<PAGE> 1
As filed with the Securities and Exchange Commission on April 12, 1995.
Registration No. 33-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
___________________
ONEOK INC.
(Exact name of registrant as specified in its charter)
Delaware 73-0383100
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 West Fifth Street
Tulsa, Oklahoma 74103
(918) 588-7000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
B. M. VAN METER DONALD A. KIHLE, ESQ.
President- Arrington Kihle
Energy Companies Gaberino & Dunn, P.C.
of ONEOK 1000 ONEOK Plaza
ONEOK Inc. ONEOK Inc.
100 West Fifth Street Tulsa, Oklahoma 74103-4219
Tulsa, Oklahoma 74103 (918) 585-8141
(918) 588-7000
(Names, addresses, including zip codes, and telephone numbers,
including area codes, of agents for service)
___________________
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. | |
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================
Proposed Proposed
Maximum Maximum
Title of Each Amount Offering Aggregate Amount of
Class of Securities to be Price Offering Registration
to be Registered Registered Per Unit* Price* Fee
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
without par value.....330,000 shs. $19.063 $6,290,625 $2,169.00
=================================================================================
</TABLE>
*Estimated solely for purposes of calculating the registration fee pursuant to
Rule 457.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation, or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 12, 1995
330,000 Shares
ONEOK Inc.
Common Stock
Up to 330,000 presently outstanding shares of common stock of ONEOK Inc. (the
"Company") may be offered for sale from time to time by certain stockholders of
the Company (the "Selling Stockholders"). See "Selling Stockholders." The
Company will not receive any of the proceeds from the sale of shares in this
offering.
Sales of shares by the Selling Stockholders may be effected from time to time
in one or more transactions on the New York Stock Exchange or other exchange on
which the common stock may be listed, in negotiated transactions or in a
combination of any such methods of sale. The selling price of the shares may
be at the market price prevailing at the time of sale, at a price related to
such prevailing market price, or at a negotiated price. The Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). See "Plan of
Distribution." The Company has agreed to indemnify the Selling Stockholders
against certain civil liabilities, including liabilities under the Securities
Act.
The Company's common stock is traded on the New York Stock Exchange under the
trading symbol "OKE". On April 7, 1995, the last reported sale price of the
common stock on the New York Stock Exchange was $19.125 per share. See "Common
Stock Dividends and Price Range."
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is ________, 1995
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the following
regional offices of the Commission: Chicago Regional Office, CitiCorp Center,
500 West Madison Avenue, Suite 1400, Chicago, Illinois 60661-2511; and New York
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can also be obtained (at prescribed rates) from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. The common stock of the Company is also listed
on the New York Stock Exchange, and such reports, proxy material, and other
information concerning the Company also can be inspected and copied at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a registration statement on Form S-3
(the "Registration Statement") under the Securities Act with respect to the
shares of common stock offered by this prospectus. This prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto, to which reference is made. Statements made in this
prospectus as to the contents of any contract, agreement, or other document
referred to are not necessarily complete, and in each instance reference is
made to the copy of such contract, agreement, or other document filed as an
exhibit to the Registration Statement, and each such statement is qualified in
its entirety by such reference. Any interested party may inspect the
Registration Statement, and the exhibits and schedules thereto, without charge,
at the public reference facilities of the Commission and may obtain copies of
all or any portion of the Registration Statement from the Commission upon
payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (Commission File No. 1-2572), are
incorporated in this prospectus by reference and shall be deemed to be a part
hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1994;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
November 30, 1994, and February 28, 1995; and
(c) The Company's Current Reports on Form 8-K dated November 22, 1994;
December 30, 1994; February 14, 1995; and February 24, 1995.
2
<PAGE> 4
(d) The description of the Company's common stock contained in the Company's
Form S-16, Registration Statement under the Securities Act, Registration
Number 2-74435, filed October 16, 1981, including any amendment or
report filed for the purpose of updating such description.
All other documents filed by the Company pursuant to Section 13(a), 13(c), 14,
or 15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this prospectus and to be a part hereof from the
date of the filing of such documents. Any statement contained in this
prospectus, in a supplement to this prospectus, or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained herein or in any subsequently filed supplement to this prospectus or
in any document that also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
The Company will provide without charge to each person to whom a copy of this
prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the documents referred to above, which have
been or may be incorporated in this prospectus by reference, other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference in such documents. Written or telephone requests for such copies
should be directed to J. D. Neal, Vice President, Chief Financial Officer, and
Treasurer, ONEOK Inc., 100 West Fifth Street, Post Office Box 871, Tulsa,
Oklahoma 74102-0871, telephone number (918) 588-7000.
3
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in the prospectus and by the more detailed
information and the financial statements and notes appearing in the
incorporated documents.
THE COMPANY
ONEOK Inc. and its subsidiaries (the "Company") engage in several aspects of
the energy business. The Company purchases, gathers, compresses, transports,
and stores natural gas for distribution to consumers. It transports gas for
others, leases pipeline capacity to others for their use in transporting gas,
and is a partner in two natural gas transmission systems that transport gas for
others. The Company explores for and produces oil and gas, extracts and sells
natural gas liquids, and is engaged in the gas marketing business. In
addition, it leases and operates a headquarters office building (leasing excess
space to others) and owns and operates a related parking facility. As a
regulated natural gas utility, the Company distributes natural gas to
approximately 715,000 customers in a service area comprising approximately
three-fourths of the state of Oklahoma, thereby meeting the natural gas needs
of over two million people.
The Company was incorporated in Delaware on November 10, 1933.
The principal executive offices of the Company are located at 100 West Fifth
Street, Tulsa, Oklahoma, and the telephone number is (918) 588-7000.
On February 3, 1995, a certain Agreement and Plan of Merger (the "Merger
Agreement") was entered into among ONEOK Gas Marketing Company, a Delaware
corporation ("ONEOK Marketing"); ONEOK Inc., a Delaware corporation and sole
shareholder of ONEOK Marketing ("ONEOK"); Ward Gas Services, Inc., an Oklahoma
corporation ("Ward Services"); Ward Petroleum Corporation, an Oklahoma
corporation and sole shareholder of Ward Services ("Ward"); Comanche Gas
Marketing Company, an Oklahoma corporation ("Comanche"); and James Christopher
Walters, Jr., and LaVonne Diane Walters, as Trustees of the James Christopher
Walters, Jr., Trust dated August 3, 1983, sole shareholder of Comanche (the
"Walters Trust"), pursuant to which Ward Services and Comanche were merged with
and into ONEOK Marketing with ONEOK Marketing being the surviving corporation
(the "Merger Transaction"). As a result of the Merger Transaction, Ward and
the Walters Trust received 204,600 and 125,400 shares, respectively, of the
common stock of ONEOK.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of shares of
common stock in this offering.
4
<PAGE> 6
COMMON STOCK DIVIDENDS AND PRICE RANGE
The Company has paid regular quarterly dividends on its common stock for the
past six years, since February 1989. Dividends declared per share on common
stock (adjusted for a 2 for 1 stock split effective February 1990) for each
fiscal year beginning with the 1990 fiscal year are as follows:
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$.75 $.82 $.96 $1.06 $1.11 $1.12*
</TABLE>
*Estimated
Future dividends will depend on the Company's earnings, its financial
condition, and other factors.
The Company's common stock is traded on the New York Stock Exchange. The table
below shows the high and low sales prices of the Company's common stock for the
periods indicated, as reported by "The Wall Street Journal" as New York Stock
Exchange--Composite Transactions, and dividends declared during such periods.
<TABLE>
<CAPTION>
Price Range
----------------
Fiscal Year Ended August 31 High Low Dividends
--------------------------- ---- --- ---------
<S> <C> <C> <C>
1992
1st Quarter......................$15 7/8 $13 1/8 $.21
2nd Quarter.......................17 1/4 15 1/8 .25
3rd Quarter.......................17 14 .25
4th Quarter.......................17 1/2 14 7/8 .25
1993
1st Quarter......................$18 3/8 $16 1/4 $.25
2nd Quarter.......................20 5/8 16 7/8 .27
3rd Quarter.......................24 7/8 20 .27
4th Quarter.......................26 1/4 20 3/8 .27
1994
1st Quarter......................$22 5/8 $19 5/8 $.27
2nd Quarter.......................20 1/2 17 5/8 .28
3rd Quarter.......................18 1/2 15 3/4 .28
4th Quarter.......................19 3/4 15 3/4 .28
1995
1st Quarter......................$18 $15 7/8 $.28
2nd Quarter.......................18 3/8 17 .28
</TABLE>
The last reported sale price of the common stock on April 7, 1995, on the New
York Stock Exchange was $19.125 per share. There were approximately 11,976
beneficial owners of the common stock on March 30, 1995.
BUSINESS
General. ONEOK Inc. and its divisions and subsidiaries, hereinafter referred
to as the Company, engage in natural gas distribution, transmission, and
storage operations; oil and gas energy operations; and certain other
operations, as described below.
5
<PAGE> 7
Distribution, Transmission, and Gathering. Oklahoma Natural Gas Company
purchases, distributes, and sells natural gas and leases pipeline capacity.
ONG Transmission Company and four subsidiaries gather, compress, transport, and
store natural gas for intrastate distribution, transport gas in interstate
commerce, and lease pipeline capacity. In addition, two subsidiaries own
interests in partnerships that operate natural gas transmission systems.
Exploration and production. ONEOK Exploration Company and ONEOK Resources
Company explore for and produce natural gas and oil.
Gas Processing. ONEOK Products Company extracts and sells natural gas liquids
and buys and sells natural gas.
Other Operations. ONEOK Gas Marketing Company markets natural gas. Other
subsidiaries operate the headquarters office building and a parking garage.
DISTRIBUTION AND TRANSMISSION OPERATIONS
Two operating divisions, Oklahoma Natural Gas Company and ONG Transmission
Company, along with four subsidiaries, ONG Red Oak Transmission Company, ONG
Sayre Storage Company, ONG Western, Inc., and ONEOK Services, Inc.
(collectively, "ONG"), constitute a fully integrated intrastate natural gas
distribution and transmission segment which purchases, stores, transports, and
distributes natural gas for sale to wholesale and retail customers primarily in
the State of Oklahoma and leases pipeline capacity to customers for their use
in transporting natural gas to their facilities. In addition, ONG Transmission
Company and the four transmission subsidiaries transport gas for others under
Section 311(a) of the Natural Gas Policy Act of 1978 (the "NGPA"). Oklahoma
Natural Gas Company, ONG Transmission Company, and the four subsidiaries are
consolidated for ratemaking purposes by the Oklahoma Corporation Commission.
For regulatory purposes, ONG Transmission Company Division, which transports
gas in interstate commerce under Section 311(a) of the NGPA, is being treated
as a separate entity by the Federal Energy Regulatory Commission ("FERC"). ONG
purchases natural gas from gas processing plants, producing gas wells, and
pipeline suppliers, and utilizes five underground storages as necessary to
deliver natural gas to approximately 715,000 customers in 292 communities in
Oklahoma. The Company's largest markets are in the Oklahoma City and Tulsa
metropolitan areas. ONG Sayre Storage Company leases the excess capacity in
its underground storage facility to Natural Gas Pipeline Company of America.
ONG also sells natural gas at wholesale to other distributors serving 44
Oklahoma communities. ONG serves an estimated population of over 2 million.
The all-time peak gas deliveries during a single day was 2.02 billion cubic
feet of gas delivered on February 10, 1981. The peak for the most recent
fiscal year was 1.59 billion cubic feet delivered on February 9, 1994.
The Company is currently in the process of reorganizing and consolidating the
pipeline gathering and transmission operations into two separate subsidiaries.
The Company leases space in its pipeline system under its PCL program to third
party end users to allow them to buy gas in the field and transport it to their
facilities. The Company, at times, has leased part of its gas storage
6
<PAGE> 8
to third parties, allowing them to store gas in the Company's gas storage
facilities.
Gas reserves committed to ONG's system are not subject to priority allocations
or dedicated to certain classes of customers, except for certain low priced gas
under the SISP Program, which is allocated to industrial customers. ONG's rate
schedules contain an "Order of Curtailment" that provides for first reducing or
totally discontinuing gas service to the very large industrial users, who are
required to have standby fuel-burning equipment, and graduating down to
requesting residential and commercial customers to reduce their gas
requirements to an amount essential for public health and safety.
Caney River Transmission Company has a 25 percent interest in Ozark Gas
Transmission System ("Ozark"), a general partnership. Ozark owns a
transmission pipeline and related facilities originating in Pittsburg County,
Oklahoma, and connecting with existing facilities belonging to an interstate
gas transmission company in White County, Arkansas. The partners are in the
process of selling Ozark.
TransTex Pipeline Company has a 25 percent limited partnership interest in Red
River Pipeline ("Red River"), a limited partnership, which owns a transmission
pipeline system and related facilities. Red River originates in Hemphill
County, Texas, and terminates in Pecos County, Texas, where it connects with
Oasis Pipeline. In 1993, the system was modified to allow bidirectional flow.
The system is regulated by the Texas Railroad Commission.
OkTex Pipeline Company, regulated by the FERC, owns short transmission
pipelines between Oklahoma and Texas which connect ONG's intrastate system to
the intrastate system of Lone Star Gas Company, a division of ENSERCH
Corporation and Red River Pipeline. The Company has the capacity to move up to
200 million cubic feet of gas per day into Lone Star's System in Texas.
ONEOK Technology Company has a fifty percent (50%) interest in Natural Energy
Products Company, which was formed in 1992 to develop and market a
meter-setting device that allows gas utilities to change meters without
shutting off the flow of gas to the customer. The devices are sold through an
exclusive representative in the United States which also manufactures and
markets the devices in Europe under a license from Natural Energy.
EXPLORATION AND PRODUCTION OPERATIONS
Two subsidiaries (collectively, the "Subsidiaries"), ONEOK Exploration Company
and ONEOK Resources Company, are engaged in oil and gas exploration,
development, and production. As of August 31, 1994, the Subsidiaries had
working interests in 372 gas wells and 140 oil wells. A number of these wells
are multiple completions. Such interests are in wells located in Oklahoma,
Louisiana, Alabama, and Texas.
The Subsidiaries participated in the drilling of 37 working interest wells
during the 1994 fiscal year, compared with 35 wells the previous year. In
1994, 62 percent of such wells were completed as commercial producers
compared with 69 percent in 1993. During the 1994 fiscal year, 17 wells were
7
<PAGE> 9
completed as gas wells and 6 as oil wells. The remaining 14 wells were dry
holes. In addition, the Subsidiaries farmed out an additional 8 wells for
drilling by others. Of these, 1 oil well and 5 gas wells were completed and
the remaining 2 were dry holes.
The Subsidiaries' share of production during the 1994 fiscal year averaged
1,567 barrels of oil per day and 22,035 million cubic feet of natural gas per
day. On August 31, 1994, the Subsidiaries had a total of 24,960 net
undeveloped leasehold acres, of which 51 percent is located in Oklahoma, 36
percent in Texas, and 11 percent in Arkansas.
The Subsidiaries are currently concentrating exploration activities in Oklahoma
and Texas, and for the present are pursuing a relatively conservative drilling
and leasehold acquisition program due to uncertainty about gas price trends.
The Subsidiaries acquired reserves in Alabama in 1993 and in Louisiana in 1994.
GAS PROCESSING OPERATIONS
ONEOK Products Company ("Products") owns varying interests in 16 plants which
extract liquids from natural gas. Products' share of the liquids produced by
these plants averaged 12,680 barrels per day during 1994. Products also
purchased and resold 70,496 Mcf of natural gas per day, including intercompany
transactions, during the fiscal year. Products is participating with other
plant owners in programs to acquire more gas volumes for processing through the
plants to increase liquid recoveries.
OTHER OPERATIONS
ONEOK Gas Marketing Company is engaged in the marketing of natural gas and,
through the Merger Transaction, recently acquired the remaining interest in a
partnership which markets natural gas. The partnership has recently been
moving approximately 400 to 450 million cubic feet of gas per day, primarily
out of Oklahoma.
ONEOK Parking Company operates a parking garage with 1,179 parking spaces.
ONEOK Leasing Company operates a 500,000 square foot office building in which
the Company's headquarters is located and leases excess space to others.
ACQUISITION ACTIVITIES
The Company is interested in acquiring gas distribution and transmission
facilities which will enhance its operations. In 1991, the Company acquired
Lone Star Gas Company's Oklahoma properties located in south-central Oklahoma,
which added 36,000 customers, 700 miles of distribution pipeline, and 1,000
miles of transportation pipeline. It also provided access to the Texas gas
market. During 1993, the Company negotiated for the purchase of gas
distribution properties in Kansas and northeastern Oklahoma involving
approximately 190,000 customers. Negotiations were terminated by the owner.
The Company is prepared to pursue other opportunities as they occur.
8
<PAGE> 10
The Company is also interested in acquiring oil and gas producing properties.
Properties were acquired in Alabama in 1993 and in Louisiana in 1994. The
Company is actively pursuing other opportunities as they occur. The Company's
current strategy is to acquire such properties while maintaining a conservative
capital budget.
The Company recently acquired the remaining interest in a partnership which
markets natural gas. See "Other Operations" above.
SELLING STOCKHOLDERS
The following table sets forth certain information as of the date of this
Prospectus with respect to the Selling Stockholders. If all the shares offered
pursuant to this prospectus are sold, none of the Selling Stockholders will
beneficially own any shares of the Company's common stock. Any or all of the
shares offered hereby may be offered for sale by any of the Selling
Stockholders from time to time. Unless otherwise noted, each Selling
Stockholder has sole voting and investment power with respect to such shares.
<TABLE>
<CAPTION>
Number of
Shares Owned Number of
Prior to Shares
Offering Which May
------------------- Be Sold
Percent Pursuant to
Selling Stockholder Shares of Class This Prospectus
------------------- ------ -------- ---------------
<S> <C> <C> <C>
Ward Petroleum Corporation 204,600 less than 1% 204,600
The Walters Trust (1) 125,400 less than 1% 125,400
</TABLE>
(1) James Christopher Walters, Jr., a Trustee of the Walters Trust, is
President of ONEOK Gas Marketing Company.
______________
In connection with the Merger Transaction, the Company and the Selling
Stockholders executed a Shelf Registration Agreement dated February 23, 1995
(the "Registration Agreement"), pursuant to which the Company agreed to prepare
and file a "shelf" registration statement on Form S-3 pursuant to Rule 415
under the Securities Act or any similar rule that may be adopted by the
Commission with respect to the shares acquired by the Selling Stockholders in
the Merger Transaction (together with any amendments, including post-effective
amendments and supplements thereto, to the "Shelf Registration"), to use its
reasonably best efforts to cause the Shelf Registration to be declared
effective by the Commission within 60 days of the date of the Registration
Statement, and to keep the Shelf Registration continuously effective for a
period of 24 months from the date it becomes effective or, if earlier, until
(i) all the shares are sold in accordance with the Shelf Registration, or (ii)
in the opinion of Counsel for the Company, satisfactory to the Selling
Stockholders, registration of the shares is no longer required under the
Securities Act and the holder may sell all remaining shares in the open market
without limitation as to volume and without being required to file any forms or
reports with the Commission under the Securities Act or the regulations
thereunder. The Company has also agreed to cause all the shares covered by
9
<PAGE> 11
the Shelf Registration to be listed on the New York Stock Exchange and any
other exchange on which the Company's common stock becomes listed. This
Prospectus constitutes a part of the Shelf Registration filed by the Company in
accordance with the Registration Agreement. The Company is responsible for and
will bear the costs and expenses of preparing and maintaining the Shelf
Registration.
PLAN OF DISTRIBUTION
Shares of common stock may be sold pursuant to this prospectus from time to
time, in one or more transactions, by the Selling Stockholders, or by pledgees,
donees, transferees, or other successors in interest. Such sales may be made
on the New York Stock Exchange or any other exchange on which the Company's
common stock is listed, in negotiated transactions, or in a combination of any
such methods of sale. The selling price of the shares of common stock may be
at the market price prevailing at the time of sale, at a price related to the
prevailing market price, or at a negotiated price. Any shares which qualify
for sale under Rule 144 or Rule 144A under the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this prospectus.
EXPERTS
The consolidated financial statements and schedules of ONEOK Inc. as of August
31, 1994 and 1993, and for each of the years in the three-year period ended
August 31, 1994, have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
report of KPMG Peat Marwick LLP covering the August 31, 1994, financial
statements refers to a change in method of accounting for certain
postemployment and postretirement benefit obligations.
To the extent KPMG Peat Marwick LLP audits and reports on the consolidated
financial statements of ONEOK Inc. issued at future dates, and consents to the
use of their reports thereon, such financial statements also will be
incorporated by reference in the Registration Statement in reliance upon their
report and said authority.
LEGAL MATTERS
The legality of the common stock offered hereby will be passed upon for the
Company by Messrs. Arrington Kihle Gaberino & Dunn, P.C., Tulsa, Oklahoma.
10
<PAGE> 12
__________________ ___________________
<TABLE>
<S> <C>
No person has been authorized to give 330,000 Shares
any information or make any representa- Common Stock
tions in connection with this offering
other than those contained in this
prospectus and, if given or made, such
other information and representations
must not be relied upon as having been
authorized. This prospectus does not
constitute an offer to sell or a
solicitation of an offer to buy any
securities other than the registered
securities to which it relates or any
offer to sell or the solicitation of
an offer to buy such securities in ONEOK Inc.
any circumstances in which such offer
or solicitation is unlawful. Neither
the delivery of this prospectus nor
any sale made hereunder shall, under
any circumstances, create any implica-
tion that there has been no change in
the affairs of the Company since the
date hereof or that the information
contained herein is correct as of any
time subsequent to its date.
__________________ ___________________
TABLE OF CONTENTS P R O S P E C T U S
Page
---- ___________________
Available Information............ 2
Incorporation of Certain
Documents by Reference......... 2
The Company...................... 4
Use of Proceeds.................. 4
Common Stock Dividends
and Price Range................ 5
Business......................... 5
Selling Stockholders............. 9
Plan of Distribution............. 10 ________, 1995
Experts.......................... 10
Legal Matters.................... 10
</TABLE>
__________________ ___________________
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
All amounts, except SEC registration fees, are estimates.
