Conversion
Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock
entitled to received such dividend or distribution shall be reduced to
a price (calculated to the nearest .001 of cent) determined by
multiplying such Conversion Price by a fraction:
(A) the numerator of which shall be the Market
Price per share of Common Stock in effect as of such record
date or, if the Common Stock trades on an ex-dividend basis,
on the Trading Day immediately prior to the date of
commencement of ex-dividend trading, less the value of such
dividend or distribution (as determined in good faith by the
Board of Directors of the Corporation) applicable to one share
of Common Stock, and
(B) the denominator of which shall be such Market
Price per share of Common Stock as of such record date or, if
the Capital Stock trades on an ex-dividend basis, on the
Trading Day immediately prior to the date of commencement of
ex-dividend trading.
Such adjustment shall be made on the date such dividend is paid or
such distribution is made and shall become effective retroactive to
the record date for the determination of stockholders entitled to
receive such dividend or distribution.
(iv) In case at any time the Corporation issues or sells
any shares of Common Stock or any rights, options or warrants to
subscribe for or purchase shares of Common Stock or shares having the
same rights, privileges and preferences as the Common Stock
("equivalent common stock") or securities convertible into Common
Stock or equivalent common stock, at a price per share of Common Stock
or equivalent common stock (or having a conversion price per share, if
a security is convertible into shares of Common Stock or equivalent
common stock) less than the Market Price of the Common Stock as of the
date of such issue or sale, then upon such issue or sale the
Conversion Price shall be reduced to
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such Conversion Price determined by multiplying the Conversion Price
in effect immediately prior to such issue or sale by a fraction, (x)
the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to such issue or sale plus
the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock and/or equivalent
common stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase
at such Market Price and (y) the denominator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior
to such issue or sale plus the number of additional shares of Common
Stock and/or equivalent common stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered
are initially convertible). In case such subscription price may be
paid in a consideration part of or all of which shall be in a form
other than cash, the value of such consideration shall be determined
in good faith by the Board of Directors of the Corporation. Shares of
Common Stock owned by or held for the account of the Corporation shall
not be deemed outstanding for the purpose of any such computation.
Such issue or sale adjustment shall be made successively upon the
issuance or sale of shares of Common Stock or equivalent common stock
or any rights, options or warrants to subscribe for or purchase Common
Stock or equivalent common stock or securities convertible into common
stock or equivalent common stock. Notwithstanding the foregoing, no
adjustment of the Conversion Price pursuant to this Section 9(e)(iv)
shall be made upon (A) the conversion or redemption of shares of
Series A Preferred; (B) the payment of any stock dividend on the
Series A Preferred; (C) the issuance of options to officers, directors
and employees of the Company and its subsidiaries, to purchase shares
of Common Stock, including any such options as are issued and
outstanding as of the Original Issue of the Series A Preferred; (D)
the issuance and sale of Common Stock upon exercise of any rights,
options or warrants referenced in the immediately preceding clause (C)
or in Section 9(e)(iii); or (E) the issuance and sale of Common Stock
in an underwritten public offering at a price to the public of not
less than 95% of the Closing Price of the Common Stock on the date of
the pricing of such offering.
(v) If the amount of any adjustment of the Conversion
Price required pursuant to this Section 9 would be less than 1% of the
Conversion Price in effect at the time such adjustment is otherwise so
required to be made, such amount shall be carried forward and an
adjustment with respect thereto made at the time of and together with
any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least
1% of such Conversion Price. All calculations under this Section 9
shall be made to the nearest .001 of a cent.
(vi) Except as herein otherwise expressly provided, for
all purposes of this Section 9(e) the term "Common Stock" shall mean
the Common Stock and any shares of stock or other class of capital
stock of the Corporation which is not preferred as to dividends or
assets over any other class of capital stock of the Corporation and
which is not subject to redemption, or which is issued to the holders
of shares of Common Stock upon any reclassification thereof
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(f) In case at any time after the Original Issuance Date, the
Corporation shall be a party to any transaction (including without limitation,
a merger, consolidation, statutory share exchange, sale of all or substantially
all of the Corporation's assets or recapitalization of the Common Stock) in
each case as a result of which shares of Common Stock (or any other securities
of the Corporation then issuable upon conversion of the Series A Preferred )
shall be converted to the right to receive stock, securities or other property
(including cash or any combination thereof) (each of the foregoing transactions
being referred to as a "Fundamental Change Transaction"), then the shares of
Series A Preferred remaining outstanding will thereafter no longer be subject
to conversion into Common Stock (or such other securities) pursuant to this
Section 9, but instead each share shall be convertible into the kind and amount
of stock and other securities and property receivable (including cash) upon the
consummation of such Fundamental Change Transaction by a holder of that number
of shares or fraction thereof of Common Stock (or such other securities) into
which one share of Series A Preferred was convertible immediately prior to such
Fundamental Change Transaction assuming such holder of Common Stock failed to
exercise any right of election as to the kind of consideration to be received
in such Fundamental Change Transaction. The Corporation shall not be a party to
any Fundamental Change Transaction after which shares of the Series A Preferred
shall remain outstanding unless the terms of such Fundamental Change
Transaction are consistent with the provisions of this Section 9(f), and it
shall not consent or agree to the occurrence of any such Fundamental Change
Transaction until the Corporation has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit of the
holders of the shares of Series A Preferred which will contain provisions
enabling the holders of shares of the Series A Preferred which remain
outstanding after such Fundamental Change Transaction to convert such shares
into the consideration received by holders of Common Stock (or any other
securities of the Corporation then issuable upon conversion of the Series A
Preferred ) at the Conversion Price immediately after such Fundamental Change
Transaction. In the event that at any time, as a result of an adjustment made
pursuant to this Section 9, the Series A Preferred shall become subject to
conversion into any securities other than shares of Common Stock, thereafter
the number of such other securities so issuable upon conversion of the shares
of Series A Preferred shall be subject to adjustment from time to time in a
manner and on terms nearly equivalent as practicable to the provisions with
respect to the shares of Series A Preferred contained in this Section 9. The
provisions of this Section 9(f) shall similarly apply to successive Fundamental
Change Transactions.