<TABLE>
<S> <C>
SEC registration fee............... $ 2,169
Printing and copying expenses...... 1,000
Legal fees and expenses............ 10,000
Accounting fees and expenses....... 5,000
Miscellaneous...................... 1,000
-------
Total........................ $19,169
=======
</TABLE>
Item 15. Indemnification of Directors and Officers
Pursuant to Article VIII of the bylaws of the Company, upon authorization and
determination either (1) by the board of directors by a majority of a quorum
consisting of directors who were not parties to the action, suit, or proceeding
involved; (2) if such a quorum is not obtainable, or even if obtainable and a
quorum of disinterested directors so directs, by independent counsel in a
written opinion; or (3) by the stockholders, the Company is obligated to
indemnify any person who incurs liability by reason of the fact that he is or
was a director, officer, employee, or agent of the Company, or is or was
serving at its request as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise, or as a
member of any committee or similar body, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. However, in an action by
or in the right of the Company, no indemnification will be made if such person
shall be adjudged to be liable to the Company, unless such indemnification is
allowed by a court of competent jurisdiction.
Under an insurance policy obtained by the Company, coverage of Company officers
and directors against liability for neglect, errors, omissions, or breaches of
duty in their capacities as such as provided for both the Company, to the
extent that it is obligated to indemnify such officers and directors, and the
officers and directors themselves. Such coverage is provided in the amount of
$85,000,000, with a retained limit by the Company of $200,000. The insurance
company is obligated to pay any loss in excess of the $200,000 retained limit
and defense costs from the first dollar, up to the policy limit of $85,000,000.
Among the policy exclusions are those which exclude coverage for accounting for
profits made within the meaning of Section 16(b) of the Securities Exchange Act
of 1934, claims based upon or attributable to directors and officers gaining
any personal profit or advantage to which such individuals are not legally
entitled, and for any claims brought about or attributable to the dishonesty of
an officer or director.
The registrant has been advised that, in the opinion of the Securities and
Exchange Commission, provisions providing for the indemnification by a
II-1
<PAGE> 14
corporation of its officers, directors, and controlling persons against
liabilities imposed by the Securities Act of 1933 are against public policy as
expressed in said Act and are therefore unenforceable. It is recognized that
the above-summarized provisions of the registrant's bylaws and the applicable
Delaware General Corporation Law may be sufficiently broad to indemnify
officers, directors, and controlling persons of the registrant against
liabilities arising under said Act. Therefore, in the event that a claim of
indemnification against liability under said Act (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) shall be asserted by an officer, director, or controlling person
under said provisions, the registrant will, unless in the opinion of its
counsel the question has already been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question of whether or not such
indemnification by it is against public policy as expressed in said Act and
will be governed by the final adjudication of such issue.
Item 16. Exhibits*
(2)** Agreement and Plan of Merger
(3)(a)*** Third Restated Certificate of Incorporation of ONEOK Inc.
(3)(b)** By-Laws of ONEOK Inc., as Amended
(5)** Opinion and consent of Arrington Kihle Gaberino & Dunn, Inc., a
Professional Corporation
(23)(a)** Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants
(23)(b)** Consent of Arrington Kihle Gaberino & Dunn, a Professional
Corporation (included in Exhibit 5)
(24)** Powers of Attorney (Included on pages II-4 and II-5)
____________
* Exhibits excluded are not applicable
** Filed herewith
*** Incorporated by reference to Exhibit (3)(a) to Annual Report on Form
10-K dated August 31, 1994.
Item 17. Undertakings
1. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 15
2. Insofar as indemnification of liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in said Act and is therefore unenforceable. In the event that a claim of
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has already been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether or not such indemnification by it is against public policy as expressed
in said Act and will be governed by the final adjudication of such issue.
3. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post- effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
II-3
<PAGE> 16
POWER OF ATTORNEY
The person whose signature appears below hereby authorizes B. M. Van Meter and
J. D. Neal, or either of them, as attorneys-in-fact with full power of
substitution, to execute in the name and on behalf of such person, in the
capacity stated below, and to file any and all amendments to this Registrations
Statement, including any and all post-effective amendments and all instruments
necessary or incidental in connection therewith.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the registrant has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa and
the State of Oklahoma, on this 30th day of March, 1995.
ONEOK Inc.
By: LARRY W. BRUMMETT
---------------------------------
Larry W. Brummett
Chairman of the Board, President,
and Chief Executive Officer
II-4
<PAGE> 17
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes Larry W.
Brummett, B. M. Van Meter, or J. D. Neal, or any of them, as attorneys-in-fact
with full power of substitution, to execute in the name and on behalf of each
person, individually and in each capacity stated below, and to file any and all
amendments to this Registration Statement, including any and all post-effective
amendments and all instruments necessary or incidental in connection therewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated, in the City of Tulsa and the State of Oklahoma, on this 30th day of
March, 1995.
<TABLE>
<S> <C>
LARRY W. BRUMMETT J. D. NEAL
- -------------------------- --------------------------
Larry W. Brummett J. D. Neal
Chairman of the Board, Vice President, Chief
President, Chief Executive Financial Officer, and
Officer, and Director Treasurer (Principal
Financial and Accounting
Officer)
W. M. BELL D. A. NEWSOM
- -------------------------- --------------------------
W. M. Bell D. A. Newsom
Director Director
D. R. CUMMINGS G. D. PARKER
- -------------------------- --------------------------
D. R. Cummings G. D. Parker
Director Director
W. L. FORD J. D. SCOTT
- -------------------------- --------------------------
W. L. Ford J. D. Scott
Director Director
J. M. GRAVES G. R. WILLIAMS
- -------------------------- --------------------------
J. M. Graves G. R. Williams
Director Director
S. J. JATRAS S. L. YOUNG
- -------------------------- --------------------------
S. J. Jatras S. L. Young
Director Director
B. H. MACKIE
- --------------------------
B. H. Mackie
Director
</TABLE>
II-5
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
(2)* Agreement and Plan of Merger
(3)(a)** Third Restated Certificate of incorporation
of ONEOK Inc.
(3)(b)* Bylaws of ONEOK Inc., as Amended
(5)* Opinion and consent of Arrington Kihle
Gaberino & Dunn, Inc., a Professional
Corporation
(23)(a)* Consent of KPMG Peat Marwick LLP, independent
Certified Public Accountants
(23)(b)* Consent of Arrington Kihle Gaberino & Dunn,
a Professional Corporation (included in
Exhibit 5)
(24)* Powers of Attorney (Included on pages II-4
and II-5)
</TABLE>
____________
* Filed herewith
** Incorporated by reference to Exhibit (3)(a) to Annual Report on Form
10-K dated August 31, 1994.
<PAGE> 1
Exhibit (2)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of
February 3 , 1995, by and among ONEOK Gas Marketing Company, a Delaware
corporation ("ONEOK Marketing" or the "Surviving Corporation"); ONEOK Inc., a
Delaware corporation and sole shareholder of ONEOK Marketing ("ONEOK"); Ward
Gas Services, Inc., an Oklahoma corporation ("Ward Services"); Ward Petroleum
Corporation, an Oklahoma corporation and sole shareholder of Ward Services
("Ward"); Comanche Gas Marketing Company, an Oklahoma corporation ("Comanche");
James Christopher Walters, Jr. and LaVonne Diane Walters, as Trustees of the
James Christopher Walters, Jr. Trust dated August 3, 1983, sole shareholder of
Comanche (the "Walters Trust").
WITNESSETH:
WHEREAS, it is the desire of ONEOK to acquire Ward Services and
Comanche through a merger with and into its wholly-owned subsidiary, ONEOK
Marketing;
WHEREAS, it is the desire of Ward and the Walters Trust that ONEOK
acquire Ward Services and Comanche through such merger; and
WHEREAS, in order to carry out the foregoing objectives, ONEOK, Ward
and Walters desire to enter into this Agreement to merge Ward Services and
Comanche into ONEOK Marketing.
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the parties agree as follows:
I. Terms of the Merger.
A. The Merger. Pursuant to the terms and provisions of this
Agreement, the Delaware General Corporation Act (the "Delaware Corporate Law")
and the Oklahoma General Corporation Act (the "Oklahoma Corporate Law"), Ward
Services and Comanche shall merge with and into ONEOK Marketing (the "Merger").
B. Merging Corporations. Ward Services and Comanche shall be the
merging corporations under the Merger and their corporate identities and
existence, separate and apart from ONEOK Marketing, shall cease upon
consummation of the Merger.
C. Surviving Corporation. ONEOK Marketing shall be the surviving
corporation in the Merger. No change in the certificate of incorporation,
bylaws, directors or officers of ONEOK Marketing shall be effected by the
Merger.
<PAGE> 2
D. Effect of Merger. The Merger shall have all of the effects
provided by the Delaware Corporate Law and the Oklahoma Corporate Law. It is
the understanding of the parties that the Merger shall constitute a
reorganization within the provisions of Section 368(a)(2)(D) of the Internal
Revenue Code of 1986, as amended (the "Code").
E. Consideration.
1. ONEOK has reserved 330,000 shares of its authorized but
unissued shares of its common stock, without par value, (the "Common Stock"),
for the purpose of the transactions contemplated by this Agreement and shall
cause such shares to be transferred to ONEOK Marketing on or before the Closing
Date. Between the date of this Agreement and the Closing, as hereinafter
defined, ONEOK shall not authorize any stock dividend, stock split,
recapitalization, or exchange of shares with respect to, or rights in respect
to, its Common Stock without an equitable adjustment in the number of shares to
be received by Ward and the Walters Trust under this Agreement.
2. At the Effective Time (as hereinafter defined):
a. All of the issued and outstanding shares of stock of Ward
Services shall be converted into the right to receive 204,600 shares of the
Common Stock and $57,288.00 in cash.
b. All of the issued and outstanding shares of stock of Comanche
shall be converted into the right to receive 125,400 shares of the Common Stock
and $35,112.00 in cash.
c. All of the shares of stock of Ward Services and Comanche, by
virtue of the Merger and without any action on the part of the holders thereof
shall no longer be outstanding and shall be cancelled and retired and shall
cease to exist, and each holder of any certificate or certificates which,
immediately prior to the Effective Time represented outstanding shares of Ward
Services or Comanche (the "Certificates") shall cease to have any rights with
respect to such shares, except the right of the holder to receive shares of the
Common Stock upon the surrender of such Certificates in accordance with Section
I.G below.
d. Each share of common stock, par value $1.00 per share, of
ONEOK Marketing outstanding immediately prior to the Effective Date shall
remain unchanged except to become one share of Common Stock of the Surviving
Corporation.
F. Closing Date. The closing of the transactions contemplated
herein (the "Closing") shall take place on February __, 1995, or on such other
date as ONEOK, Ward and the Walters Trust may mutually agree (the "Closing
Date"). The Merger shall be
-2-
<PAGE> 3
effective upon the filing of a Certificate of Merger with the Secretary of
State of Delaware and the Secretary of State of Oklahoma (the "Effective Time")
which shall occur on the Closing Date.
G. Exchange Procedure; Surrender of Certificates; Etc.
1. At the Closing, Ward and the Walters Trust shall deliver to
ONEOK the Certificate or Certificates evidencing shares of common stock in Ward
Services and Comanche which were converted into the right to receives shares of
the Common Stock in the Merger. Upon surrender of such Certificates and other
required documents, the holder of each such Certificate shall be entitled to
receive, in exchange therefor, certificates for shares of the Common Stock as
provided in Section I.E above.
2. Each of Ward and the Walters Trust represents and warrants to
ONEOK and ONEOK Marketing that the shares of the Common Stock it will receive
in the Merger are being acquired for its own separate account for investment
only and not with a view to, or for sale in connection with, any distribution
of the Common Stock in violation of the Securities Act of 1933, as amended (the
"Securities Act"), or any rule or regulation under the Securities Act. Neither
Ward nor the Walters Trust shall take, or cause to be taken, any action that
would deem it to be an underwriter (as defined in the Securities Act) of the
Common Stock. Ward and the Walters Trust understand that (a) the Common Stock
may not be transferred or sold for value in the absence of registration or
qualification or an exemption from registration or qualification under the
Securities Act, the Oklahoma Securities Act, and the securities or Blue Sky
laws of any other state, as required, (b) a stop transfer instruction will be
issued with respect to the Common Stock, and (c) the following legend will be
placed on the certificates representing the Common Stock to be received in the
Merger:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA
SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OR QUALIFICATION OF THEM
UNDER THE SECURITIES ACT OF 1933, THE OKLAHOMA SECURITIES ACT
AND THE SECURITIES OR BLUE SKY LAWS OF ANY OTHER STATE, AS
REQUIRED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED UNDER
SUCH ACTS AND/OR LAWS.
-3-
<PAGE> 4
II. Representations and Warranties of Ward.
Ward hereby represents and warrants to ONEOK as follows:
A. Organization and Standing; Charter and Bylaws. Both Ward and
Ward Services are corporations duly organized and existing under, and by virtue
of, the laws of the State of Oklahoma and are in good standing under such laws.
Both Ward and Ward Services have the requisite corporate power to own and
operate their properties and assets, and to carry on their businesses as
presently conducted and as proposed to be conducted. Both Ward and Ward
Services are qualified, licensed or domesticated as foreign corporations in any
jurisdiction where the nature of their activities and of properties owned or
leased by them makes such qualification, licensing or domestication necessary
at this time. Both Ward and Ward Services have furnished ONEOK with copies of
their respective certificates of incorporation and bylaws. Said copies are
true, correct and complete and contain all amendments through the date of this
Agreement.
B. Corporate Power. Both Ward and Ward Services have all
requisite legal and corporate power to enter into this Agreement and to carry
out and perform their obligations under the terms of this Agreement.
C. Subsidiaries. Ward Services does not own, directly or
indirectly, shares of stock or other interests in any corporation or any
interest in a limited liability company, partnership, joint venture, or other
entity, except that Ward Services owns a general partnership interest in Ward
Gas Services, an Oklahoma general partnership in which ONEOK Marketing holds
the other general partnership interest (the "Partnership") and Ward Services is
a party to a certain agreement dated November 17, 1992, with Comanche (the
"Ward Service/Comanche Agreement").
D. Capitalization. The authorized capital stock of Ward Services
is 50,000 shares of common stock, par value $1.00 per share. There are issued
and outstanding 15,000 shares of such common stock all of which are issued to
Ward. The issued and outstanding shares of such common stock have been duly
authorized and validly issued, are fully paid and nonassessable and were issued
in compliance with all applicable state and federal laws concerning the
issuance of securities. Other than as contemplated herein, there are no
outstanding rights, options, warrants, conversion rights, or agreements for the
purchase or acquisition from Ward Services of any shares of its capital stock.
E. Authorization. All corporate action on the part of Ward and
Ward Services and their directors and stockholders necessary for the
transaction contemplated in this Agreement have been taken. This Agreement is
a legal, valid and binding obligation of each of
-4-
<PAGE> 5
Ward and Ward Services, enforceable against each of Ward and Ward Services in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting
enforcement of creditors' rights, and except as limited by application of legal
principles affecting the availability of equitable remedies.
F. Financial Statements. The consolidated balance sheet of Ward
Services (including Ward Services' share of the assets and liabilities of the
Partnership) and related consolidated statements of earnings and retained
earnings and cash flows for the fiscal year ended January 31, 1994, accompanied
by a report thereon by KPMG Peat Marwick, and the unaudited consolidated
balance sheet (including Ward Services' share of the assets and liabilities of
the Partnership) and corresponding statements for the ten month period ended
November 30, 1994 (collectively, the "Financial Statements of Ward Services")
have been supplied to ONEOK, have been prepared in accordance with generally
accepted accounting principles consistently applied (except as disclosed
therein), and fairly present the financial condition and results of operations
of Ward Services (including Ward Services' share of the assets and liabilities
of the Partnership) as of the dates and for the periods thereof.
G. Changes in Financial Condition. Except as set forth on
Disclosure Schedule II, Item G, since January 31, 1994: (a) Ward Services has
not entered into any transaction which was not in the ordinary course of
business; (b) there has been no materially adverse change in the condition
(financial or otherwise), business, property, assets, or liabilities of Ward
Services, other than changes in the ordinary course of business, none of which
have been materially adverse; (c) there has been no damage to, destruction of
or loss of physical property (whether or not covered by insurance) materially
adversely affecting the business or operations of Ward Services; (d) Ward
Services has not declared or paid any dividend or made any distribution on
its stock, redeemed, purchased or otherwise acquired any of its stock, granted
any options to purchase shares of its stock, or issued any shares of its stock,
except as provided for by this Agreement; (e) Ward Services has not materially
increased the compensation of any officer, or the rate of pay of its employees
as a group, except as part of regular compensation increases in the ordinary
course of business; (f) Ward Services has not received notice that there has
been a loss of any of its major customers, or any material order cancellation;
(g) there has been no resignation or termination of employment of any key
officer or key employee of Ward Services and Ward Services does not know of the
impending resignation or termination of employment of any of its officers or
employees that if consummated would have a materially adverse effect on the
business of Ward Services; (h) there has been no labor dispute involving Ward
Services or its employees and none is pending or, to Ward Services' knowledge,
-5-
<PAGE> 6
threatened; and (i) to the knowledge of Ward Services, there has been no other
event or condition of any character pertaining to and materially adversely
affecting the assets or business of Ward Services.
H. Material Contracts and Commitments. Except as set forth on
Disclosure Schedule II, Item H, all the material contracts, commitments,
agreements, and instruments (excluding those relating to the Partnership) to
which Ward Services is a party are legal, valid, binding, and in full force and
effect in all material respects and enforceable by Ward Services in accordance
with their terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws of general application by affecting enforcement of
creditors' rights, and except as limited by application of legal principles
affecting the availability of equitable remedies. For purposes of this Section
II.H, a contract, commitment, agreement or instruments shall be considered
"material" if it extends for a duration longer than thirty (30) days or
involves consideration in excess of $10,000 in the aggregate. Ward Services is
not in material default under any of such contracts. A list of all such
material contracts, agreements and instruments is set forth in Disclosure
Schedule II, Item H hereto.
I. Compliance with Other Instruments, None Burdensome, etc. Ward
Services is not in violation of any term of its certificate of incorporation or
bylaws, or in any material respect of any mortgage, indenture, contract,
agreement, or instrument listed under Section II.H above, or, to the knowledge
of Ward Services, any judgment, decree, order, statute, rule, or regulation
applicable to it. The execution, delivery, and performance by Ward Services of
this Agreement, and the exchange of the securities pursuant hereto, will not
result in any such violation or be in conflict with or constitute a default
under any such term, or cause the acceleration of maturity of any loan or
material obligation to which Ward Services is a party or by which it is bound
or with respect to which it is an obligor or guarantor, or result in the
creation or imposition of any material lien, claim, charge, restriction, or
encumbrance of any kind whatsoever upon, or, to the knowledge of Ward Services
after due inquiry, given to any other person any interest or right (including
any right of termination or cancellation) in or with respect to any of the
material properties, assets, business or agreements of Ward Services. To the
knowledge of Ward after due inquiry, no such term or condition materially
adversely affects or in the future (so far as can reasonably be foreseen by
Ward Services at the date of this Agreement) may materially adversely affect
the business, property, prospects, conditions, affairs, or operations of Ward
Services.
J. Litigation, etc. Except as set forth on Disclosure Schedule
II, Item J, there are no actions, proceedings, or investigations pending (or,
to Ward's knowledge, any basis therefor
-6-
<PAGE> 7
or threat thereof), which, either in any case or in the aggregate, would, if
adversely determined, result in any adverse effect on the business, prospects,
conditions, affairs, or operations of Ward Services or in any of its properties
or assets, or in any impairment of the right or ability of Ward Services to
carry on its business as presently conducted, or in any material liability on
the part of Ward Services, or which question the validity of this Agreement or
any action taken or to be taken in connection herewith.
K. Governmental Consent, etc. Other than filings required under
the HSR Act (as hereinafter defined) and the filing of Certificates of Merger
with the Secretaries of State of Delaware and Oklahoma, no consent, approval,
or authorization of, or designation, declaration, or filing with, any
governmental unit is required on the part of Ward or Ward Services in
connection with the valid execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
L. Insurance. Ward Services has currently in force liability
insurance with insurance companies or associations, and under policies listed
and described in Disclosure Schedule II, Item L attached hereto, during the
periods described therein, and, except as set forth on Disclosure Schedule II,
Item L, Ward Services is not aware of any claims for personal injuries or
property damage by reason of neglect or oversight on the part of Ward Services
or its agents, servants, or employees now pending or threatened against Ward
Services and knows of no damage to personal property by Ward Services or their
agents, servants or employees, which might give rise to such claims, or if any
such routine claims have arisen they are adequately covered by such liability
insurance.
M. Patents, etc. Other than the trade name "Ward Gas Services,"
there are no patents, patent applications, registered trademarks, trademark
applications, trade names, and registered copyrights under which Ward Services
operates. Ward Services has not received any notice or claim of infringement
of any patent, invention, right, trademark, trade name or copyright of others
with respect to any process, method, formula or procedure used by Ward Services
in the present conduct of its business.
N. Title to and Condition of Properties. Except as set forth on
Disclosure Schedule II, Item G, Ward Services has good and marketable title to
all of its tangible and intangible property and assets including those
reflected in the Financial Statements of Ward Services (except such property or
assets as have since January 31, 1994, been sold or otherwise disposed of in
the ordinary course of business), and such property and assets are subject to
no mortgage or security interest, conditional sales contract, charge, lien or
encumbrance (except for the lien of current taxes not yet due and payable and
such imperfections of title, easements and
-7-
<PAGE> 8
encumbrances, if any, as are not substantial in character, amount or extent and
do not materially detract from the value of, or interfere with the present use
of the properties subject thereto or affected thereby, or otherwise materially
impair the business operations of Ward Services), and subsequent to January 31,
1994, Ward Services has not sold or disposed of any of its property and assets
or obligated itself to do so except in the ordinary course of business. Except
for such minor defects as are not substantial in character and which do not
have a materially adverse effect upon the validity thereof, all material and
personal property leases to which Ward Services is a party are valid and
effective, and there is not under any such lease any existing material default
or event which, with notice or lapse of time or both, would constitute a
material default and in respect of which Ward Services has not taken reasonable
steps to prevent such a default from occurring.
O. Taxes. Both Ward and Ward Services, as appropriate, have
timely filed all consolidated tax returns that are required to have been filed
prior to the date of this Agreement with appropriate federal, state, county and
local governmental agencies or instrumentalities, and each of the returns
correctly reflects the consolidated income and tax liability required to be
shown therein. Both Ward and Ward Services have paid or established reserves
for all income, franchise, and other taxes due by them respectively as
reflected on the returns. The provisions for taxes due as shown in the
Financial Statements of Ward Services are sufficient for the payment in full of
all unpaid federal, state, county, and local taxes with respect to their
respective businesses and operations for the period then ended and all prior
periods. There is no pending dispute with any taxing authority relating to any
of the returns which, if determined adversely to the taxpayer, would result in
the assertion by any taxing authority of any valid deficiency in a material
amount for taxes against Ward Services. Federal income tax returns of Ward
(including Ward Services on a consolidated basis) have been audited through
January 31, 1991 and 1992.
P. Environmental Matters. As used in this Section II.P,
"Environmental Laws" means all local, state, and federal environmental, health,
and safety laws and regulations in all jurisdictions in which Ward Services has
done business or owned property, including, without limitation, the Federal
Resource Conservation and Recovery Act, the Federal Comprehensive Environmental
Response, Compensation and Liability Act, the Federal Clean Water Act, the
Federal Clean Air Act, and the Federal Occupational Safety and Heath Act.
Except as disclosed inDisclosure Schedule II, Item P, neither the
conduct nor operation of Ward Services nor any condition of any property ever
owned, leased or operated by it violates or violated Environmental Laws in any
respect material to the business of Ward
-8-
<PAGE> 9
Services, and no condition or event has occurred with respect to it or any such
property that, with notice or the passage of time, or both, would constitute a
violation material to the business of Ward Services to remedy, stabilize,
neutralize, clean up or otherwise alter the environmental condition of any such
property where the aggregate cost of such actions would be material to Ward
Services. Except as disclosed in Disclosure Schedule II, Item P, Ward Services
has not received any notice from any governmental agency or any other person or
entity that the operation of any facilities or any property ever owned, leased,
or operated by it, is or was in violation of any Environmental Laws or is
responsible (or potentially responsible) for remedying, establishing,
neutralizing, or cleaning up any pollutants, contaminants, or hazardous or
toxic waste, substances or materials at, on, or beneath any such property where
the aggregate cost thereof would be material to Ward Services.
Q. Compliance with the Law. Ward Services has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects and is
in compliance in all material respects with all applicable laws and
regulations.
R. ERISA Compliance. Ward Services is in compliance in all
material respects with the requirements of the Employee Retirement Income
Security Act of 1974, as amended.
S. Disclosure. This Agreement and the exhibits hereto, as they
apply to Ward and Ward Services, Disclosure Schedule II, the Financial
Statements of Ward Services, and all certificates of Ward delivered to ONEOK
pursuant to this Agreement, when read together, do not contain any untrue
statement of a material fact and do not omit to state a material fact necessary
in order to make the statements contained therein or herein not misleading.
III. Representations and Warranties of the Walters Trust.
The Walters Trust hereby represents and warrants to ONEOK as follows:
A. Organization and Standing; Charter and Bylaws. Comanche is a
corporation duly organized and existing under, and by virtue of, the laws of
the State of Oklahoma and is in good standing under such laws. Comanche has
the requisite corporate power to own and operate its properties and assets, and
to carry on its business as presently conducted. Comanche is qualified,
licensed or domesticated as a foreign corporation in any jurisdiction where the
nature of its activities and of the properties owned or leased by it makes such
qualification, licensing or domestication necessary at this time. Comanche has
furnished ONEOK with copies of its certificate of incorporation and bylaws.
Said copies are true, correct and
-9-
<PAGE> 10
complete and contain all amendments through the date of this Agreement.
B. Corporate Power. Comanche has all requisite legal and
corporate power to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement.
C. Subsidiaries. Comanche does not own, directly or indirectly,
shares of stock or other interests in any other corporation or any interest in
a limited liability company, partnership, joint venture, or other entity,
except that Comanche is a party to the Ward Services/Comanche Agreement.
D. Capitalization. The authorized capital stock of Comanche is
25,000 shares of common stock, $1.00 par value. There are issued and
outstanding 1,250 shares of such common stock all of which are issued to the
Walters Trust. The issued and outstanding shares of such common stock have
been duly authorized and validly issued, are fully paid and nonassessable and
were issued in compliance with all applicable state and federal laws concerning
the issuance of securities. There are no outstanding rights, options,
warrants, conversion rights, or agreements for the purchase or acquisition from
Comanche of any shares of its capital stock other than as contemplated herein.
E. Authorization. All corporate action on the part of Comanche
and its directors and stockholders necessary for the transaction contemplated
in this Agreement have been taken. This Agreement is a legal, valid and
binding obligation of Comanche, enforceable against Comanche in accordance with
its terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting enforcement of
creditors' rights, and except as limited by application of legal principles
affecting the availability of equitable remedies.
F. Liabilities. Disclosure Schedule III, Item F lists all of the
material liabilities of Comanche.
G. Changes in Financial Condition. Since February 1, 1993,
except as set forth on Disclosure Schedule III, Item G: (a) Comanche has not
entered into any transaction which was not in the ordinary course of business;
(b) there has been no materially adverse change in the condition (financial or
otherwise), business, property, assets, or liabilities of Comanche other than
changes in the ordinary course of business, none of which have been materially
adverse; (c) there has been no damage to, destruction of or loss of physical
property (whether or not covered by insurance) materially adversely affecting
the business or operations of Comanche; (d) Comanche has not declared or paid
any dividend or made any distribution on its stock, redeemed, purchased or
otherwise acquired any of its stock, granted any options to purchase shares
-10-
<PAGE> 11
of its stock, or issued any shares of its stock, except as provided for by this
Agreement; (e) Comanche has had no employees; (f) Comanche has not received
notice that there has been a loss of any of its major customers, or any
material order cancellation; and (g) to the knowledge of the Walters Trust,
there has been no other event or condition of any character pertaining to and
materially adversely affecting the assets or business of Comanche.
H. Material Contracts and Commitments. All the material
contracts, commitments, agreements, and instruments to which Comanche is a
party are legal, valid, binding, and in full force and effect in all material
respects and enforceable by Comanche in accordance with their terms except as
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
of general application by affecting enforcement of creditors' rights, and
except as limited by application of legal principles affecting the availability
of equitable remedies. Comanche is not in material default under any of such
contracts. A list of all such material contracts, agreements and instruments
is set forth in Disclosure Schedule III, Item H hereto.
I. Compliance with Other Instruments, None Burdensome, etc.
Comanche is not in violation of any term of its certificate of incorporation or
bylaws, or in any material respect of any mortgage, indenture, contract,
agreement, instrument, or, to the knowledge of the Walters Trust, any judgment,
decree, order, statute, rule, or regulation applicable to it. The execution,
delivery, and performance by Comanche of this Agreement, and the exchange of
the securities pursuant hereto, will not result in any such violation or be in
conflict with or constitute a default under any such term, or cause the
acceleration of maturity of any loan or material obligation to which Comanche
is a party or by which it is bound or with respect to which it is an obligor or
guarantor, or result in the creation or imposition of any material lien, claim,
charge, restriction, equity or encumbrance of any kind whatsoever upon, or, to
the knowledge of the Walters Trust, after due inquiry, given to any other
person any interest or right (including any right of termination or
cancellation) in or with respect to any of the material properties, assets,
business or agreements of Comanche. To the knowledge of the Walters Trust,
after due inquiry, no such term or condition materially adversely affects or in
the future (so far as can reasonably be foreseen by the Walters Trust at the
date of this Agreement) may materially adversely affect the business, property,
prospects, conditions, affairs, or operations of Comanche.
J. Litigation, etc. There are no actions, proceedings, or
investigations pending (or, to the Walters Trust's knowledge, any basis
therefor or threat thereof), which, either in any case or in the aggregate,
would, if adversely determined, result in any adverse effect on the business,
prospects, conditions, affairs, or
-11-
<PAGE> 12
operations of Comanche or in any of its properties or assets, or in any
impairment of the right or ability of Comanche to carry on its business as
presently conducted, or in any material liability on the part of Comanche, or
which question the validity of this Agreement or any action taken or to be
taken in connection herewith.
K. Governmental Consent, etc. Other than the filing of
Certificates of Merger with the Secretaries of State of Delaware and Oklahoma,
no consent, approval, or authorization of, or designation, declaration, or
filing with, any governmental unit is required on the part of the Walters Trust
in connection with the valid execution and delivery of this Agreement, or the
offer, sale or issuance of the securities, or the consummation of any other
transaction contemplated hereby.
L. Insurance. Comanche has no liability insurance currently in
force, and the Walters Trust is not aware of any claims for personal injuries
or property damage by reason of neglect or oversight on the part of Comanche or
its agents, servants, or employees now pending or threatened against Comanche
and knows of no damage to personal property by Comanche or its agents, servants
or employees, which might give rise to such claims.
M. Patents, etc. Other than the trade name "Comanche Gas
Marketing," there are no patents, patent applications, registered trademarks,
trademark applications, trade names, and registered copyrights under which
Comanche operates. Comanche has not received any notice or claim of
infringement of any patent, invention, right, trademark, trade name or
copyright of others with respect to any process, method, formula or procedure
used by Comanche in the present conduct of its business.
N. Title to and Condition of Properties. Disclosure Schedule
III, Item N is a list of all material tangible and intangible assets and
properties of Comanche as of the date of this Agreement. Comanche has good and
marketable title to such tangible and intangible property and assets, and such
property and assets are subject to no mortgage or security interest,
conditional sales contract, charge, lien or encumbrance (except for the lien of
current taxes not yet due and payable and such imperfections of title,
easements and encumbrances, if any, as are not substantial in character, amount
or extent and do not materially detract from the value of, or interfere with
the present use of the properties subject thereto or affected thereby, or
otherwise materially impair the business operations of Comanche. Comanche is
not a party to any material or personal property leases.
O. Taxes. Comanche has timely filed all tax returns that are
required to have been filed prior to the date of this Agreement with
appropriate federal, state, county and local governmental
-12-
<PAGE> 13
agencies or instrumentalities, and each of the returns correctly reflects the
income and tax liability required to be shown therein. Comanche has paid or
established reserves for all income, franchise, and other taxes due by it as
reflected on the returns. There is no pending dispute with any taxing
authority relating to any of the returns which if determined adversely to the
taxpayer would result in the assertion by any taxing authority of any valid
deficiency in a material amount for taxes against Comanche. Comanche's Federal
income tax returns have not been audited.
P. Environmental Matters. As used in this Section III.P,
"Environmental Laws" means all local, state, and federal environmental, health,
and safety laws and regulations in all jurisdictions in which Comanche has done
business or owned property, including, without limitation, the Federal Resource
Conservation and Recovery Act, the Federal Comprehensive Environmental
Response, Compensation and Liability Act, the Federal Clean Water Act, the
Federal Clean Air Act, and the Federal Occupational Safety and Heath Act.
Neither the conduct nor operation of Comanche nor any condition of any
property ever owned, leased or operated by it violates or violated
Environmental Laws in any respect material to the business of Comanche, and no
condition or event has occurred with respect to it or any such property that,
with notice or the passage of time, or both, would constitute a violation
material to the business of Comanche to remedy, stabilize, neutralize, clean up
or otherwise alter the environmental condition of any such property where the
aggregate cost of such actions would be material to Comanche. Comanche has not
received any notice from any governmental agency or any other person or entity
that the operation of any facilities or any property ever owned, leased, or
operated by it, is or was in violation of any Environmental Laws or is
responsible (or potentially responsible) for remedying, establishing,
neutralizing, or cleaning up any pollutants, contaminants, or hazardous or
toxic waste, substances or materials at, on, or beneath any such property where
the aggregate cost thereof would be material to Comanche.
Q. Compliance with the Law. Comanche has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects and is
in compliance in all material respects with all applicable laws and
regulations.
R. ERISA Compliance. Comanche is in compliance in all material
respects with the requirements of the Employee Retirement Income Security Act
of 1974, as amended.
S. Disclosure. This Agreement and the exhibits hereto, as they
apply to Comanche, Disclosure Schedule III, and all certificates
-13-
<PAGE> 14
of Comanche delivered to ONEOK pursuant to this Agreement, when read together,
do not contain any untrue statement of a material fact and do not omit to state
a material fact necessary in order to make the statements contained therein or
herein not misleading.
IV. Representations and Warranties of ONEOK.
ONEOK represents and warrants to Ward and the Walters Trust as follows:
A. Organization and Standing - ONEOK. ONEOK is a corporation
duly organized and existing under, and by virtue of, the laws of the State of
Delaware and is in good standing under its laws. ONEOK is qualified, licensed,
or domesticated as a foreign corporation in the State of Oklahoma.
B. Organization and Standing - ONEOK Marketing. ONEOK Marketing
is a corporation duly organized and existing under, and by virtue of, the laws
of the State of Delaware and is in good standing under its laws. ONEOK
Marketing is qualified, licensed, or domesticated as a foreign corporation in
each jurisdiction where the nature of its activities or the properties owned or
leased by it makes such qualification, licensing, or domestication necessary at
this time.
C. Corporate Powers. Both ONEOK and ONEOK Marketing have all
requisite legal and corporate power to enter into this Agreement and to carry
out and perform their respective obligations under the terms of this Agreement.
Neither the certificates of incorporation nor bylaws of ONEOK and ONEOK
Marketing, nor any other instrument to which ONEOK and ONEOK Marketing are
parties, or by which either is bound, nor any court order or any governmental
law, rule or regulation, will be violated by ONEOK's or ONEOK Marketing's
execution and consummation of this Agreement.
D. No Restriction. Neither ONEOK nor ONEOK Marketing is subject
to any order, judgment or decree, or the subject of any litigation, claim or
proceeding, pending or threatened, or any other restriction of any kind or
character known to ONEOK, which would affect its ability to carry out the
transactions contemplated by this Agreement.
E. Authorization. All corporate action on the part of ONEOK and
ONEOK Marketing, their directors, and stockholders necessary for the
transactions contemplated by this Agreement have been taken. This Agreement is
a legal, valid, and binding obligation of ONEOK and ONEOK Marketing,
enforceable against each corporation in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application affecting enforcement of creditors' rights, and except
-14-
<PAGE> 15
as limited by application of legal principles affecting the availability of
equitable remedies.
F. Governmental Consent, etc. Other than filings required under
the HSR Act (as hereinafter defined) and the filing of Certificates of Merger
with the Secretaries of State of Delaware and Oklahoma, no consent, approval,
or authorization of, or designation, declaration, or filing with, any
governmental unit is required on the part of ONEOK or ONEOK Marketing in
connection with the valid execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
G. Litigation, etc. There are no actions, proceedings, or
investigations pending, or to ONEOK's or ONEOK Marketing's knowledge, or any
basis therefor or threat thereof, which question the validity of this Agreement
or any other action taken or to be taken in connection herewith.
H. Disclosure. This Agreement and the exhibits hereto, as they
apply to ONEOK and ONEOK Marketing, and all certificates of ONEOK delivered to
Ward and the Walters Trust pursuant to this Agreement, when read together, do
not contain any untrue statement of a material fact and do not omit to state a
material fact necessary in order to make the statements contained therein or
herein not misleading.
I. SEC Reports. ONEOK has filed in a timely manner any and all
reports required to be filed pursuant to Sections 13 and 15(d) of the
Securities Exchange Act of 1934, as amended, since January 1, 1993. At the
respective times of filing thereof, none of such reports contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. Each audited and unaudited financial
statement (and the notes relating thereto) contained in such reports was
prepared in accordance with generally accepted accounting principles
consistently applied (except as otherwise indicated therein) and fairly
presents the consolidated financial condition of ONEOK and its subsidiaries as
of the respective date thereof and the related consolidated results of
operations, stockholders' equity, and cash flows or changes in financial
position, as applicable, of ONEOK and its subsidiaries for and during the
respective period covered thereby.
J. Common Stock. The Common Stock to be issued to Ward and the
Walters Trust hereunder is duly authorized and, when issued in accordance with
the terms of this Agreement, will be validly issued, fully paid and
nonassessable.
-15-
<PAGE> 16
V. Conditions to Ward's and Ward Services' Obligations.
The obligations of Ward and Ward Services to close the transaction on
the Closing Date are subject, unless waived by Ward, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions:
A. Representations, Warranties and Covenants. All
representations and warranties of ONEOK contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date as if
such representations and warranties were made at and as of the Closing Date,
and ONEOK and ONEOK Marketing shall have performed in all material respects all
agreements and covenants required hereby to be performed by them prior to or at
the Closing Date.
B. Consents. All consents, approvals and waivers from
governmental authorities and other parties necessary to permit ONEOK and ONEOK
Marketing to carry out the transactions as contemplated hereby shall have been
obtained.
C. No Governmental Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to adversely affect the transactions contemplated
hereunder.
D. HSR Act Waiting Period. All applicable waiting periods in
respect of the transaction contemplated by this Agreement under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), shall have expired at or prior to Closing.
E. Shelf Registration Agreement. ONEOK shall have executed and
delivered to Ward a Shelf Registration Agreement substantially in the form
attached hereto as Exhibit A (the "Shelf Registration Agreement").
F. Employment Agreements. ONEOK Marketing shall have executed
and delivered Employment Agreements with James C. Walters, Jr. and Donald T.
Jacobsen substantially in the forms attached hereto as Exhibits B and C (the
"Employment Agreements").
VI. Conditions to Comanche's and the Walters Trust's Obligations.
The obligations of Comanche and the Walters Trust to close the
transaction on the Closing Date are subject, unless waived by the Walters
Trust, to the satisfaction, on or prior to the Closing Date, of each of the
following conditions:
-16-
<PAGE> 17
A. Representations, Warranties and Covenants. All
representations and warranties of ONEOK contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date as if
such representations and warranties were made at and as of the Closing Date,
and ONEOK and ONEOK Marketing shall have performed in all material respects all
agreements and covenants required hereby to be performed by them prior to or at
the Closing Date.
B. Consents. All consents, approvals and waivers from
governmental authorities and other parties necessary to permit ONEOK and ONEOK
Marketing to carry out the transactions as contemplated hereby shall have been
obtained.
C. No Governmental Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to adversely affect the transactions contemplated
hereunder.
D. Shelf Registration Agreement. ONEOK shall have executed and
delivered the Shelf Registration Agreement.
E. Employment Agreements. ONEOK Marketing shall have executed
and delivered the Employment Agreements.
F. HSR Act Waiting Period. All applicable waiting periods in
respect of the transaction contemplated by this Agreement under the HSR Act,
shall have expired at or prior to Closing.
VII. Conditions to ONEOK's and ONEOK Marketing's Obligations.
The obligations of ONEOK and ONEOK Marketing to close the transaction
on the Closing Date are subject, unless waived by ONEOK, to the satisfaction on
or before the Closing Date of each of the following conditions:
A. Representations, Warranties and Covenants. All
representations and warranties of Ward and the Walters Trust contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date as if such representations and warranties were made at and as of
the Closing Date, and Ward and the Walters Trust shall have performed in all
material respects all agreements and covenants required hereby to be performed
by them prior to or at the Closing Date.
B. Consents. All consents, approvals and waivers from
governmental authorities and other parties necessary to permit Ward, Ward
Services, the Walters Trust and Comanche to carry out
-17-
<PAGE> 18
the transactions as contemplated hereby shall have been obtained by the Closing
Date.
C. No Governmental Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to adversely affect the transactions contemplated
hereunder.
D. HSR Act Waiting Period. All applicable waiting periods in
respect of the transaction contemplated by this Agreement under the HSR Act,
shall have expired at or prior to Closing.
E. Employment Agreements. James C. Walters and Donald T.
Jacobsen shall have executed and delivered the Employment Agreements to ONEOK
Marketing.
F. Termination of Other Agreements. On or before the Closing,
the following agreements (the "1992 Agreements") shall be terminated and all
further rights thereunder released by the parties thereto, effective as of
January 1, 1995:
1. Agreement dated November 17, 1992, between Ward Services (then
Ward Gas Marketing, Inc.) and Comanche.
2. Employment Agreement dated November 17, 1992, between Ward
Services (then Ward Gas Marketing, Inc.) and James C. Walters.
3. Letter Agreement dated October 14, 1992, among Ward Services
(then Ward Gas Marketing, Inc.), ONEOK Marketing, James C. Walters, Comanche,
and Comanche Gas Gathering, Inc.
VIII. The Closing Procedure.
A. General Conditions to Closing. As a condition precedent to
the Closing of the transactions under this Agreement, on or before the Closing
Date, Ward Services' capital account in the Partnership shall be estimated as
of January 1, 1995 ("Ward Services' Capital Account"), and funds equal to the
estimated balance in Ward Services' Capital Account shall be distributed to
Ward Services to be distributed by dividend or other suitable means to Ward
immediately prior to the Closing. Ward and ONEOK Marketing shall remain liable
to each other for future adjustments to the funds distributed from Ward
Services' Capital Account, as above provided, necessary to correct estimates
for the actual amounts resulting from completed transactions. Immediately
prior to consummation of the Merger, a cash distribution will be paid by Ward
Services to Ward equal to the sum of the following (without duplication): (i)
all retained earnings of Ward Services as of
-18-
<PAGE> 19
January 1, 1995, (ii) all capital of Ward Services, except for par value
capital in the amount of $15,000 and capital in excess of par value in the
amount $207,088.97, and (iii) all amounts distributed to Ward Services from the
Partnership which have not previously been distributed by Ward Services. Such
distribution is estimated to be in the aggregate amount of $6,300,000.
B. Closing Documents.
1. At the Closing, ONEOK shall deliver or cause to be delivered
to Ward and the Walters Trust:
a. A certified copy of resolutions of ONEOK's Board of
Directors authorizing the execution of this Agreement and the
consummation of the transactions contemplated hereby, including the
issuance of ONEOK's Common Stock pursuant to the Merger and the Shelf
Registration Agreement.
b. A certified copy of the resolutions of ONEOK
Marketing's Board of Directors and Stockholders, as required for valid
approval of the execution of this Agreement and the consummation of
the transactions contemplated hereby, including the Merger and the
Employment Agreements.
c. A certificate signed by an appropriate officer of
ONEOK stating that the warranties and representations of ONEOK under
this Agreement are true and correct as of the Closing Date and ONEOK
and ONEOK Marketing have complied in all material respects with all of
their obligations and agreements required to be performed prior to the
Closing.
d. An opinion of counsel for ONEOK and ONEOK Marketing,
dated the Closing Date, in form attached hereto as Exhibit D.