(g) Upon the occurrence of any event requiring an adjustment of
the Conversion Price, then and in any such case the Corporation shall promptly
deliver to the holders of shares of Series A Preferred a notice stating the
Conversion Price resulting from such adjustment, the method of calculation
thereof, and setting forth a brief statement of the facts requiring such
adjustment and upon which such adjustment is based.
(h) In case at any time:
(i) the Corporation shall declare or pay to all holders
of Common Stock any dividend (whether payable in Common Stock, cash,
securities or other property);
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(ii) there shall be any capital reorganization, or
reclassification of the Common Stock of the Company or consolidation
or merger of the Corporation with, or sale of all or substantially all
of its assets to, another Corporation or other entity;
(iii) there shall be a voluntary or involuntary
dissolution, liquidation, or winding-up of the Corporation; or
(iv) there shall be any other Fundamental Change
Transaction;
then, in any one or more of such cases, the Corporation shall give to
the holder of shares of Series A Preferred (A) at least 15 days prior
to any event referred to in clause (i) above and at least 30 days
prior to any event referred to in clause (ii), (iii) or (iv) above,
written notice of the date on which the books of the Corporation shall
close or records shall be taken for such dividend or distribution or
for determining rights to vote in respect of any such organization,
reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up, or Fundamental Change Transaction and (B) in
the case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, winding-up, or Fundamental
Change Transaction known to the Corporation, at least 30 days prior
written notice of the date (or if not then known, a reasonable
approximation thereof by the Corporation) when the same shall take
place. Such notice in accordance with the foregoing clause (A) shall
also specify, in the case of any such dividend or distribution, the
date on which such holders of Common Stock shall be entitled thereto,
and such notice in accordance with the foregoing clause (B) shall also
specify the date on which such holders of Common Stock shall be
entitled to exchange their Common Stock securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, winding-up, or Fundamental
Change Transaction, as the case may be.
(v) All shares of Common Stock issuable upon the
conversion set forth in this Section 9 shall be validly issued,
fully-paid and non-assessable.
Section 10. Ranking. Without limiting the definition of Junior
Securities, the shares of Common Stock of the Corporation and the shares of
Series B Convertible Preferred Shares of the Corporation established on the
date hereof shall rank junior to the Series A Preferred with respect to the
payments required or permitted to be made to the holders of the Common Stock
and Series B Convertible Preferred Stock pursuant to the Certificate of
Incorporation and payments required to be made to the holders of the Series A
Preferred pursuant hereto.
Section 11. Record Holders. The Corporation and the Transfer
Agent may deem and treat the record holder of any shares of Series A Preferred
as the true and lawful owner thereof for all purposes, and neither the
Corporation nor Transfer Agent shall be affected by any notice to the contrary.
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Section 12. Notice. Except as may otherwise be provided by law or
provided for herein, all notices referred to herein shall be in writing, and
all notices hereunder shall be deemed to have been given upon receipt, in the
case of a notice of conversion given to the Corporation as contemplated in
Section 9(h) hereof, or, in all other cases, upon the earlier of receipt of
such notice or three Business Days after the mailing of such notices sent by
first-class mail (unless certified or registered mail shall be specifically
required) with postage prepaid, addressed: If to the Corporation, to its
principal executive offices (Attention: Corporate Secretary) or to any agent of
the Corporation designated as permitted hereby; or if to a holder of the Series
A Preferred, to such holder at the address of such holder of the Series A
Preferred as listed in the stock record books of the Corporation (which shall
include the records of the Transfer Agent), or to such other address as the
Corporation or holder, as the case may be, shall have designated by notice
similarly given.
Section 13. Authorization by Non-Series A Directors. A majority
of the Non-Series A Directors shall make any determination required or
permitted to be made by the Board of Directors on behalf of the Corporation (i)
pursuant to Section 6(c) hereof, as to whether to make payment of the
Redemption Price of the Series A Preferred in cash or in kind, (ii) pursuant to
Section 6(a) hereof, as to whether to exercise the Corporation's option to
redeem outstanding shares of Series A Preferred, or (iii) pursuant to Section
3(c) hereof, as to whether to make payment of any dividends declared by the
Board of Directors on the Series A Preferred in cash or in kind; provided that,
the Non-Series A Directors shall not be entitled to make any determination to
pay cash dividends unless the Corporation shall have sufficient cash legally
available to make such payment in full.
Section 14. Successors and Transferees. The provisions applicable
to shares of Series A Preferred shall bind and inure to the benefit of and be
enforceable by the Corporation, the respective successors to the Corporation,
and by any record holder of shares of Series A Preferred.
IN WITNESS WHEREOF, the undersigned has executed this Certificate and
does affirm the foregoing as true this 31st day of July, 1997.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ M. Garrett Smith
--------------------------------
M. Garrett Smith
Vice President
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