2. At the Closing, Ward shall deliver to ONEOK:
a. Certified copies of the Certificates of Incorporation
of Ward and Ward Services.
b. A certified copy of resolutions of Ward's Board of
Directors authorizing the execution of this Agreement and the
consummation of the transactions contemplated hereby.
c. A certified copy of the resolutions of Ward Services'
Board of Directors and Stockholders as required for valid approval of
the execution of this Agreement and the consummation of the
transactions contemplated hereby.
d. A certificate signed by an appropriate officer of
Ward stating that the warranties and representations of Ward under
this Agreement are true and correct as of the Closing
-19-
<PAGE> 20
Date and Ward and Ward Services have complied in all material respects
with all of their obligations and agreements required to be performed
prior to the Closing.
e. An opinion of counsel for Ward and Ward Services,
dated the Closing Date, in form attached hereto as Exhibit E.
3. At the Closing, the Walters Trust shall deliver to ONEOK:
a. A certified copy of the Certificate of Incorporation
of Comanche.
b. A certified copy of the resolutions of Comanche's
Board of Directors and Stockholder, as required for valid approval of
the execution of this Agreement and the consummation of the
transactions contemplated hereby.
c. A certificate signed by James C. Walters, Jr. stating
that the warranties and representations of the Walters Trust under
this Agreement are true and correct as of the Closing Date and
Comanche and the Walters Trust have complied in all material respects
with all of their obligations and agreements required to be performed
prior to the Closing under this Agreement.
d. An opinion of counsel for Comanche and the Walters
Trust, dated the Closing Date, in form attached hereto asExhibit F.
4. In addition, at the Closing:
a. The Employment Agreements and the Shelf Registration
Agreement shall be executed and delivered by the respective parties
thereto.
b. The documents terminating and releasing all further
rights under the 1992 Agreements shall be executed and delivered by
the respective parties thereto.
IX. Conduct of Business Pending Closing.
During the period from the date hereof to the Closing Date, Ward shall
cause Ward Services (for itself and on behalf of the Partnership) and the
Walters Trust shall cause Comanche to conduct their operations according to
their ordinary and usual course of business and to maintain their records and
books of accounts in a manner that fairly and correctly reflects their income,
expenses and liabilities. During such period, Ward agrees that Ward Services
(for itself and on behalf of the Partnership) and the Walters Trust agrees that
Comanche shall not do any of the following without the written consent of
ONEOK:
-20-
<PAGE> 21
A. Pay or incur any obligation or liability, absolute or
contingent, other than current liabilities incurred in the ordinary course of
business;
B. Except for short term, unsecured bank borrowing not to exceed
$10,000 in the aggregate and except for endorsement, for collection or for
deposit, of negotiable instruments received in the ordinary course of business,
incur any indebtedness for borrowed money, assume, guarantee, endorse or
otherwise as accommodation become responsible for obligations of other
individuals, firms or corporations, or make any loans or advances to any
individual, firm or corporation;
C. Except as contemplated under Section VIII.A. above, declare or
pay any dividends or make any payment or distribution to stockholders as such,
issue any capital stock or purchase or otherwise acquire for value any of its
outstanding capital stock or grant options, warrants or rights to purchase any
shares of its capital stock;
D. Mortgage, pledge or subject to lien or other encumbrance any
of its properties or assets;
E. Sell or transfer any of its properties or assets except in the
ordinary course of business or, without appropriate consideration, cancel,
release or assign any indebtedness owed to it or any claims held by it;
F. Make any investment of a capital nature either by the purchase
of stock or securities (other than United States Government securities),
contributions to capital, property transfers or otherwise, or by the purchase
of any property or assets of any other individual, firm or corporation;
G. Make any material change in its insurance, or other
commitments or arrangements, or enter into (1) any agreement not subject to
termination without liability on notice of 30 days or less; (2) any contract
for the purchase or sale of any materials, products or supplies other than such
contracts incurred in the ordinary course of business; (3) any contract for the
purchase or sale of any materials, products, or supplies, the total contract
price of which exceeds $25,000, or which contains an escalator, renegotiation
or redetermination clause or which commits it for a fixed term; (4) any
management or consultation agreement; (5) any lease, license, royalty or union
agreement; or (6) any other agreement not in the ordinary course of business;
H. Increase in any manner the compensation of any of its officers
or executive employees, or pay or agree to pay any pension or retirement
allowance not required by any existing plan to any of such officers or
employees, or commit itself to any additional
-21-
<PAGE> 22
pension, retirement or profit-sharing plan or agreement or employment agreement
with or for the benefit of any officer, employee or other person; or
I. Take any action which would interfere with or prevent
performance of this Agreement.
X. Payment of Expenses.
All costs and expenses, including, without limitation, legal fees and
taxes, incurred by each party hereto, in negotiating this Agreement or in
consummating the transactions contemplated hereby shall be paid by such party;
provided, however, that, in respect to Ward, Ward Service, Comanche and the
Ward Trust, none of such costs and expenses shall be paid by ONEOK, Ward
Services, or Comanche.
XI. Termination.
This Agreement may be terminated under any of the following
circumstances by notice given on or before the Closing Date:
A. Mutual Agreement. This Agreement may be terminated by the
mutual written agreement of ONEOK, Ward, and the Walters Trust, at any time
prior to the Closing, regardless of whether approval of this Agreement and the
Merger by the respective shareholders shall have previously been obtained.
B. By ONEOK. ONEOK shall have the right to terminate this
Agreement if during the period from the date hereof to the Closing Date any of
the following shall occur:
1. Ward Services or Comanche shall suffer any loss from
fire, flood, explosion or other casualty which substantially and
materially affects the conduct of its business or, irrespective of
insurance, the value of its assets.
2. The Closing shall not have taken place on or before
the end of February, 1995.
C. By Ward or Comanche. Either Ward or Comanche shall have the
right to terminate if during the period from the date hereof to the Closing
Date any of the following shall occur:
1. ONEOK shall suffer any loss from fire, flood,
explosion or other casualty which substantially and materially affects
the conduct of its business or, irrespective of insurance, the value
of its assets.
2. The Closing shall not have taken place on or before
the end of February, 1995.
-22-
<PAGE> 23
D. By Any Party. Any party hereto shall have the right to
terminate this Agreement in the event that there shall be any actual or
threatened litigation challenging the validity or legality of this Agreement or
the consummation thereof or seeking to restrain or invalidate any of the
transactions contemplated hereunder which would, in the judgment of such
parties acting reasonably based upon the advice of counsel, involve material
expense or lapse of time which would be materially adverse to the interests of
such party.
E. Waiver. Any party hereto may, at its election, waive any of
its rights to terminate this Agreement under the foregoing provisions, and
shall be deemed to have waived such rights upon completion of the Closing under
this Agreement. If the facts or conditions giving rise to any such right to
terminate shall have been disclosed in writing to the other party or parties
prior to the Closing, such waiver shall also constitute a waiver of any other
right or remedy (including any right or remedy for breach of representation or
warranty) arising by reason of such fact or condition.
XII. Miscellaneous.
A. Use of Name. Neither Ward nor any of its subsidiaries or
affiliates shall use the name "Ward Gas Services" for a period of five (5)
years from the date of this Agreement.
B. HSR Filings. Both Ward and ONEOK acknowledge that they have
made, or caused to be made, their respective filings as required under the HSR
Act in respect to the transactions under this Agreement and each agrees to use
its best efforts to secure termination of the applicable waiting period as soon
as possible under the circumstances.
C. Survival of Warranties and Representations and Indemnification.
1. Notwithstanding any investigation conducted before or after
the Closing, the parties shall, subject to any state of facts or limitations
set forth in the Disclosure Schedules attached hereto or otherwise disclosed in
writing prior to the Closing, be entitled to rely upon the warranties and
representations set forth herein, and the obligations of the parties with
respect thereto shall survive the closing and continue in full force and effect
until the third anniversary of the Closing Date, at which time all warranties
and representations set forth in this Agreement and all liability of the
parties with respect thereto shall terminate, except for warranties and
representations relating to taxes and except for claims relating to any other
warranties or representations which are asserted in writing on or before the
third anniversary of the Closing Date. Warranties and representations
-23-
<PAGE> 24
concerning taxes and all liability of the parties with respect thereto shall
continue in effect for a period of five years after the Closing Date. Subject
to any applicable statutes of limitation, the liability of the parties with
respect to all other warranties and representations as to which timely claims
have been asserted in writing shall continue until such claims have been
finally decided, settled or adjudicated. Each party will indemnify and hold
the other parties harmless from any and all loss, cost, and damage (including
reasonable attorneys' fees) resulting from such breach of its warranties,
representations, and obligations under this Agreement. Each party's liability
resulting from any breach of its warranties, representations, or other
obligations set forth herein to another party shall be limited, in the
aggregate, to the excess of any loss resulting therefrom over $50,000.
Notwithstanding the foregoing provisions of this Section XII.C. and any other
provision of this Agreement, in no event shall either Ward or the Walters Trust
be liable to ONEOK or ONEOK Marketing or any of their affiliates, for breach of
representation, warranty or otherwise in connection with this Agreement or the
transactions contemplated herein (including without limitation any indemnity
obligation under this Section XII.C), for an aggregate amount in excess of
$3,580,500, as to Ward, or $2,194,500, as to the Walters Trust.
2. ONEOK shall indemnify and hold Ward and its affiliates
harmless from any and all loss, cost, and damage (including reasonable attorney
fees) resulting from the following:
a. Any and all guarantees made by Ward to gas suppliers
on behalf of the Partnership or Ward Services;
b. Any federal or state income tax liability incurred by
Ward as a result of the operations of the Partnership after January 1,
1995; and
c. Any and all guarantees of Ward or Mr. L. O. Ward to
Bank of Oklahoma, N.A. (the "Bank") with respect to obligations of
Ward Services under that certain Credit Agreement dated May 13, 1991,
between Ward Services and the Bank.
3. Ward shall indemnify and hold ONEOK and ONEOK Marketing
harmless from fifty percent (50%) of any and all loss, cost, and damage
(including reasonable attorney fees) in excess of any amounts reserved on the
books of Ward Services with respect thereto, resulting from the sexual
harassment claim of Susan R. Taylor, former employee of Ward Services.
D. Full Access. Ward Services and Comanche shall, during normal
business hours, afford to the officers and authorized representatives of ONEOK
reasonable access to its properties, books and records, including the list of
the companies' shareholders, in
-24-
<PAGE> 25
order that they may have full opportunity to make such investigations as they
shall desire of the affairs of such companies; and such companies will furnish
ONEOK with such additional financial and operating data and other information
as to its business and properties as ONEOK shall from time to time reasonably
request. In the event of the termination and abandonment of the exchange of
the securities, all such non-public information shall be held in strict
confidence by ONEOK and its officers, employees and legal representatives,
except as may be required in any legal proceeding.
E. Waivers and Amendments. With the written consent of ONEOK,
the obligations of Ward, the Walters Trust, Ward Services and Comanche under
this Agreement may be waived (either generally or in particular instance,
either retroactively or prospectively and either for a specified period of time
or indefinitely), and with the same consent Ward, the Walters Trust, Ward
Services or Comanche may enter into a supplementary agreement with ONEOK for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement and the other agreements
contemplated herein.
F. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Oklahoma as such laws are applied to
agreements between Oklahoma residents entered into and to be performed entirely
within Oklahoma.
G. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, heirs, executors, and administrators of the
parties hereto. No party hereto shall assign this Agreement, or any rights
thereto, without the prior written consent of the other parties hereto.
H. Entire Agreement. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties hereto with regard to the subjects hereof and
thereof.
I. Notices, etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be effective when mailed
by first class mail, postage prepaid, addressed (1) if to ONEOK or ONEOK
Marketing, at its address set forth below, or at such other address as ONEOK or
ONEOK Marketing shall have furnished to Ward and the Walters Trust in writing,
(2) if to Ward or Ward Services at its address set forth below or at such other
address as Ward or Ward Services shall have furnished to ONEOK in writing, and
(3) if to Comanche or the Walters Trust, at its address set forth below or at
such other address as Comanche or the Walters Trust shall have furnished to
ONEOK in writing:
-25-
<PAGE> 26
(a) Ward or Ward Services:
P.O. Box 1187
502 S. Fillmore
Enid, OK 73702
ATTN: Richard R. Tozzi
(b) Comanche or the Walters Trust:
c/o James C. Walters
4214 E. 97th St.
Tulsa, OK 74137
(c) ONEOK or ONEOK Marketing:
P.O. Box 871
Tulsa, OK 74102-0871
ATTN: President
J. Separability. In case any provision of this Agreement not
material to the benefits intended to be conferred hereby shall be determined to
be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
K. Finders' Fees.
1. Ward Services (i) represents and warrants that it has retained
no finder or broker in connection with the transactions contemplated by this
Agreement, and (ii) agrees to indemnify and to hold ONEOK and ONEOK Marketing
and their respective officers, directors, and controlling persons, harmless of
and from any liability for any commission or compensation in the nature of a
finder's fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which Ward
Services, or any of its employees or representatives, are responsible.
2. Comanche (i) represents and warrants that it has retained no
finder or broker in connection with the transactions contemplated by this
Agreement, and (ii) agrees to indemnify and to hold ONEOK and ONEOK Marketing
and their respective officers, directors, and controlling persons, harmless of
and from any liability for any commission or compensation in the nature of a
finder's fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which Comanche,
or any of its employees or representatives, are responsible.
3. ONEOK and ONEOK Marketing (i) represent and warrant that they
have retained no finder or broker in connection with the
-26-
<PAGE> 27
transactions contemplated by this Agreement, and (ii) agree to indemnify and to
hold Ward, Ward Services, Comanche, and the Walters Trust and their respective
officers, directors, and controlling persons, harmless of and from any
liability for any commission or compensation in the nature of a finder's fee to
any broker or other person or firm (and the costs and expenses of defending
against such liability or asserted liability) for which Ward, Ward Services,
Comanche or the Walters Trust, or any of their employees or representatives,
are responsible.
L. Other Documents. The parties to this Agreement shall in good
faith execute such other and further instruments, assignments or documents as
may be necessary or advisable to carry out the transactions contemplated by
this Agreement.
M. Public Disclosure. Before the Closing, none of the parties
hereto shall make any public release of information regarding the matters
contemplated herein, except (i) a joint press release in agreed form shall be
issued by ONEOK and Ward as promptly as is practicable after execution of this
Agreement, (ii) the parties hereto may each continue such communications with
employees, customers, suppliers, franchisees, lenders, lessors, shareholders,
and other particular groups as may be legally required or necessary or
appropriate and not inconsistent with the best interests of the other party or
the prompt consummation of the transactions contemplated by this Agreement, and
(iii) as required by law.
N. Titles and Subtitles. The titles of the Articles, Sections
and subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement. References herein to
exhibits and schedules to this Agreement shall be deemed to incorporate such
exhibits by reference.
O. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together
shall constitute one instrument, and which shall become effective when there
exist copies signed by all of the parties hereto.
P. Acknowledgment and Covenant. ONEOK and ONEOK Marketing
acknowledge and agree that, at the date hereof, Ward Services is indebted to
Ward (i) in the approximate amount of $1,250,000 for Ward Services' income
taxes as a part of the consolidated group with Ward, which amount is reflected
on the consolidated balance sheet of Ward Services as "Income taxes payable"
(the "Tax Liability"); and (ii) for various amounts which cannot be determined
on the date hereof with respect to gas purchases by Ward Services from Ward
during January, 1995 (the "Gas Liabilities"). ONEOK agrees that it will pay,
or cause to be paid, the Tax
-27-
<PAGE> 28
Liability at or within 60 days after the Closing. ONEOK agrees that it will
pay, or cause to be paid, the Gas Liabilities as and when the same become due
in the ordinary course.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized representatives, effective as of the date set
forth on the first page hereof.
Ward Petroleum Corporation, an Oklahoma
corporation
By/s/ L.O. Ward
----------------------------------------------
President
"Ward"
Ward Gas Services, Inc., an Oklahoma corporation
By/s/ James C. Walters
----------------------------------------------
President
"Ward Services"
ONEOK Inc., a Delaware corporation
By/s/ Larry W. Brummett
----------------------------------------------
Chairman of the Board
"ONEOK"
ONEOK Gas Marketing Company, a Delaware
corporation
By/s/ B. M. VanMeter
----------------------------------------------
President
"ONEOK Marketing"
-28-
<PAGE> 29
Comanche Gas Marketing Company, an Oklahoma
corporation
By/s/ James C. Walters
----------------------------------------------
President
"Comanche"
/s/ James Christopher Walters, Jr.
------------------------------------------------
James Christopher Walters, Jr., Trustee of the
James Christopher Walters, Jr. Trust dated
August 3, 1983
/s/ LaVonne Diane Walters
------------------------------------------------
LaVonne Diane Walters, Trustee of the James
Christopher Walters, Jr. Trust dated
August 3, 1983
"The Walters Trust"
-29-
<PAGE> 30
Exhibits List
<TABLE>
<S> <C>
Exhibit A Shelf Registration Agreement
Exhibit B Walters Employment Agreement
Exhibit C Jacobsen Employment Agreement
Exhibit D Opinion of Counsel for ONEOK and ONEOK Marketing
Exhibit E Opinion of Counsel for Ward and Ward Services
Exhibit F Opinion of Counsel for Comanche and the Walters Trust
</TABLE>
-30-
<PAGE> 31
Disclosure Schedules
<TABLE>
<S> <C>
Disclosure Schedule II, Item G Changes in Financial Condition - Ward Services
Disclosure Schedule II, Item H Material Contracts and Commitments - Ward Services
Disclosure Schedule II, Item J Litigation, etc. - Ward Services
Disclosure Schedule II, Item L Insurance - Ward Services
Disclosure Schedule II, Item P Violations of Environmental Laws - Ward Services
Disclosure Schedule III, Item F Material Liabiities of Comanche
Disclosure Schedule III, Item G Changes in Financial Condition - Comanche
Disclosure Schedule III, Item H Material Contracts and Commitments - Comanche
Disclosure Schedule III, Item N Title to and Condition of Properties - Comanche
</TABLE>
-31-
<PAGE> 32
DISCLOSURE SCHEDULE II
Item G. Changes in Financial Condition
I. Natural prices have declined, such decline having had
an adverse effect of the revenues of Ward Services.
II. Ward Services has paid, or prior to the Merger will
have paid, the following dividends:
a. As of March 9, 1994, a cash dividend of
$24.00 per share of common stock for a total
amount of $360,000 paid to Ward.
b. As of December 31, 1994, an in-kind dividend
of the following described properties was
distributed to Ward:
<TABLE>
<CAPTION>
Property Description Value
-------------------- -----
<S> <C>
Groendyke Gas Gathering System Joint Venture $ 54,411.29
dated 7/15/88 (40% ownership interest)
Gaines Creek Pipeline Joint Venture dated 1/1/91 30,108.41
(10% ownership interest)
Jantz Gas System (100% ownership interest) 8,828.18
Kincaid Gas Gathering (100% ownership interest) 4,880.09
Kephart Gas System 2,326.41
-----------
$101,554.38
</TABLE>
c. Immediately prior to consummation of the
Merger, a cash distribution will be paid by
Ward Services to Ward equal to the sum of the
following (without duplication:): (i) all
retained earnings of Ward Services as of
January 1, 1995, (ii) all capital of Ward
Services, except for par value capital in the
amount of $15,000 and capital in excess of
par value in the amount of $207,088.97, and
(iii) all amounts distributed to Ward
Services from the Partnership which have not
previously been distributed by Ward Services.
Such distribution is estimated to be in the
aggregate amount of $6,300,000.
III. See the matters listed under Item J below.
Item H. Material Contracts and Commitments
I. General Partnership Agreement between Ward Services
(then Ward Gas Marketing, Inc.) and ONEOK Marketing
Company dated as of October 1,1992.
II. Lease Agreement dated November 19, 1994, between Ward
Services (lessee) and Alco Capital Resource, Inc.
(lessor) relating to lease of Canon copier. (Copier
also covered by one-year pre-paid maintenance
agreement dated November 29, 1994, with Mirex
Corporation.)
<PAGE> 33
III. Lease Agreement dated March 24, 1994, between Ward
Services (lessee) and Alco Capital Resource, Inc.
(lessor) relating to lease of Canon fax machine.
(Fax machine also covered by three-year pre-paid
maintenance agreement dated March 24, 1994, with
Mirex Corporation.)
IV. Mid-Continent Tower Lease Agreement commencing
October 1, 1992, between Ward Services (then Ward Gas
Marketing, Inc.) (tenant) and RMM Corporation
(landlord), as amended by Amendment to Lease
Agreement effective April 1, 1994.
V. Employment Agreement dated November 17, 1992,
effective February 1, 1992, between Ward Services and
James C. Walters.
VI. Agreement dated as of November 17, 1992, between Ward
Services and Comanche relating to gas marketing
consulting services and project participation rights.
VII. Credit Agreement dated as of May 13, 1991, between
Ward Services (borrower) and Bank of Oklahoma, N.A.,
as amended by that First Amendment to Credit
Agreement dated as of January 31, 1992, that Second
Amendment dated as June 30, 1992, that Third
Amendment dated as of October 31, 1992, that Fourth
Amendment dated as of February 1, 1993, that Fifth
Amendment dated as of June 30, 1993, that Sixth
Amendment dated as of December 1, 1993, that Seventh
Amendment dated as of June 30, 1994, and that Eight
Amendment dated as of October 31, 1994; related
Promissory Note in the principal amount of $5,000,000
dated October 31, 1994. See Attachment A to this
Disclosure Schedule II for a list of security
agreements entered into and letters of credit issued
under the above-described Credit Agreement.
VIII. Letter Agreement dated October 14, 1992, among Ward
Services (then Ward Gas Marketing, Inc.), ONEOK
Marketing, James C. Walters, Comanche and Comanche
Gas Gathering, Inc.
Item J. .Litigation, etc
I. Susan R. Taylor v. Ward Gas Marketing, Inc., U.S. Equal
Employment Opportunity Commission, Charge No.: ###-##-####.
Ms. Taylor, after being terminated by Ward Services, filed
this EEOC Complaint alleging she was discriminated against
because of sex and that she was subjected to a "sexually
hostile work environment." On November 8, 1994, Ms. Taylor
filed an action styled Susan R. Taylor v. Ward Petroleum
Company and Ward Gas Services,Inc., in the U.S. District Court
for the Northern District of Oklahoma, Case No. 94-C-1040-K.
An Amended Complaint was filed November 16, 1994. In this
action Ms Taylor alleges violation of Title VII of the Civil
Rights Act of 1964, as amended (hostile work environment
sexual harassment), wrongful discharge in violation of
Oklahoma public policy, intentional or negligent infliction of
emotional distress and breach of contract.
II. Ward Gas Services, Inc. v. William R. Thomas, d/b/a Sinclair
Oil & Gas Co., No. CJ-93-4740 (District Court of Tulsa County,
Oklahoma). In January 1993, Ward Services delivered 124,000
MMBtu of natural Gas to William R. Thomas, d/b/a Sinclair Oil
& Gas. Co. Thomas claims that he received only 89,826 MMBtu.
As a result, Thomas' payments were deficient in the amount of
$66,297.56. Ward Services sued Thomas for this amount in
Tulsa County District Court.
III. Ward Gas Services, Inc. v. Daniel C. Nix, Carol A. Nix, Phil
Kerns, Robert Walls, Pat Vercillini, Ralph Caldwell, and Jane
Doe, No. CJ-94-5037 (District Court of Tulsa County,
Oklahoma). In December 1994, Ward Services became aware that
Daniel C. Nix, an employee,
-2-
<PAGE> 34
had embezzled $96,350.68 during the Period from October 1994
through November 1994. Nix resigned in December 1994 and Ward
Services sued him for this amount and for other relief. In
December 1994, Ward Services amended its petition to assert
claims for breach of contract, conversion, conspiracy, breach
of fiduciary duty and unjust enrichment against Nix and to
assert claims for conspiracy and unjust enrichment against
Carol A. Nix, Phil Kerns, Robert Walls, Pat Vercillini, Ralph
Caldwell and Jane Doe. Since the filing of this lawsuit, Nix
has voluntarily returned $19,340.57 to Ward Services.
IV. In re: Consolidated Fuel Corporation; Case No.
394-36782-RCM-11, United States Bankruptcy Court for the
Northern District of Texas, Dallas Division. Ward Services
sold natural gas to Consolidated Fuel Corporation ("CFC") for
resale to the city of Springfield, Missouri (the "City).
These sales were made under an escrow arrangement which
required the City to pay CFC's invoice into an escrow account
at Gateway National Bank in Dallas, Texas. Gateway National
Bank is authorized to disburse funds from the escrow account
only upon the signatures of both a Ward Services
representative and a CFC representative. On November 15,
1994, CFC filed the bankruptcy action referenced above. At
that time, CFC owed Ward Services approximately $400,000.00,
invoices were outstanding from CFC to the City and there were
no funds in the escrow account. CFC listed Ward as an
unsecured creditor in its bankruptcy schedules. Ward claims
ownership of all funds in the escrow account subject to
disbursement pursuant to the terms of the escrow agreement.
Subsequent to CFC's bankruptcy filing, the City has paid,
through January 11, 1995, $976,716.00 into the escrow account.
CFC has treated the Ward/CFC escrow account at Gateway
National Bank as a restricted cash collateral account.
Item L. Insurance
See Attachment B for a summary description of Ward Services'
liability insurance coverage.
Item P. Environmental Matters
None.
-3-
<PAGE> 35
ATTACHMENT A
WARD GAS SERVICES, INC.
BANK OF OKLAHOMA REVOLVING LINE OF CREDIT, NOTES PAYABLE
AND SECURITY AGREEMENTS FOR LETTERS OF CREDIT
December 31, 1994
Ward Gas Services, Inc. was required to enter into a revolving credit agreement
and associated $5,000,000 note with the Bank of Oklahoma for the letters of
credit to be issued by the bank. The letters of credit are secured as per the
schedule below. No amounts were advanced on the indebtedness itself.
<TABLE>
<CAPTION>
Cash Backed
Security
L.C.'s Number Executed Expires Agreement
------ ------ -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Enron *9406* 11/15/94 $ 250,000 01/15/95 1/2 $ 125,000
Cash
Enron *9376* 10/28/94 138,000 01/15/95 1/2 69,000
Cash
Midcon *9429* 11/30/94 350,000 02/15/95 1/2 175,000
Cash
Railroad Comm (Tex) *8552* 07/26/93 25,000 09/30/95 100% 25,000
State of Okla (BOK) *7560* 02/03/95 1,046,000 06/30/95 1/2 523,000
Cash ---------
$1,809,000 $ 917,000
========== =========
Ward Gas Services, Inc.
Cash Account #70090092 - Balance at 12/31/94 $ 923,123
=========
</TABLE>
January Additions as of 1/25/95
<TABLE>
<CAPTION>
Cash Backed
Security
L.C.'s Number Executed Expires Agreement
------ ------ -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Enron *9548* 01/25/95 $ 125,000 02/15/95 1/2 $ 62,500
Cash
Aurora *9553* 01/27/95 344,000 04/15/95 1/2 172,000
--------- Cash ----------
$ 469,000 $ 234,500
========= ==========
</TABLE>
<PAGE> 36
ATTACHMENT B
WARD GAS SERVICES
SUMMARY OF INSURANCE COVERAGE
12/31/94
First named insured is Ward Petroleum Corporation.
Ward Gas Services is also a named insured under these policies:
<TABLE>
<CAPTION>
Type of Policy: Policy Number: Insurance Company: Effective Dates:
-------------- ------------- ----------------- ---------------
<S> <C> <C> <C>
General Liability CGL5609024 Gulf Insurance 4/01/94-4/01/95
Workers' Compensation WC5567943 Gulf Insurance 4/01/94-4/01/95
Monthly reporting
Commercial Auto - BA5583540 Gulf Insurance 4/01/94-4/01/95
No scheduled
vehicles $1M
liability -
hired and
non-owned
only
Umbrella OUL017919 RLI 4/01/94-4/01/95
Package - Crime CLP7657112 Select 4/01/94-4/01/95
coverage only
Property - contents CLP7661365 Gulf Insurance 5/30/94-5/30/95
only - $75,000
(Tulsa
office)
</TABLE>
<PAGE> 37
CERTIFICATE OF INSURANCE
Ward Gas Services, a Partnership
COVERAGE:
<TABLE>
<S> <C>
General Liability General Aggregate $4,000,000
Commercial General Liability Products-Comp/Op Agg. $4,000,000
Personal and Adv. Injury $1,000,000
Each Occurrence $1,000,000
Fire Damage (any one fire) $50,000
Med. Expense (Any one person) $5,000
Automobile Liability
Non-Owned Autos Combined Single Limit $1,000,000
Workers Compensation Each Accident $500,000
and Disease - Policy Limit $500,000
Employer's Liability Disease - Each Employee $500,000
</TABLE>
(Copy of Certificate on file with ONEOK Gas Marketing Company)
<PAGE> 38
DISCLOSURE SCHEDULE III
Item F. Liabilities
None
Item G. Changes in Financial Condition
From time to time, the price of natural gas has substantially
decreased, the effect of which may be a material or adverse change
in the business of Comanche and the value of its assets. Comanche
is a corporation governed by Subchapter S of the Internal Revenue
Code, and as such, Comanche has distributed to its shareholder on
a regular basis amounts as reflected in Comanche's tax returns
previously provided to ONEOK for years prior to 1994 and has
distributed or will distribute approximately $1,150,000 for 1994
and 1995.
Item H. Material Contracts and Commitments
I. Agreement dated November 17, 1992, but effective February 1,
1992, by and between Ward Services (then Ward Gas Marketing,
Inc.) and Comanche (the "Ward-Comanche Agreement").
II. Letter Agreement dated October 14, 1992, among Ward Services
(then Ward Gas Marketing, Inc.), ONEOK Marketing, James C.
Walters, Comanche and Comanche Gas Gathering, Inc.
Item N. Title to and Condition of Properties
None
<PAGE> 39
SHELF REGISTRATION AGREEMENT
by and among
ONEOK INC.
WARD PETROLEUM CORPORATION
and
JAMES CHRISTOPHER WALTERS, JR. AND LAVONNE DIANE WALTERS,
TRUSTEES OF THE JAMES CHRISTOPHER WALTERS, JR.
TRUST DATED AUGUST 3, 1983
_______________________________________________________________
Dated as of February , 1995
_______________________________________________________________
<PAGE> 40
SHELF REGISTRATION AGREEMENT
This Shelf Registration Agreement (this "Agreement") is made and
entered into this ___ day of February, 1995, by and among ONEOK INC., a
Delaware corporation (the "Company"), WARD PETROLEUM CORPORATION, an Oklahoma
corporation ("Ward"), and JAMES CHRISTOPHER WALTERS, JR. AND LaVONNE DIANE
WALTERS, TRUSTEES OF THE JAMES CHRISTOPHER WALTERS, JR. TRUST DATED AUGUST 3,
1983 (the "Walters Trust"). Ward and the Walters Trust are sometimes referred
to herein individually as a "holder" and collectively as the "holders."
RECITALS
This Agreement is being entered pursuant to the provisions of Section
VII.B.4 of that certain Agreement and Plan of Merger (the "Merger Agreement"),
dated as of February __, 1995, by and among the Company, Ward, ONEOK Gas
Marketing Company, a Delaware corporation, Ward Gas Services, Inc., an Oklahoma
corporation, Comanche Gas Marketing Company an Oklahoma corporation, and the
Walters Trust.
NOW, THEREFORE, in consideration of the representations, warranties
and agreements set forth in the Merger Agreement and herein, and intending to
be legally bound, the parties hereto do hereby agree as follows:
Section 1. Definitions.
Except as otherwise defined herein, capitalized terms used herein
shall have their respective meanings set forth in the Merger Agreement. As
used in this Agreement, the following terms shall have the following meanings:
Company: See the introductory paragraph to this Agreement.
Effectiveness Period: See Section 3(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
holder or holders: See the introductory paragraph to this Agreement.
Losses: See Section 6 hereof.
Other Securities: See the definition of "Registrable Securities"
below.
Person: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other entity.
<PAGE> 41
Preliminary Prospectus: Any preliminary prospectus that may be
included in any Registration Statement.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Registrable Securities: All Shares issued to Ward and the Walters
Trust pursuant to the Merger Agreement, until (i) a Registration Statement
covering the Shares has been declared effective by the SEC and such Shares have
been disposed of by the holders thereof in accordance with such effective
Registration Statement, (ii) such Shares are sold in compliance with Rule 144,
or (iii) such Shares cease to be outstanding. If, as a result of any
reclassification, stock split, stock dividend, business combination, exchange
offer or other transaction or event, any capital stock, evidences of
indebtedness, warrants, options, rights or other securities (collectively
"Other Securities") are issued or transferred to a holder in respect of
Registrable Securities held by such holder, references in the preceding
sentence to Shares shall be deemed to include appropriate references to such
Other Securities.
Registration Statement: Any registration statement of the Company
that covers any of the Registrable Securities, including the Prospectus,
amendments and supplements to such registration statement (including post-
effective amendments), all exhibits, and all material incorporated by reference
or deemed to be incorporated by reference in such registration statement.
Regulations: The General Rules and Regulations of the SEC under the
Securities Act.
Rule 144: Rule 144 of the Regulations, as such Rule may be amended
from time to time, or any similar rule (other than Rule 144A) or regulation
hereafter adopted by the SEC providing for offers and sales of securities made
in compliance therewith resulting in offers and sales by subsequent holders of
such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended.
Shares: Shares of the Common Stock of the Company issued to Ward and
the Walters Trust pursuant to the Merger Agreement
<PAGE> 42
Shelf Registration: See Section 3(a) hereof.
Section 2. Required Registration Under Merger Agreement.
The Company will register the Registrable Securities upon the terms,
and subject to the limitations and conditions, hereinafter set forth.
Section 3. Shelf Registration.
(a) Shelf Registration. The Company shall prepare and file with
the SEC a Registration Statement for an offering to be made by the holders on a
continuous basis under the Regulations covering all of the Registrable
Securities (the "Shelf Registration"). The Shelf Registration shall be on Form
S-3 or another appropriate form permitting registration of such Registrable
Securities for resale by such holders in the manner or manners designated by
them. The Company shall use its reasonable best efforts to cause the Shelf
Registration to be declared effective under the Securities Act within 60 days
after the date hereof and to keep the Shelf Registration continuously effective
under the Securities Act until the date which is 24 months from the date the
Shelf Registration is declared effective (subject to extension pursuant to
clause (iii) of Section 7(b) hereof) (the "Effectiveness Period"), or such
shorter period ending when (i) all Registrable Securities covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in the
Shelf Registration, or (ii) in the opinion of counsel to the Company, which
opinion shall be satisfactory in form, scope and substance to each holder
affected thereby, registration of the Registrable Securities is (A) no longer
required under the Securities Act and (B) the holder may sell all remaining
Registrable Securities in the open market without limitations as to volume and
without being required to file any forms or reports with the SEC under the
Securities Act or the Regulations.
(b) Suspension of Effectiveness. If the Shelf Registration ceases
to be effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the Shares registered thereunder),
the Company shall use every reasonable effort to obtain the prompt withdrawal
of any order suspending the effectiveness thereof, and in any event shall,
within 45 days after such cessation of effectiveness, amend the Shelf
Registration in a manner reasonably expected to obtain the withdrawal of the
order suspending the effectiveness thereof.
(c) Supplements and Amendments. The Company shall supplement and
amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act or the Regulations, or if
reasonably requested by the holders of a majority of the Registrable Securities
covered by such Registration Statement.
<PAGE> 43
Section 4. Registration Procedures.
In connection with the registration of any Registrable Securities, the
Company shall effect such registrations to permit the sale of such Registrable
Securities in accordance with the intended method or methods of disposition by
the holders thereof, and pursuant thereto the Company shall:
(a) Prepare and file with the SEC, as soon as practicable after
the date hereof, a Registration Statement and use its best efforts to cause
such Registration Statement to become effective and remain effective as
provided herein; provided, however, that, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the Company
shall furnish to and afford the holders of the Registrable Securities covered
by such Registration Statement a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed.
(b) Subject to Section 4(a) hereof, (i) prepare and file with the
SEC such amendments and post-effective amendments to the Registration Statement
as may be necessary to keep such Registration Statement continuously effective
for the Effectiveness Period; (ii) cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force) of the
Regulations; and (iii) comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to it with respect to the disposition of all securities covered by
such Registration Statement as so amended or by such Prospectus as so
supplemented.
(c) Notify the selling holders of Registrable Securities promptly,
and confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective; (ii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the initiation of any
proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the Registrable
Securities for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose; (iv) of the happening of any
event or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration Statement,
Prospectus or documents; and (v) of the Company's reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate.
(d) Use its reasonable best efforts to prevent the issuance of any
order suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a
<PAGE> 44
Prospectus or suspending the qualification (or exemption from qualification) of
any of the Registrable Securities for sales in any jurisdiction, and, if any
such order is issued, to use its reasonable best efforts to obtain the
withdrawal of any such order at the earliest possible moment.
(e) Furnish to each selling holder of Registrable Securities who
so requests, without charge, one conformed copy of the Registration Statement
and each post-effective amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(f) Deliver to each selling holder of Registrable Securities,
without charge, as many copies of the Prospectus or Prospectuses (including
each form of Preliminary Prospectus) and each amendment or supplement thereto
and any documents incorporated or deemed to be incorporated by reference
therein as such Persons may reasonably request; and, subject to clauses (iii)
and (iv) of Section 7(b) hereof, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
holders of Registrable Securities and the agents, if any, and dealers, if any,
in connection with the offering and sale of the Registrable Securities covered
by the Prospectus and any amendment or supplement thereto.
(g) Use its reasonable best efforts to (i) register or qualify,
and to cooperate with the selling holders of Registrable Securities and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling holder reasonably
requests in writing; (ii) keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective; and (iii) do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided, however, that the Company shall not be
required to (A) qualify generally to do business in any jurisdiction where it
is not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject, or
(C) subject itself to taxation in any such jurisdiction.
(h) Cooperate with the selling holders of Registrable Securities
to (i) facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates shall not
bear any restrictive legends and shall be in a form eligible for deposit with
Depository Trust Corporation; and (ii) enable such Registrable Securities to be
in such denominations and registered in such names as the holders may
reasonably request.
(i) Use its reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities.
<PAGE> 45
(j) Upon the occurrence of any event contemplated by clause (iv)
or (v) of Section 4(c) above, as promptly as practicable prepare and (subject
to Section 4(a) above) file with the SEC a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(k) Use its reasonable best efforts to cause all Registrable
Securities covered by such Registration Statement to be listed on the New York
Stock Exchange and each other securities exchange, if any, on which similar
securities issued by the Company are then listed.
(l) Make available for inspection by any selling holder of such
Registrable Securities being sold and any attorney, accountant or other agent
retained by any such selling holder (collectively, the "Inspectors"), at the
offices where normally kept, during reasonable business hours, all financial
and other records, pertinent corporate documents and properties of the Company
and its subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and
cause the officers, directors and employees of the Company and its subsidiaries
to supply all information in each case reasonably requested by any such
Inspector in connection with such Registration Statement. Records which the
Company determines, in good faith, to be confidential and any Records which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Registration Statement; (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction; or (iii) the information in such Records has
been made generally available to the public. Each selling holder of such
Registrable Securities agrees that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it as
the basis for any market transactions in the securities of the Company or its
affiliates unless and until such information is made generally available to the
public. Each selling holder of such Registrable Securities further agrees that
it will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company at its
expense to undertake appropriate action to prevent disclosure of the Records
deemed confidential.
(m) Comply with all applicable rules and regulations of the SEC
and make generally available to security holders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
days after the end of any 12-month period (or 90 days after the end of any
12-month period if such period is a fiscal year) commencing on the first day of
the first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
<PAGE> 46
(n) Cooperate with each holder selling Registrable Securities
covered by any Registration Statement and their respective counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc. (the "NASD").
(o) As soon as reasonably possible following receipt of a notice
from a holder of Registrable Securities pursuant to clause (iv) of Section 7(b)
below, either (i) confirm in writing or orally followed by written confirmation
that the proposed disposition by such holder may be made pursuant to the then
applicable Prospectus together with such amendments or supplements thereto as
have been previously delivered to such holder, or (ii) give such holder the
notice required pursuant to Section 4(c) above and proceed otherwise to take
such actions as required under this Section 4 so that the respective holder's
proposed disposition of Registrable Securities may be effected as promptly as
practicable.
(p) Use its reasonable best efforts to take all other steps
reasonably necessary to effect the registration of the Registrable Securities
covered by a Registration Statement contemplated hereby.
Section 5. Registration Expenses.
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
a Shelf Registration is filed or becomes effective, including, without
limitation, any registration, filing and qualification fees, printing expenses,
fees and disbursements of counsel for the Company and the selling holders, and
expenses of any special audits incidental to or required by such registration,
except that each selling holder shall pay all broker's commissions incurred in
connection with the sale or other disposition of Registrable Securities for or
on behalf of such selling holder's account.
Section 6. Indemnification.
(a) Indemnification by the Company. The Company shall, without
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each holder of Registrable Securities, the respective
officers, directors and agents and employees of each of them, each Person who
controls each such holder and the officers, directors, agents and employees of
each such controlling person from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of
investigating, preparing to defend, defending and appearing as a third-party
witness and attorneys' fees and disbursements) and expenses, including, without
limitation, any amounts paid in respect of any settlements, subject to written
consent as provided in Section 6(c) below (collectively, "Losses"), joint or
several, without duplication, as incurred, arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplements thereto
or in any Preliminary Prospectus, or arising out of or based upon, in the case
of the Registration Statement or any amendments thereto, any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, and, in the case of the
Prospectus or in any amendments or
<PAGE> 47
supplements thereto or in any Preliminary Prospectus, any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except, in either case, to the extent, but only to the
extent, that such untrue or alleged untrue statement or omission or alleged
omission has been made therein in reliance upon and in conformity with
information furnished in writing to the Company by such indemnified Person
expressly for use therein.
(b) Indemnification by Holder of Registrable Securities. In
connection with any Registration Statement in which a holder of Registrable
Securities is participating, such holder of Registrable Securities shall
furnish to the Company in writing such information as the Company reasonably
requests for use in connection with any Registration Statement or Prospectus,
and shall, without limitation as to time, indemnify and hold harmless, to the
fullest extent permitted by law, the Company, each Person who controls the
Company and the directors, officers, agents or employees of each, from and
against any and all Losses, as incurred, arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus, or arising out of or based upon, in the
case of the Registration Statement or any amendments thereto, any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, and, in the case of the
Prospectus or in any amendments or supplements thereto, or in any Preliminary
Prospectus, any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, in either case, to
the extent, but only to the extent, that such untrue or alleged untrue
statement or omission or alleged omission has been made therein in reliance
upon and in conformity with information furnished in writing to the Company by
such holder expressly for use therein. In no event shall the liability of any
selling holder of Registrable Securities hereunder be, or be claimed by the
Company to be, greater in amount than the dollar amount of the proceeds
actually received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Person shall
be entitled to indemnity hereunder (an "indemnified Person"), such indemnified
Person shall give prompt notice to the party or parties from which such
indemnity is sought (the "indemnifying parties") of the commencement of any
action or proceeding, including, without limitation, any governmental
investigation (collectively "Proceedings" and individually a "Proceeding") with
respect to which such indemnified Person seeks indemnification or contribution
pursuant hereto; provided, however, that the failure so to notify the
indemnifying parties shall not relieve the indemnifying parties from any
obligation or liability unless the indemnifying party was not otherwise aware
of such Proceeding and was materially prejudiced by such failure. The
indemnifying parties shall have the right, exercisable by giving written notice
to any indemnified Person promptly after the receipt of written notice from
such indemnified Person of such Proceeding, to assume, at the indemnifying
parties' expense, the defense of any such Proceeding, with counsel reasonably
satisfactory to such indemnified Person and shall pay as incurred the fees and
disbursements of such counsel related to such Proceeding; provided, however,
that an indemnified Person or Persons (if more than one such indemnified Person
is
<PAGE> 48
named in any Proceeding) shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified Person or
Persons unless: (i) the indemnifying parties agree to pay such fees and
expenses; or (ii) the indemnifying parties fail promptly to assume the defense
of such Proceeding or fail to employ counsel reasonably satisfactory to such
indemnified Person or Persons; or (iii) the indemnified Person or Persons shall
have been advised by counsel that there may be a conflict between the positions
of the indemnifying party or an affiliate of the indemnifying party and such
indemnified Person or Persons in conducting the defense of such action or
proceeding or that there may be legal defenses available to such indemnified
Person or Persons different from or in addition to those available to the
indemnifying party or such affiliate, in which case, if such indemnified Person
or Persons notifies the indemnifying parties in writing that it elects to
employ separate counsel at the expense of the indemnifying parties, the
indemnifying parties shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying parties. No
indemnifying party shall be liable for any settlement of any such action or
proceeding effected without its written consent (which shall not be
unreasonably withheld), but if settled with its written consent each
indemnifying party jointly and severally agrees, subject to the exceptions and
limitations set forth above, to indemnify and hold harmless each indemnified
Person from and against any loss or liability by reason of such settlement.
(d) Contribution. If the indemnification provided for in this
Section 6 is unavailable to an indemnified Person or is sufficient to hold such
indemnified Person harmless from any Losses in respect to which this Section 6
would otherwise apply by its terms, then each applicable indemnifying party, in
lieu of indemnifying such indemnified Person, shall have an obligation to
contribute to the amount paid or payable by such indemnified Person as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and such indemnified Person,
on the other hand, in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party, on the one hand, and indemnified
Person, on the other hand, shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been taken by, or relates to information supplied by, such
indemnifying party or indemnified Person, and the Persons' relative intent,
knowledge, access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with any Proceeding,
to the extent such party would have been indemnified for such expenses if the
indemnification provided for in Section 6(a) or 6(b) were available to such
party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 6(d), an
indemnifying party
<PAGE> 49
that is a selling holder of Registrable Securities shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by such indemnifying party and distributed to
the public were offered to the public (net of any commissions and expenses)
exceeds the amount of any damages that such indemnifying party has otherwise
been required to pay or had paid by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(e) Remedies Cumulative. The indemnity, contribution and expense
reimbursement obligations under this Section 6 shall be in addition to any
liability each indemnifying party may otherwise have and shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any indemnified Person.
Section 7. Agreements and Covenants.
(a) Company Agreements and Covenants. The Company covenants and
agrees with each holder of Registrable Securities that:
(i) When the Registration Statement becomes effective,
and at all times subsequent thereto, and during such longer period as
the Prospectus may be required to be delivered in connection with
sales of the Registrable Securities by the holder, or by a dealer,
and during such longer period until any post-effective amendment
thereto shall become effective, the Registration Statement (and any
post-effective amendment thereto) and the Prospectus (as amended or as
supplemented ) will contain all statements which are required to be
stated therein in accordance with the Securities Act and the
Regulations, and will not contain any untrue statement of a material
fact or omit to state any material fact (except such information which
is omitted from the Registration Statement pursuant to Rule 430A of
the Regulations) required to be stated therein or necessary to make
the statements therein not misleading, and no event will have occurred
which should have been set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not then been set
forth in such an amendment or supplement; each Preliminary Prospectus,
as of the date filed with the SEC, will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that no representation or
warranty is made in this clause (i) of Section 7(a) hereof with
respect to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company pursuant
to clause (ii) of Section 7(b) hereof. Each of the documents filed
pursuant to the Exchange Act and incorporated or deemed to be
incorporated by reference in the Registration Statement will comply in
all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder.
<PAGE> 50
(ii) The Company shall not enter into any transaction
involving the issuance or transfer by any other Person of Other
Securities to any holder, or any merger or consolidation in which it
is not the surviving Person, or any sale, lease or other transfer of
all or substantially all of the assets of the Company, unless
effective provision is made for the assumption by such other Person,
jointly and severally with the Company if the Company shall remain in
existence, of all of the obligations of the Company hereunder, and, in
the case of any such issuance or transfer, the registration of such
Other Securities on the same basis as the registration of the other
Registrable Securities hereunder.
(iii) The Company shall take such actions as any holder of
Registrable Securities may reasonably request to enable such holder to
sell or otherwise transfer some or all of such holder's Registrable
Securities pursuant to and in compliance with all of the terms and
conditions of Rule 144 or Rule 144A of the Regulations.
(b) Holder Agreements and Covenants. Each holder of Registrable
Securities agrees by acquisition of such Registrable Securities that:
(i) Neither any holder nor any of the holders' affiliates
(as defined in the Regulations) will take, directly or indirectly,
during the term of this Agreement, any action designed to stabilize
(except as may be permitted by applicable law) or manipulate the price
of any security of the Company.
(ii) Each holder shall promptly furnish to the Company any
and all information as may be required by, or as may be necessary or
advisable to comply with the provisions of, the Securities Act, the
Regulations, the Exchange Act, and the rules and regulations of the
SEC thereunder in connection with the preparation and filing of any
Registration Statement pursuant hereto, or any amendment or supplement
thereto, or any Preliminary Prospectus or Prospectus included therein.
All information to be so furnished will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(iii) Upon receipt of any notice from the Company of the
happening of any event of the kind described in clauses (ii), (iii),
(iv) or (v) of Section 4(c) above, such holder will forthwith
discontinue disposition of such Registrable Securities covered by such
Registration Statement or Prospectus until such holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by
Section 4(j) above, or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or supplements
thereto. In the event the Company shall give any notice referred to
in the prior sentence, the Effectiveness Period shall be extended by
the number of days during such period from and including the date of
the giving of such notice to and including the date when each seller
of Registrable Securities covered by such Registration Statement shall
have
<PAGE> 51
received (A) the copies of the supplemented or amended Prospectus
contemplated by Section 4(j) above or (B) the Advice.
(iv) Prior to any disposition of Registrable Securities by
the holder thereof during the Effectiveness Period, such holder shall
give written notice of such intended disposition to the Company,
including the anticipated date thereof, and such holder shall not
effect such disposition until he or it shall have received from the
Company either (A) copies of a supplemented or amended Prospectus
contemplated in Section 4(j) above, or (B) the Advice and copies of
any amendments or supplements to the then in use Prospectus in
accordance with clause (iii) of this Section 7(b).
Section 8. Survival of Representations and Agreements.
All representations, warranties, covenants, and agreements contained
in this Agreement shall be deemed to be representations, warranties, covenants,
and agreements at the effective date of each Registration Statement
contemplated by this Agreement, and such representations, warranties,
covenants, and agreements, including, without limitation, the indemnity and
contribution agreements contained in Section 6 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Company, any holder, or any Person which is entitled to be
indemnified under Section 6 hereof, and shall survive termination of this
Agreement.
Section 9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of any of
its obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights provided herein, in the
Merger Agreement or granted by law, including, without limitation, recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each holder agree that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by the
Company or such holder, as the case may be, of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, the Company or such holder, as
the case may be, shall waive the defense that a remedy at law would be
adequate.
(b) Amendments and Waivers. This Agreement may not be amended,
modified or supplemented, nor shall any waiver or consent to depart from the
provisions hereof be effective, without the express written consent of each
party hereto. No failure or delay on the part of the Company or any holder of
Registrable Securities in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.
<PAGE> 52
(c) Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given if delivered
personally or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
if to the Company, to: ONEOK Inc.
P. O. Box 871
Tulsa, Oklahoma 74102-0871
Attention: President
if to Ward: Ward Petroleum Corporation
502 South Fillmore
Enid, Oklahoma 73703
Attention: Richard R. Tozzi
if to the Walters Trust, to: c/o James C. Walters
4214 E. 97th Street
Tulsa, Oklahoma 74137
(d) Interpretation. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. For purposes of this Agreement, "reasonable
best efforts" shall mean the lawful efforts that a prudent business person
desirous of achieving a result would use under similar circumstances to attempt
to achieve such result as expeditiously as is reasonably practicable.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
(f) Entire Agreement; No Third Party Beneficiaries. Except for
the Merger Agreement, this Agreement (including the documents and the
instruments referred to herein) (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, and (ii) except as
contemplated by Section 6 hereof, is not intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
(g) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Oklahoma, without regard to
principles of conflicts of law.
(h) Severability. Wherever possible, each provision hereof shall
be interpreted in such a manner as to be valid, legal and enforceable under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability without invalidating or rendering
unenforceable the
<PAGE> 53
remainder of this Agreement, unless such a construction would be unreasonable
or materially impair the rights of any party hereto.
(i) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective heirs, successors and assigns.
(j) Attorneys' Fees. As between the parties to this Agreement, in
any action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to
its costs and expenses and any other available remedy.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
ONEOK INC.
By:
Name: ______________________________
Title: _____________________________
WARD PETROLEUM CORPORATION
By:
Name: ______________________________
Title: _____________________________
____________________________________
____________________________________
James Christopher Walters, Jr. and
LaVonne Diane Walters, Trustees of
the James Christopher Walters, Jr.
Trust Dated August 3, 1983
<PAGE> 54
EXHIBIT B
EMPLOYMENT AGREEMENT
This Agreement is made and entered into this ___ day of February,
1995, by and between ONEOK Gas Marketing Company, a Delaware corporation
(hereinafter referred to as the "Company"), and James C. Walters, an individual
currently residing in Tulsa, Oklahoma (who is referred to as "Employee"); the
Company and Employee may sometimes be referred to herein individually as the
"Party" and jointly as the "Parties."
For and in consideration of the premises and the terms, covenants, and
promises and conditions herein contained, the Parties hereto mutually covenant
and agree as follows:
1. Duties. For the Term of Services (as hereinafter defined)
Employee will devote all of his time and attention and give his best efforts
and skill to the business and interest of the Company and its subsidiaries and
affiliates. Employee shall in all respects do his utmost to further enhance
and develop the best interests and welfare of the Company and its subsidiaries
and affiliates. Employee is hereby employed as President of the Company to
perform such duties as are usually considered to be within the scope of the
position for which he is employed and the Company hereby grants to employee the
usual authority commensurate with such position that he may hold from time to
time, as such authority shall be modified by the Company. Employee shall be
provided with office facilities, equipment and services deemed by the Company
suitable to his position and adequate for the performance of his duties.
Employee shall work for the Company in the Company's Tulsa, Oklahoma office.
2. Term of Services. Unless sooner terminated under other
provisions of this Agreement, the "Term of Services" as used herein shall mean
the period commencing on the date of this Agreement and continuing through
December 31, 1999, and from year to year thereafter unless terminated by either
party hereunder by written notice given to the other party at least thirty (30)
days prior to the end of the initial period or any annual extension thereof.
3. Compensation and Benefits. For and in consideration of the
performance by Employee of the services, terms, conditions, covenants and
promises herein recited effective from January 1, 1995, the Company agrees and
promises to pay to Employee at the times and in the manner herein stated, the
following:
a. As the principal consideration for the services to be
performed by Employee hereunder, Employee shall receive, as annual salary, the
sum of Two Hundred Fourteen Thousand and No/100 Dollars ($214,000.00) per year,
payable semi-monthly as same shall accrue, or at such more frequent intervals
as the Company and Employee may
<PAGE> 55
EXHIBIT B
hereafter from time to time agree. Employee's salary may be increased during
the term hereof pursuant to, and the Employee will be included within, the
Company's policies and procedures regarding salary increases. Provided, that
the first payment shall be made at the next semi-monthly payment date after the
beginning of the Term of Services for all amounts accrued to such date.
b. In addition to the above, the Company agrees to provide
Employee with the following benefits in accordance with terms and conditions of
plans relating to such benefits:
(1) Inclusion of Employee in the Company's regular
medical and dental health insurance and long term disability plans;
(2) Group life, accidental death and travel accident
insurance benefits in an amount provided for in the policies;
(3) Inclusion of Employee in any present pension, thrift,
and employee stock ownership plans (including executive stock
performance plans), if any; and
(4) An automobile allowance of $600.00 per month until
expiration of the lease on the vehicle presently used by Employee for
business purposes and thereafter Employee shall be provided a vehicle
in accordance with the Company's policy in respect thereto; and
c. Upon submission of expense account reports and supporting
documents as required by the Internal Revenue Service, Employee shall be
reimbursed for all reasonable travel, automobile, entertainment and other
reasonable and necessary expenses incurred by Employee in the performance of
his duties and services hereunder; and
d. Employee shall be entitled to annual paid vacations of three
(3) weeks. Employee shall also be entitled to participate in the sick pay plan
of the Company.
4. Key Man Life-Insurance. At any time during the term of this
Agreement, the Company shall have the right to insure the life of the Employee
for the Company's sole benefit, and to determine the amount of insurance and
the type of policy. The Company shall be required to pay all premiums due on
such policies. The Employee shall cooperate with the Company in taking out the
insurance by submitting to physical examination, by supplying all information
required by the insurance company, and by executing all necessary documents.
The Employee, however, shall incur no financial obligation by executing any
required document, and shall have no interest in any such policy.
-2-
<PAGE> 56
EXHIBIT B
5. General Covenants of Employee. For and in consideration of
the employment herein contemplated and the consideration paid or promised to be
paid by the Company, Employee does hereby covenant, agree and promise as
follows:
a. That he will not actively engage, as an employee, officer
consultant, agent, representative, partner, owner or co-owner, in any other
business in competition with the Company, except at the direction, or with the
approval of the Company and that he will comply with the Company's Conflict of
Interest policy, except that the Company acknowledges and approves the
interests owned by Employee as listed on Exhibit A, attached hereto.
b. That he will truthfully and accurately make, maintain and
preserve all records and reports that the Company may, from time to time,
request or require and will fully account for all money, records, goods, wares
and merchandise or other property belonging to the Company of which he may have
custody and will pay over and deliver same promptly whenever and however he may
be directed to do so.
c. That he will willingly obey all rules, regulations and special
instructions applicable to him (including, but not limited to, drug testing and
physical examination) and will be loyal and faithful at all times, constantly
endeavoring to improve his ability and knowledge of the business in an effort
to increase the value of his services for the mutual benefit of the Parties
hereto.
d. That he will make available to the Company any and all of the
information of which he has knowledge, and will make all suggestions and
recommendations which he feels will be of mutual benefit to the parties hereto.
6. Special Covenants of Employee.
a. Covenant Not to Compete. Except for the interests listed on
Exhibit A hereto, so long as Employee is an employee of the Company, he will
not undertake, directly or indirectly, to plan, organize, promote or
participate in any business activity which is competitive with the business
activities performed or carried on by the Company, or any corporate or other
entity with which the Company may be affiliated, or otherwise adverse to the
business of the Company or any such affiliated entity, whether alone, in
partnership, or as an officer, director, employee, agent, shareholder (other
than an interest of less than five percent in a public company), consultant,
advisor, manager, joint venturer or otherwise of any firm, organization or
other corporate or legal entity.
b. Covenant of Non-Solicitation and Non-Interference. For a
period of one (1) year following the termination of Employee's services
hereunder as an employee, and, notwithstanding the manner,
-3-
<PAGE> 57
EXHIBIT B
time or cause of such termination, Employee shall not directly or indirectly,
employ or associate with, or attempt to employ or associate with, any personnel
who were in the employ of the Company or agent associated with the Company, at
the time of Employee's termination.
c. Covenant of Non-Disclosure.
(1) Employee acknowledges that in the course of his employment
hereunder as an employee he will become acquainted with confidential
information belonging to the Company including without limitation, information
relating to persons, firms and corporations doing business with the Company and
information relating to the business of the Company. Accordingly, Employee
expressly covenants and agrees to treat, as confidential, any information
obtained or developed concerning the customers, accounts, business techniques,
methods, systems, books, plans, marketing or sales techniques or programs,
procedures or policies of the Company. Employee further agrees that he will
not at any time while he is employed by the Company or thereafter, without the
prior express written consent of the Company's Chairman of the Board in each
instance, disclose or divulge any such information in whole or in part to any
person, partnership, corporation or other entity, for any reason or purpose
whatsoever, or otherwise use any such information in any way or in any capacity
other than as an employee of the Company in furtherance of the interests of the
Company.
(2) Employee recognizes that the disclosure of confidential
information by Employee as an employee may give rise to irreparable injury to
the Company, which may not be adequately compensated by damages. Accordingly,
in the event of a breach or threatened breach by Employee of the provision of
this paragraph, the Company shall be entitled to an injunction restraining
Employee from disclosing, in whole or in part, the confidential information
defined hereinabove or from rendering any services to any person, firm,
corporation, association or other entity to whom such confidential information,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company for such breach or threatened breach,
including the recovery of damages from Employee.
d. Restrictive Covenant. If the employment of Employee is
terminated for cause, for a period of two years after such termination, the
Employee shall not, within Tulsa County and any adjacent counties, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or
be connected in any manner with the ownership, management, operation, or
control of any business similar to the type of business conducted by the
Company at the time this Agreement terminates other than the interests listed
on Exhibit A hereto and any ownership interest of less than five percent in a
public company. Further, Employee shall not
-4-
<PAGE> 58
EXHIBIT B
within one year from the date of such termination in any way, directly or
indirectly, for himself or in behalf of or in conjunction with another or
others solicit, divert, or attempt to take away any customers or suppliers of
gas of the Company existing at the time of such termination. In the event of
the Employee's actual or threatened breach of this paragraph, the Company shall
be entitled to a preliminary restraining order and injunction restraining the
Employee from violating its provisions. Nothing in this Agreement shall be
construed to prohibit the Company from pursuing any other available remedies
for such breach or threatened breach, including the recovery of damages from
the Employee.
e. Survival of Covenants. The undertakings contained in this
section shall survive the termination or cancellation of this Agreement or of
Employee's employment as an employee of the Company.
7. Termination of Employee as an employee of the Company. The
Company shall have the right to terminate the employment of Employee effective
immediately without notice for "cause." For the purposes hereof, the following
shall constitute "cause" to-wit:
a. The Company determines, in its sole discretion, that Employee
has failed to devote his full time and attention or to diligently perform any
of the duties and services to be performed by him under this Agreement; or
b. Employee violates any material provision of this Agreement; or
c. The Board of Directors, acting reasonably, shall determine
that Employee, by willful misconduct or negligent inattention to the business
welfare of the Company, has materially injured the business of the Company or
any of its affiliates; or
d. Employee is convicted of any offense punishable by the laws of
the United States of America, or any State or subdivision thereof, as a felony
or other crime involving moral turpitude or immoral conduct, regardless of
whether the same shall be punishable as a felony or not; or
e. Employee engages in any activity which competes in any way,
directly or indirectly, with the business of the Company or any entity with
which the Company is affiliated or otherwise which shall violate any of the
provisions of Section 5(a) and Section 6 above; or
f. Except when reasonably necessary and in the ordinary course of
the regular business of the Company, Employee discloses to any person,
partnership, corporation or other entity, not expressly authorized by the
Chairman of the Board in writing to receive such disclosure, any contracts,
customer or customer lists,
-5-
<PAGE> 59
EXHIBIT B
business techniques, methods, systems, financial books, plans, procedures or
policies, or other proprietary documents or information acquired in the course
of his employment by the Company; or
g. Employee fails to return, upon written request of the Board,
any contracts, customer lists, books, plans, procedures or policy manuals, data
or other proprietary documents or information as may have come into his
possession as a result of his employment with the Company or which may have
been prepared or disseminated by the Company or any corporate or other entity
with which the Company is affiliated in the first instance, or otherwise
developed, prepared and compiled by or for the benefit of Employee in the
performance of his duties pursuant to the terms of this Agreement; or
h. Employee becomes mentally or physically incapacitated and as a
result is unable to perform the services, duties and obligations as he is
required to perform under this Agreement on a full time basis and commences
receiving sick pay benefits from the Company, such sick pay and any long term
disability benefits of the Company to survive the termination of this
Agreement; or
i. Upon the death of Employee.
In the event of termination hereunder, Employee shall be paid his regular
compensation up to the date of termination only.
8. General.
a. Time shall be of the essence in all things pertaining to the
performance of this Agreement unless waived in writing by the Parties to this
Agreement.
b. The terms and provisions of this Agreement shall inure to,
extend to and be for the benefit of the heirs, assigns, successors and legal
representatives of the respective Parties.
c. This Agreement constitutes the entire agreement between the
Parties respecting the services of Employee, and there are no representations,
warranties or commitments except as set forth herein. This Agreement may be
amended only by an instrument in writing executed by the Parties hereto.
d. Any notice, request, demand or other communication hereunder
shall be in writing and shall be deemed to be duly given when personally
delivered to an executive officer of the Company or to Employee, as the case
may be.
e. Any controversy or claim arising out of, or relating to this
Agreement, or its breach, shall be settled by arbitration in the City of Tulsa
in accordance with the then governing rules of the American Arbitration
Association. Judgment upon the award
-6-
<PAGE> 60
EXHIBIT B
rendered may be entered and enforced in any court of competent jurisdiction.
f. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Oklahoma.
g. If any provisions of this Agreement shall, for any reason, be
held violative of any applicable law, and so much of said Agreement is held to
be unenforceable, then the invalidity of such specific provision herein shall
not be held to invalidate any other provision herein which shall remain in full
force and effect.
h. The parties do hereby stipulate and agree that the
relationship created by this Agreement between the Company and Employee is
strictly that of an employer and employee, and nothing more. Nothing herein
contained shall be construed to create the relationship of partners, joint
venturers or otherwise between the Company and Employee or between any other
employees of the Company and Employee.
i. This Agreement is personal to each of the Parties hereto, and,
except as herein otherwise provided, neither Party may assign or delegate any
of the rights or obligations hereunder without first obtaining a written
consent of the other Party.
ONEOK Gas Marketing Company
By___________________________
President
"COMPANY"
_____________________________
James C. Walters
"EMPLOYEE"
-7-
<PAGE> 61
EXHIBIT B
EXHIBIT A
To Employment Agreement Effective ______________, 1995
Between ONEOK Gas Marketing Company
and
James C. Walters
The interests of James C. Walters (the "Employee") in the following
entities shall not violate the prohibitions contained in the Employment
Agreement:
Calika Limited Partnership
Kotzer Well South Texas
Questa Energy 8 Wells East Coast
Sanguine Gathering System 2 Wells, Kephart & Kincaid
Ward Groendyke Ranch Gathering System
Patriot Minerals, L.L.C.
Gale Force Compression Services
Alexander 1-24 Beckham County, Oklahoma
Claremont Exploration East Wellston Prospect, Lincoln County,
Oklahoma
Comanche Gas Gathering Company
<PAGE> 62
EXHIBIT C
EMPLOYMENT AGREEMENT
This Agreement is made and entered into this ___ day of February,
1995, by and between ONEOK Gas Marketing Company, a Delaware corporation
(hereinafter referred to as the "Company"), and Donald T. Jacobsen, an
individual currently residing in Tulsa, Oklahoma (who is referred to as
"Employee"); the Company and Employee may sometimes be referred to herein
individually as the "Party" and jointly as the "Parties."
For and in consideration of the premises and the terms, covenants, and
promises and conditions herein contained, the Parties hereto mutually covenant
and agree as follows:
1. Duties. For the Term of Services (as hereinafter defined)
Employee will devote all of his time and attention and give his best efforts
and skill to the business and interest of the Company and its subsidiaries and
affiliates. Employee shall in all respects do his utmost to further enhance
and develop the best interests and welfare of the Company and its subsidiaries
and affiliates. Employee is hereby employed as a Vice President of the Company
to perform such duties as are usually considered to be within the scope of the
position for which he is employed and the Company hereby grants to employee the
usual authority commensurate with such position that he may hold from time to
time, as such authority shall be modified by the Company. Employee shall be
provided with office facilities, equipment and services deemed by the Company
suitable to his position and adequate for the performance of his duties.
Employee shall work for the Company in the Company's Tulsa, Oklahoma office.
2. Term of Services. Unless sooner terminated under other
provisions of this Agreement, the "Term of Services" as used herein shall mean
the period commencing on the date of this Agreement and continuing through
December 31, 1999, and from year to year thereafter unless terminated by either
party hereunder by written notice given to the other party at least thirty (30)
days prior to the end of the initial period or any annual extension thereof.
3. Compensation and Benefits. For and in consideration of the
performance by Employee of the services, terms, conditions, covenants and
promises herein recited effective from January 1, 1995, the Company agrees and
promises to pay to Employee at the times and in the manner herein stated, the
following:
a. As the principal consideration for the services to be
performed by Employee hereunder, Employee shall receive, as annual salary, the
sum of One Hundred Forty Thousand and No/100 Dollars ($140,000.00) per year,
payable semi-monthly as same shall accrue, or at such more frequent intervals
as the Company and Employee may
<PAGE> 63
EXHIBIT C
hereafter from time to time agree. Employee's salary may be increased during
the term hereof pursuant to, and the Employee will be included within, the
Company's policies and procedures regarding salary increases. Provided, that
the first payment shall be made at the next semi-monthly payment date after the
beginning of the Term of Services for all amounts accrued to such date.
b. In addition to the above, the Company agrees to provide
Employee with the following benefits in accordance with terms and conditions of
plans relating to such benefits:
(1) Inclusion of Employee in the Company's regular
medical and dental health insurance and long term disability plans;
(2) Group life, accidental death and travel accident
insurance benefits in an amount provided for in the policies;
(3) Inclusion of Employee in any present pension, thrift,
and employee stock ownership plans (including executive stock
performance plans), if any; and
(4) An automobile allowance of $500.00 per month until
expiration of the lease on the vehicle presently used by Employee for
business purposes and thereafter Employee shall be provided a vehicle
in accordance with the Company's policy in respect thereto; and
c. Upon submission of expense account reports and supporting
documents as required by the Internal Revenue Service, Employee shall be
reimbursed for all reasonable travel, automobile, entertainment and other
reasonable and necessary expenses incurred by Employee in the performance of
his duties and services hereunder; and
d. Employee shall be entitled to annual paid vacations of three
(3) weeks. Employee shall also be entitled to participate in the sick pay plan
of the Company.
4. Key Man Life-Insurance. At any time during the term of this
Agreement, the Company shall have the right to insure the life of the Employee
for the Company's sole benefit, and to determine the amount of insurance and
the type of policy. The Company shall be required to pay all premiums due on
such policies. The Employee shall cooperate with the Company in taking out the
insurance by submitting to physical examination, by supplying all information
required by the insurance company, and by executing all necessary documents.
The Employee, however, shall incur no financial obligation by executing any
required document, and shall have no interest in any such policy.
-2-
<PAGE> 64
EXHIBIT C
5. General Covenants of Employee. For and in consideration of
the employment herein contemplated and the consideration paid or promised to be
paid by the Company, Employee does hereby covenant, agree and promise as
follows:
a. That he will not actively engage, as an employee, officer
consultant, agent, representative, partner, owner or co-owner, in any other
business in competition with the Company, except at the direction, or with the
approval of the Company and that he will comply with the Company's Conflict of
Interest policy.
b. That he will truthfully and accurately make, maintain and
preserve all records and reports that the Company may, from time to time,
request or require and will fully account for all money, records, goods, wares
and merchandise or other property belonging to the Company of which he may have
custody and will pay over and deliver same promptly whenever and however he may
be directed to do so.
c. That he will willingly obey all rules, regulations and special
instructions applicable to him (including, but not limited to, drug testing and
physical examination) and will be loyal and faithful at all times, constantly
endeavoring to improve his ability and knowledge of the business in an effort
to increase the value of his services for the mutual benefit of the Parties
hereto.
d. That he will make available to the Company any and all of the
information of which he has knowledge, and will make all suggestions and
recommendations which he feels will be of mutual benefit to the parties hereto.
6. Special Covenants of Employee.
a. Covenant Not to Compete. So long as Employee is an employee
of the Company, he will not undertake, directly or indirectly, to plan,
organize, promote or participate in any business activity which is competitive
with the business activities performed or carried on by the Company, or any
corporate or other entity with which the Company may be affiliated, or
otherwise adverse to the business of the Company or any such affiliated entity,
whether alone, in partnership, or as an officer, director, employee, agent,
shareholder (other than an interest of less than five percent in a public
company), consultant, advisor, manager, joint venturer or otherwise of any
firm, organization or other corporate or legal entity.
b. Covenant of Non-Solicitation and Non-Interference. For a
period of one (1) year following the termination of Employee's services
hereunder as an employee, and, notwithstanding the manner, time or cause of
such termination, Employee shall not directly or indirectly, employ or
associate with, or attempt to employ or associate with, any personnel who were
in the employ of the Company
-3-
<PAGE> 65
EXHIBIT C
or agent associated with the Company, at the time of Employee's termination.
c. Covenant of Non-Disclosure.
(1) Employee acknowledges that in the course of his employment
hereunder as an employee he will become acquainted with confidential
information belonging to the Company including without limitation, information
relating to persons, firms and corporations doing business with the Company and
information relating to the business of the Company. Accordingly, Employee
expressly covenants and agrees to treat, as confidential, any information
obtained or developed concerning the customers, accounts, business techniques,
methods, systems, books, plans, marketing or sales techniques or programs,
procedures or policies of the Company. Employee further agrees that he will
not at any time while he is employed by the Company or thereafter, without the
prior express written consent of the Company's Chairman of the Board in each
instance, disclose or divulge any such information in whole or in part to any
person, partnership, corporation or other entity, for any reason or purpose
whatsoever, or otherwise use any such information in any way or in any capacity
other than as an employee of the Company in furtherance of the interests of the
Company.
(2) Employee recognizes that the disclosure of confidential
information by Employee as an employee may give rise to irreparable injury to
the Company, which may not be adequately compensated by damages. Accordingly,
in the event of a breach or threatened breach by Employee of the provision of
this paragraph, the Company shall be entitled to an injunction restraining
Employee from disclosing, in whole or in part, the confidential information
defined hereinabove or from rendering any services to any person, firm,
corporation, association or other entity to whom such confidential information,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company for such breach or threatened breach,
including the recovery of damages from Employee.
d. Restrictive Covenant. If the employment of Employee is
terminated for cause, for a period of two years after such termination, the
Employee shall not, within Tulsa County or any adjacent counties, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or
be connected in any manner with the ownership, management, operation, or
control of any business similar to the type of business conducted by the
Company at the time this Agreement terminates other than any ownership interest
of less than five percent in a public company. Further, Employee shall not
within one year from the date of such termination in any way, directly or
indirectly, for himself or in behalf of or in conjunction with another or
others solicit, divert, or attempt to take away any customers or suppliers of
gas of the
-4-
<PAGE> 66
EXHIBIT C
Company existing at the time of such termination. In the event of the
Employee's actual or threatened breach of this paragraph, the Company shall be
entitled to a preliminary restraining order and injunction restraining the
Employee from violating its provisions. Nothing in this Agreement shall be
construed to prohibit the Company from pursuing any other available remedies
for such breach or threatened breach, including the recovery of damages from
the Employee.
e. Survival of Covenants. The undertakings contained in this
section shall survive the termination or cancellation of this Agreement or of
Employee's employment as an employee of the Company.
7. Termination of Employee as an employee of the Company. The
Company shall have the right to terminate the employment of Employee effective
immediately without notice for "cause." For the purposes hereof, the following
shall constitute "cause" to-wit:
a. The Company determines, in its sole discretion, that Employee
has failed to devote his full time and attention or to diligently perform any
of the duties and services to be performed by him under this Agreement; or
b. Employee violates any material provision of this Agreement; or
c. The Board of Directors, acting reasonably, shall determine
that Employee, by willful misconduct or negligent inattention to the business
welfare of the Company, has materially injured the business of the Company or
any of its affiliates; or
d. Employee is convicted of any offense punishable by the laws of
the United States of America, or any State or subdivision thereof, as a felony
or other crime involving moral turpitude or immoral conduct, regardless of
whether the same shall be punishable as a felony or not; or
e. Employee engages in any activity which competes in any way,
directly or indirectly, with the business of the Company or any entity with
which the Company is affiliated or otherwise which shall violate any of the
provisions of Section 5(a) and Section 6 above; or
f. Except when reasonably necessary and in the ordinary course of
the regular business of the Company, Employee discloses to any person,
partnership, corporation or other entity, not expressly authorized by the
Chairman of the Board in writing to receive such disclosure, any contracts,
customer or customer lists, business techniques, methods, systems, financial
books, plans, procedures or policies, or other proprietary documents or
information acquired in the course of his employment by the Company; or
-5-
<PAGE> 67
EXHIBIT C
g. Employee fails to return, upon written request of the Board,
any contracts, customer lists, books, plans, procedures or policy manuals, data
or other proprietary documents or information as may have come into his
possession as a result of his employment with the Company or which may have
been prepared or disseminated by the Company or any corporate or other entity
with which the Company is affiliated in the first instance, or otherwise
developed, prepared and compiled by or for the benefit of Employee in the
performance of his duties pursuant to the terms of this Agreement; or
h. Employee becomes mentally or physically incapacitated and as a
result is unable to perform the services, duties and obligations as he is
required to perform under this Agreement on a full time basis and commences
receiving sick pay benefits from the Company, such sick pay and any long term
disability benefits of the Company to survive the termination of this
Agreement; or
i. Upon the death of Employee.
In the event of termination hereunder, Employee shall be paid his regular
compensation up to the date of termination only.
8. General.
a. Time shall be of the essence in all things pertaining to the
performance of this Agreement unless waived in writing by the Parties to this
Agreement.
b. The terms and provisions of this Agreement shall inure to,
extend to and be for the benefit of the heirs, assigns, successors and legal
representatives of the respective Parties.
c. This Agreement constitutes the entire agreement between the
Parties respecting the services of Employee, and there are no representations,
warranties or commitments except as set forth herein. This Agreement may be
amended only by an instrument in writing executed by the Parties hereto.
d. Any notice, request, demand or other communication hereunder
shall be in writing and shall be deemed to be duly given when personally
delivered to an executive officer of the Company or to Employee, as the case
may be.
e. Any controversy or claim arising out of, or relating to this
Agreement, or its breach, shall be settled by arbitration in the City of Tulsa
in accordance with the then governing rules of the American Arbitration
Association. Judgment upon the award rendered may be entered and enforced in
any court of competent jurisdiction.
-6-
<PAGE> 68
EXHIBIT C
f. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Oklahoma.
g. If any provisions of this Agreement shall, for any reason, be
held violative of any applicable law, and so much of said Agreement is held to
be unenforceable, then the invalidity of such specific provision herein shall
not be held to invalidate any other provision herein which shall remain in full
force and effect.
h. The parties do hereby stipulate and agree that the
relationship created by this Agreement between the Company and Employee is
strictly that of an employer and employee, and nothing more. Nothing herein
contained shall be construed to create the relationship of partners, joint
venturers or otherwise between the Company and Employee or between any other
employees of the Company and Employee.
i. This Agreement is personal to each of the Parties hereto, and,
except as herein otherwise provided, neither Party may assign or delegate any
of the rights or obligations hereunder without first obtaining a written
consent of the other Party.
ONEOK Gas Marketing Company
By___________________________
President
"COMPANY"
_____________________________
Donald T. Jacobsen
"EMPLOYEE"
-7-
<PAGE> 69
EXHIBIT D
February 23, 1995
Ward Petroleum Corporation
P.O. Box 1187
502 S. Fillmore
Enid, OK 73702
James Christopher Walters, Jr. and LaVonne Diane Walters,
as Trustees of the James Christopher Walters, Jr.
Trust dated August 3, 1983
4214 E. 97th St.
Tulsa, OK 74137
Ladies and Gentlemen:
We have acted as counsel for ONEOK Inc., a Delaware corporation
("ONEOK") and ONEOK Gas Marketing Company, a Delaware corporation ("ONEOK
Marketing") in connection with the acquisition by ONEOK of Ward Gas Services,
Inc., an Oklahoma corporation ("Ward Services") and Comanche Gas Marketing
Company, an Oklahoma corporation ("Comanche") through their merger with and
into ONEOK's wholly-owned subsidiary, ONEOK Marketing, pursuant to a certain
Agreement and Plan of Merger (the "Agreement") dated February 23, 1995, by and
between ONEOK, ONEOK Marketing, Ward Services, Ward Petroleum Corporation, an
Oklahoma corporation, Comanche and James Christopher Walters, Jr. and LaVonne
Diane Walters, Trustees of the James Christopher Walters, Jr. Trust dated
August 3, 1983. This opinion is given pursuant to Section VIII.B.2.d of the
Agreement. All terms used herein that are defined in the Agreement have the
respective meanings specified in the Agreement.
We have participated in the preparation of the Agreement and the
Exhibits and other documents referred to therein. We have examined the
certificates of public officials, certificates of officers of ONEOK and copies,
certified to our satisfaction, of corporate documents and records of ONEOK and
ONEOK Marketing and other papers, and have made such other investigations as we
have deemed relevant and necessary as a basis for our opinion hereafter set
forth. We have relied upon such certificates of public
<PAGE> 70
Ward Petroleum Corporation
James Christopher Walters, Jr. and LaVonne Diane Walters,
as Trustees of the James Christopher Walters, Jr.
Trust dated August 3, 1983
February 23, 1995
Page 2
officials and officers of ONEOK and ONEOK Marketing with respect to the
accuracy of material factual matters contained therein which were not
independently established. Nothing, however, has come to our attention to
cause us to believe that any factual matters are untrue. In our examination of
the documents referred to above, we have assumed due authorization, execution,
and delivery of the Agreement by all parties thereto other than ONEOK and ONEOK
Marketing, the authenticity of all other documents submitted to us as original
documents, and the conformity to original documents of all documents submitted
to us as copies thereof.
Based on the foregoing and upon such investigation as we deem
necessary, we are of the opinion that:
9. ONEOK is a corporation duly organized and existing under, and
by virtue of, the laws of the State of Delaware and is in good standing under
its laws. ONEOK is qualified, licensed, or domesticated as a foreign
corporation in the State of Oklahoma.
10. ONEOK Marketing is a corporation duly organized and existing
under, and by virtue of, the laws of the State of Delaware and is in good
standing under its laws. ONEOK Marketing is qualified, licensed, or
domesticated as a foreign corporation in each jurisdiction where the nature of
its activities or the properties owned or leased by it makes such
qualification, licensing, or domestication necessary at this time.
11. Both ONEOK and ONEOK Marketing have all requisite legal and
corporate power to enter into the Agreement and to carry out and perform their
respective obligations under the terms of the Agreement. Neither the
certificates of incorporation nor bylaws of ONEOK and ONEOK Marketing, nor to
our knowledge, any other instrument to which ONEOK and ONEOK Marketing are
parties, or by which either is bound, nor any court order or any governmental
law, rule or regulation, will be violated by ONEOK's or ONEOK Marketing's
execution and consummation of the Agreement.
12. To our knowledge, neither ONEOK nor ONEOK Marketing is subject
to any order, judgment or decree, or the subject of any litigation, claim or
proceeding, pending or threatened, or any other restriction of any kind or
character, which would affect its ability to carry out the transactions
contemplated by the Agreement.
<PAGE> 71
Ward Petroleum Corporation
James Christopher Walters, Jr. and LaVonne Diane Walters,
as Trustees of the James Christopher Walters, Jr.
Trust dated August 3, 1983
February 23, 1995
Page 3
13. All corporate action on the part of ONEOK and ONEOK Marketing,
their directors, and stockholders necessary for the transactions contemplated
by the Agreement have been taken. The Agreement is a legal, valid, and binding
obligation of ONEOK and ONEOK Marketing, enforceable against each corporation
in accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting
enforcement of creditors' rights, and except as limited by application of legal
principles affecting the availability of equitable remedies.
14. Other than filings required under the HSR Act and the filing
of Certificates of Merger with the Secretaries of State of Delaware and
Oklahoma, no consent, approval, or authorization of, or designation,
declaration, or filing with, any governmental unit is required on the part of
ONEOK or ONEOK Marketing in connection with the valid execution and delivery of
the Agreement or the consummation of the transactions contemplated hereby.
15. To our knowledge, there are no actions, proceedings, or
investigations pending, or any basis thereof or threat therefor, which question
the validity of the Agreement or any other action taken or to be taken in
connection with the transactions contemplated by the Agreement.
16. The Common Stock delivered to Ward and the Walters Trust at
the Closing is duly authorized, validly issued, fully paid, and nonassessable.
Our opinion is limited to the laws of the State of Oklahoma, the
Delaware General Corporate Law and the Federal law of the United States of
America and we do not express any opinions herein concerning any other laws.
This letter is furnished solely for your benefit in connection with
the transactions referred to in the Agreement and may not be relied upon for
any other purpose, and may not be furnished to, used by, circulated, quoted, or
referred to by any other person
<PAGE> 72
Ward Petroleum Corporation
James Christopher Walters, Jr. and LaVonne Diane Walters,
as Trustees of the James Christopher Walters, Jr.
Trust dated August 3, 1983
February 23, 1995
Page 4
without our prior written consent which may in each instance be withheld at our
sole discretion.
ARRINGTON KIHLE GABERINO & DUNN, INC.,
A Professional Corporation
By___________________________________
Donald A. Kihle
President
<PAGE> 73
[CONNER & WINTERS LETTERHEAD]
February __, 1995
ONEOK Inc.
P. O. Box 871
Tulsa, Oklahoma 74102-0871
and
ONEOK Gas Marketing Company
P. O. Box 871
Tulsa, Oklahoma 74102-0871
Ladies and Gentlemen:
We have acted as counsel for Ward Petroleum Corporation, an Oklahoma
corporation ("Ward"), and Ward Gas Services, Inc., an Oklahoma corporation
("Ward Services"), a wholly-owned subsidiary of Ward, in connection with the
acquisition of Ward Services and Comanche Gas Marketing Company, an Oklahoma
corporation ("Comanche"), by ONEOK Inc., a Delaware corporation ("ONEOK"), by
means of a merger (the "Merger") of Ward Services and Comanche with and into
ONEOK Gas Marketing Company, a Delaware corporation ("ONEOK Marketing"),
pursuant to that certain Agreement and Plan of Merger dated as of February __,
1995 (the "Agreement"), by and among ONEOK Marketing, ONEOK, Ward, Ward
Services, Comanche and James Christopher Walters, Jr. and LaVonne Diane
Walters, as Trustees of the James Christopher Walters, Jr. Trust dated August
3, 1983. This opinion is given pursuant to Section VIII.B.2.e of the
Agreement. Capitalized terms used herein without definition have the
respective meanings assigned thereto in the Agreement.
In connection with this opinion, we have examined the Agreement,
including all exhibits thereto. We have also examined originals or copies
identified to our satisfaction as being true copies of such corporate records
of Ward and Ward Services and such other documents as we consider necessary for
the purposes of this opinion. We have obtained certificates and affidavits
from
<PAGE> 74
February _, 1995
Page 2
officers of Ward and Ward Services and from public officials as to factual
matters, and have made such other investigations as we have deemed necessary as
a basis for our opinions set forth below. With respect to certain matters of
fact, we have relied upon the representations of Ward in the Agreement. We
have assumed the due authorization, execution and delivery of the Agreement by
all parties thereto other than Ward and Ward Services, the authenticity of all
documents submitted to us as original documents and the conformity to original
documents of all copies of documents submitted to us.
Based upon the foregoing and the other qualifications and limitations
set forth herein and upon such other matters of action and questions of law as
we have deemed relevant under the circumstances, we are of the opinion that:
1. Ward is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Oklahoma and has all requisite
corporate power to execute, deliver and perform the Agreement.
2. Ward Services is a corporation duly organized, validly existing
and in good standing under the laws of the State of Oklahoma and has all
requisite corporate power to execute, deliver and perform the Agreement. Ward
Services is duly qualified to do business as a foreign corporation and is in
good standing in the following States: Arkansas, Colorado, Illinois, Indiana,
Kansas, Louisiana, New Mexico, New York, Ohio, Pennsylvania, Texas, Wisconsin
and Wyoming.
3. The execution, delivery and performance of the Agreement have been
duly authorized by all requisite corporate action on the part of Ward and Ward
Services, respectively, and will not (i) violate the respective certificate of
incorporation, as amended, or the bylaws, as amended, of either Ward or Ward
Services, or, to our knowledge, any applicable order of any court or other
agency of government, or any agreement or other similar instrument to which
either Ward or Ward Services is a party or by which either such entity is
bound, or (ii) to our knowledge, be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
agreement or other similar instrument.
4. To our knowledge, neither Ward nor Ward Services is subject to any
order, judgment or decree, or the subject of any litigation, claim or
proceeding, pending or threatened, or any other restriction of any kind or
character which questions the validity of the Agreement or which would
otherwise affect the
<PAGE> 75
February _, 1995
Page 3
ability of either Ward or Ward Services to carry out the transactions
contemplated by the Agreement.
5. The Agreement has been duly authorized, executed and delivered by
Ward and Ward Services and constitutes a legal, valid and binding obligation of
each such entity, respectively, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally and by general equitable principles.
6. Other than filings required under the HSR Act and the filing of
Certificates of Merger with the Secretaries of State of the States of Delaware
and Oklahoma, no action, consent or approval of, or registration or filing
with, or any other action by any governmental agency, bureau, commission or
court is required in connection with the execution, delivery and performance of
the Agreement by Ward or Ward Services or consummation of the transactions
contemplated thereby.
7. To our knowledge, except as set forth on Disclosure Schedule II,
Item J, there are no actions, proceedings or investigations pending or
threatened, which, either in any case or in the aggregate, would, if adversely
determined, result in any adverse effect on the business, prospects,
conditions, affairs or operations of Ward Services or any of its properties or
assets.
8. The authorized capital stock of Ward Services is 50,000 shares of
common stock, par value $1.00 per share. To our knowledge, (a) there are
issued and outstanding 15,000 shares of such common stock, all of which are
issued to Ward; and (b) there are no outstanding rights, options, warrants,
conversion rights, or agreements for the purchase or acquisition from Ward
Services of any shares of its capital stock.
Our opinions expressed above are limited to the laws of the State of
Oklahoma and of the United States of America and we do not express any opinion
concerning the laws of any other state or jurisdiction.
These opinions are furnished solely for your benefit in connection
with consummation of the transactions contemplated under the Agreement and may
not be relied upon, furnished to or used, circulated, quoted or referred to by
any other person or entity or for any other purpose without our prior written
consent which may in each case be withheld in our sole discretion.
<PAGE> 76
February _, 1995
Page 4
As to matters where we refer to "our knowledge" of the existence of
any facts, situations or instruments, such knowledge is based on our actual
knowledge and on information obtained by us through public officials'
certificates, specific inquiry of officers and stockholders of Ward and Ward
Services, and examination of agreements, contracts and records supplied to us
by public officials and representatives of Ward and Ward Services. We have not
otherwise made, nor do we undertake for the purposes of the opinions set forth
herein to make, any other inquiry or investigation to ascertain the existence
of any other facts, situations or instruments. In the course of such inquiries
and examinations, we have not become aware of any facts which would lead us to
believe that further investigation would have made us unable to render any of
the opinions expressed above.
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated.
This opinion represents the judgment of this firm as to the legal
matters expressed herein; however, it is not a guarantee and should not be
construed as such.
The effective date of this opinion is the date first set forth above,
and we do not undertake to advise you of any matter brought to our attention
thereafter which would or may modify, in whole or in part, any or all of the
foregoing opinions.
Conner & Winters, A Professional Corporation
By:__________________________________________
Robert A. Curry
<PAGE> 77
TELEPHONE (918) 581-5500 TELEPHONE (405) 236-8911
FACSIMILE (918) 581-5599 FACSIMILE (405) 236-0011
February 23, 1995
ONEOK Inc.
ONEOK Gas Marketing Company
P. O. Box 871
Tulsa, Oklahoma 74102-0871
Gentlemen:
We have acted as counsel to Comanche Gas Marketing Company, an
Oklahoma corporation (the "Company") and its sole shareholder, James
Christopher Walters, Jr. and LaVonne Diane Walters (the "Trustees"), as
Trustees of the James Christopher Walters, Jr. Trust dated August 3, 1983 (the
"Trust"), in connection with the execution and delivery of the Agreement and
Plan of Merger (the "Agreement") dated as of February 3, 1995, by and among
ONEOK Gas Marketing Company, a Delaware corporation ("ONEOK Marketing"); ONEOK
Inc., a Delaware corporation and sole shareholder of ONEOK Marketing ("ONEOK");
Ward Gas Services, Inc., an Oklahoma corporation ("Ward Services"); Ward
Petroleum Corporation, an Oklahoma corporation and sole shareholder of Ward
Services ("Ward"); the Company and the Trustees. This opinion is being
delivered to you pursuant to Article VIII, Section B(3)(d) of the Agreement.
Unless otherwise specified, the terms used herein shall have the same meaning
as specified in the Agreement.
In our capacity as such counsel, we have examined originals or copies
identified to our satisfaction of the following documents: (1) the Agreement;
(2) the Certificate of Good Standing of the Company as certified by the
Oklahoma Secretary of State on January 26, 1995; and (3) a Certificate dated
today's date of the Trustees and the President of the Company (the "Officer's
Certificate"). In addition, we have examined originals or copies otherwise
identified to our satisfaction of such other records, documents and instruments
as, in our judgment, are necessary to render the opinions expressed below. As
to certain matters of fact, we have relied upon the Officer's Certificate and
the representations of the Trust in the Agreement.
In making our examination, we have assumed (1) the genuineness and
validity of all signatures on all documents by all parties
<PAGE> 78
February 23, 1995
Page 2
other than the Company or the Trustees, (2) the authenticity of all documents
submitted to us as originals and conformity to the originals of all documents
submitted to us as certified, conformed or photostatic copies and (3) the
capacity, power and due authorization to execute, deliver and perform all
documents referred to herein by the parties thereto (other than the Company
and/or the Trustees) and the validity and binding effect of those documents on
those persons (other than the Company and/or the Trustees).
Based upon and subject to the foregoing and subject to the exceptions,
qualifications and assumptions set forth herein, we are of the opinion that:
1. Comanche is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Oklahoma and has all
requisite corporate power to execute, deliver and perform the Agreement.
2. The execution, delivery and performance of the Agreement have
been duly authorized by all requisite corporate action on the part of Comanche
and will not (i) violate the certificate of incorporation, as amended, or the
bylaws, as amended, of Comanche, or, to our knowledge, any applicable order of
any court or other agency of government, or any agreement or other similar
instrument to which Comanche or the Trust is a party or by which either such
entity is bound, or (ii) to our knowledge, be in conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any such agreement or other similar instrument.
3. The authorized capital stock of the Company is 25,000 shares
of common stock, par value $1.00 per share. To our knowledge, (a) there are
issued and outstanding 1,250 shares of such common stock, all of which are
issued to the Trust; and (b) there are no outstanding rights, options,
warrants, conversion rights, or agreements for the purchase or acquisition from
the Company of any shares of its capital stock.
4. To our knowledge, neither Comanche nor the Trust is subject to
any order, judgment or decree, or the subject of any litigation, claim or
proceeding, pending or threatened or any other restriction of any kind or
character which questions the validity of the Agreement or which would
otherwise affect the ability of Comanche or the Trust to carry out the
transactions contemplated by the Agreement.
5. To our knowledge, there are no actions, proceedings or
investigations pending or threatened which, either in any case or in the
aggregate, would, if adversely determined, result in any
<PAGE> 79
February 23, 1995
Page 3
adverse effect on the business, prospects, conditions, affairs or operations of
the Company or the Trust or any of their respective properties or assets.
6. The Agreement has been duly authorized, executed and delivered
by Comanche and the Trust and constitutes a legal, valid and binding obligation
of each such entity, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights generally and by
general equitable principles.
7. Other than the filing of Certificates of Merger with the
Secretaries of State of the States of Delaware and Oklahoma, no action, consent
or approval of, or registration or filing with, or any other action by any
governmental agency, bureau, commission or court is required in connection with
the execution, delivery and performance of the Agreement by Comanche and the
Trust or consummation of the transactions contemplated thereby.
The opinions herein expressed are limited by and subject to the
following:
1. We are members of the bar of the State of Oklahoma only and we
therefore express no opinion with respect to any matter (including, without
limitation, conflict of laws and choice of law issues) which may be governed by
the laws of any jurisdiction other than the State of Oklahoma, and applicable
laws of the United States of America.
2. Our opinions as to enforceability are qualified by reference
to the effect upon the enforceability of the Agreement of bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting generally the
enforcement of creditors' rights or general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
3. We have made no independent investigation as to the accuracy
or completeness of any representations, warranties, data or other information,
written or oral, made or furnished by the Company or the Trustees to us. Any
opinions provided herein that are limited by the provision "to our knowledge,"
shall be deemed to express that we have not performed any investigation except
(a) a review of files and records of the Company or the Trust physically
retained at our offices, and (b) the receipt of appropriate certificates from
the appropriate authorized officers or representatives of the Company or the
Trustees relating to and verifying the facts which would support the basis for
our opinions.
<PAGE> 80
February 23, 1995
Page 4
4. You are advised that with respect to our opinion as to
enforceability, no opinion is expressed on questions of enforceability which
may arise under federal or state securities laws, anti-trust laws or ERISA.
5. The opinions expressed herein are as of the date hereof and we
undertake no obligation to update or supplement the opinions expressed herein,
whether or not resulting from events or actions occurring after the date
hereof.
6. The enforceability of the Agreement under Oklahoma's version
of the Uniform Fraudulent Transfer Act, other applicable fraudulent conveyance
laws, the rights and discharges of sureties and guarantors, and the
enforceability of waivers of rights and defenses, are included, without
limitation, within the limitations of creditors' rights which we except
generally from our opinion regarding enforceability.
This opinion represents the judgment of this firm as to the legal
matters expressed herein; however, it is not a guarantee and should not be
construed as such.
The opinions herein expressed are for the sole benefit of you and your
legal counsel in connection with the transactions contemplated by the
Agreement. This letter is provided to you solely for the purposes of complying
with your request, and, without our prior written consent, this letter may not
be quoted in whole or in part or otherwise referred to in any report or
document or furnished to any person or entity, other than ONEOK, ONEOK
Marketing or their legal counsel.
Very truly yours,
PRAY, WALKER, JACKMAN, WILLIAMSON & MARLAR
<PAGE> 1
Exhibit (3)(b)
BY-LAWS of ONEOK Inc.
(A Delaware Corporation)
ARTICLE I - OFFICES
Section 1.01 Principal Office. The principal office for the
transaction of the business of ONEOK Inc., (hereinafter called the Corporation)
shall be at 100 West Fifth Street, Tulsa, Oklahoma 74103. The Board of
Directors (hereinafter called the Board) is hereby granted full power and
authority to change said principal office from one location to another.
Section 1.02 Other Offices. The Corporation may also have an office
or offices at such other place or places, either within or without the State of
Delaware, as the Board may from time to time determine or as the business of
the Corporation may require.
ARTICLE II - MEETINGS OF SHAREHOLDERS
Section 2.01 Annual Meetings. Annual meetings of the shareholders of
the Corporation for the purpose of electing directors and for the transaction
of such other proper business as may come before such meetings may be held at
such time, date, and place as the Board shall determine by resolution.
Section 2.02 Special Meetings. Special meetings of the shareholders of
the Corporation may be called at any time by a majority of the whole Board.
Shareholders may not call special meetings. At any special meeting of the
shareholders, no business shall be transacted and no corporate action shall be
taken other than as stated in the notice of meeting.
Section 2.03 Place of Meetings. All meetings of the shareholders shall
be held at such places, within or without the State of Delaware, as may from
time to time be designated by the Board of Directors and specified in the
respective notices or waivers of notice thereof.
Section 2.04 Notice of Meetings. (a) Whenever shareholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date, and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called.
(b) Unless otherwise provided by law or the Certificate of
Incorporation, the written notice of any meeting shall be given not less than
ten (10) nor more than sixty (60) days before the date of the meeting to each
shareholder entitled to vote at such meeting. If mailed, notice is given when
deposited in the United States mail, postage prepaid, directed to the
shareholder at such shareholder's address as it appears on the records of the
Corporation. An affidavit of the secretary, an assistant secretary, or the
stock transfer agent of the Corporation that the notice has been given shall,
in the absence of fraud, be prima facie evidence of the facts stated therein.
<PAGE> 2
2
(c) Notice of any meeting of shareholders shall not be required to be
given to any shareholder who shall have waived such notice, and such notice
shall be deemed waived by any shareholder who shall attend such meeting in
person or by proxy except a shareholder who shall attend such meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
(d) Notice of any adjourned meeting of the shareholders need not be
given if the time and place thereof are announced at the meeting at which the
adjournment is taken except when the adjournment is for more than thirty (30)
days or, if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder
of record entitled to vote at the meeting.
Section 2.05 Quorum. Except when the vote of the holders of a larger
voting interest is required by law or by the Certificate of Incorporation, the
holders of record of a majority in voting interest of the shares of stock of
the Corporation entitled to be voted thereat, present in person or by proxy,
shall constitute a quorum for the transaction of business at any meeting of the
shareholders of the Corporation or any adjournment thereof. In the absence of
a quorum at any meeting or any adjournment thereof, a majority in voting
interest of the shareholders present in person or by proxy and entitled to vote
thereat or, in the absence therefrom of all the shareholders, any officer
entitled to preside at or to act as secretary of such meeting may adjourn such
meeting from time to time. At any such adjourned meeting at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally called.
Section 2.06 Voting. (a) Each shareholder shall, at each meeting of
the shareholders, be entitled to vote in person or by proxy each share of the
stock of the Corporation having voting rights on the matter in question and
which shall have been held by such shareholder and registered in such
shareholder's name on the books of the Corporation:
(i) on the date fixed pursuant to Section 2.07 of the By-laws as
the record date for the determination of shareholders entitled
to notice of and to vote at such meeting, or
(ii) if no such record date shall have been so fixed, then at the
close of business on the day next preceding the day on which
notice of the meeting shall be given or, if notice of the
meeting shall be waived, at the close of business on the day
next preceding the day on which meeting shall be held.
<PAGE> 3
3
(b) Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
Directors in such other corporation is held directly or indirectly by the
Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity
shall be entitled to vote such stock. Persons whose stock is pledged shall be
entitled to vote, unless the transfer by the pledgor on the books of the
Corporation shall have expressly empowered the pledgee to vote thereon, in
which case only the pledgee or the pledgee's proxy may represent such stock and
vote thereon. Stock having voting power standing of record in the names of two
or more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or with respect to
which two or more persons have the same fiduciary relationship, shall be voted
in accordance with the provisions of the General Corporation Law of the State
of Delaware.
(c) Any such voting rights may be exercised by the shareholder
entitled thereto in person or by the shareholder's proxy appointed by an
instrument in writing, subscribed by such shareholder, or by such shareholder's
attorney-in-fact thereunto authorized, and delivered to the secretary of the
meeting provided, however, that no proxy shall be voted or acted upon after
three years from its date unless said proxy shall provide for a longer period.
The attendance at any meeting by a shareholder who may theretofore have given a
proxy shall not have the effect of revoking the same unless the shareholder
shall in writing so notify the secretary of the meeting prior to the voting of
a proxy.
(d) At any meeting of the shareholders, all matters except as
otherwise provided in the Certificate of Incorporation, in the By-laws, or by
applicable law, shall be decided by the vote of a majority in the voting
interest of the shareholders present in person or by proxy and entitled to vote
thereat and thereon, a quorum being present. The vote at any meeting of the
shareholders on any question except election of Directors need not be by
written ballot unless so directed by the Chairman of the meeting. On a vote by
ballot, each ballot shall be signed by the shareholder voting or by the
shareholder's proxy, if there be such proxy, and it shall state the number of
shares voted.
Section 2.07 Fixing Date for Determination of Shareholders of Record.
In order that the Corporation may determine the shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment thereof, or to
express consent to corporate action in writing with respect to the Preferred
Shareholders, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights for
any other distribution or allotment of any rights, or entitled to exercise any
rights for any other change, conversion, or exchange of stock or for the
purpose of any other lawful action, the Board may fix in advance a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior
<PAGE> 4
4
to any other action unless otherwise provided by the Certificate of
Incorporation. If, in any case involving the determination of shareholders for
any purpose other than notice of or voting at a meeting of shareholders the
Board shall not fix a record date, the record date for determining shareholders
for such purpose shall be the close of business on the day on which the Board
shall adopt the resolution relating thereto. A determination of shareholders
entitled to notice of or to vote at a meeting of shareholders shall apply to
any adjournment of such meeting provided, however, that the Board may fix a new
record date for the adjourned meeting.
Section 2.08 List of Shareholders. The Secretary of the Corporation
shall cause to be prepared and made, at least ten (10) days before every
meeting of shareholders, a complete list of the shareholders entitled to vote
at the meeting, arranged in alphabetical order, and showing the address of each
shareholder and the number of shares registered in the name of each
shareholder. Such list shall be open to the examination of any shareholder for
any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at the place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the entire duration thereof and may be
inspected for any purpose of germane to the meeting by any shareholder who is
present.
Section 2.09 Chairman and Secretary of Meeting. Meetings of the
shareholders shall be presided over by the Chairman of the Board or, in the
absence of the Chairman of the Board, by the next senior officer of ONEOK Inc.,
present and acting, whose seniority has been established in a manner approved
by the Board of Directors. If none of the designated corporate officers are
present and acting, a chairman shall be chosen by the shareholders. The
Secretary of the Corporation or, in such officer's absence, an Assistant
Secretary shall act as Secretary of the Meeting, but if none are present the
Chairman of the meeting shall appoint a Secretary of the meeting.
Section 2.10 Inspectors. If at any meeting of the shareholders a vote
by written ballot shall be taken on any question, the Chairman of the meeting
may appoint a inspector or inspectors to act with respect to such vote. Each
inspector so appointed shall first subscribe an oath faithfully to execute the
duties of an inspector at such meeting with strict impartiality and according
to the best of such inspector's ability. Such inspectors shall decide upon the
qualification of the voters and shall report the number of shares represented
at the meeting and entitled to vote on such question, shall conduct and accept
the votes, and when the voting is completed shall ascertain and report the
number of shares voted respectively for and against the question. Reports of
the inspectors shall be in writing and subscribed and delivered by them to the
Secretary of the Corporation. The inspectors need not be shareholders of the
Corporation, and any officer of the Corporation may
<PAGE> 5
5
be an inspector on any question other than a vote for or against a proposal in
which such officer shall have a material interest.
Section 2.11 Memorandum of Action. Unless otherwise specifically
provided in the Certificate of Incorporation, any action required or permitted
to be taken by the shareholders of the Corporation may be effected by a vote of
the shareholders at a duly called annual meeting or special meeting called for
that purpose or may be effected by consent in writing of such shareholders.
Section 2.12 Conduct of Meetings. At any meeting of the shareholders,
only such business shall be conducted as shall have been properly brought
before the meeting. To be properly brought before a meeting of shareholders,
business must be (a) specified in the notice of meeting or any supplement
thereto given by or at the direction of the Board of Directors, (b) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (c) in the case of an annual meeting of shareholders, otherwise
properly brought before the meeting by a shareholder. For business to be
properly brought before an annual meeting of shareholders by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary
of the Corporation. To be timely a shareholder's notice must be delivered to
or received through the mail at the principal executive offices of the
Corporation not less than sixty (60) days nor more than ninety (90) days prior
to the date of the annual meeting; provided, however, that in the event that
less than seventy (70) days' notice or prior public disclosure of the date of
the meeting is given or made to shareholders, notice by the shareholder to be
timely must be so received not later than the close of business on the tenth
(1Oth) day following the earlier of the date on which such notice of the date
of the annual meeting was mailed or the date on which such public disclosure
was made.
A shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting, (b) the name
and address of the shareholder proposing such business as they appear on the
Corporation's books, (c) the class and number of shares of the Corporation
which are beneficially owned by the shareholder on the date of such
shareholder's notice and by any other shareholders known by such shareholder to
be supporting such proposal on the date of such shareholder's notice, and (d)
any material interest of the shareholder in such business. Notwithstanding
anything in the By-laws to the contrary, no business shall be conducted at a
meeting of shareholders except in accordance with the procedures set forth in
this Section 2.12. The presiding officer of a meeting of shareholders shall,
if the facts warrant, determine that business was not properly brought before
the meeting in accordance with the provisions of this Section 2.12 and, if the
presiding officer should so determine, the presiding officer shall so declare
to the meeting, and any such business not properly brought before the meeting
shall not be transacted.
<PAGE> 6
6
ARTICLE III - BOARD OF DIRECTORS
Section 3.01 General Powers. The property, business, and affairs of
the Corporation shall be managed by and under the direction of the Board.
Section 3.02 Number. The number of Directors of the Corporation, which
shall not be fewer than nine (9) nor more than thirty-one (31) persons shall be
fixed from time to time by resolution of the Board.
Section 3.03 Election of Directors. (a) The Directors shall be
divided into three classes (A, B, and C), as nearly equal in number as
possible. At each annual meeting of shareholders, Directors elected to succeed
those Directors whose terms expire shall be elected for a three (3)-year term
of office to expire at the third succeeding annual meeting of shareholders
after their election and shall continue to hold office until their respective
successors are elected and qualified.
(b) In the event of any increase in the number of Directors fixed by
the Board of Directors, the additional Directors shall be so classified that
all classes of Directors have as nearly equal number of Directors as may be
possible. No decrease in the number of directors constituting the Board shall
shorten the term of any incumbent director. In the event of any decrease in
the number of Directors of the Corporation, all classes of Directors shall be
decreased equally as nearly as may be possible. Notwithstanding the foregoing,
the terms of this paragraph shall not apply to the extent inconsistent with the
terms of Subparagraphs (B) through (F) of Paragraph 1 of Division D of Article
FOURTH of the Certificate of Incorporation and shall not adversely affect the
rights of holders of Preferred Stock.
(c) No person shall be elected or reelected to the Board to fill a
vacancy on the Board after such person's 70th birthday.
(d) Only persons nominated in accordance with the procedures set forth
in this Section shall be eligible for election as Directors. Subject to the
rights of holders of any class or series of Preferred or Preference Stock of
this Corporation, nominations of persons for election to the Board may be made
at a meeting of shareholders by or at the direction of the Board or a Committee
thereof or by any shareholder of the Corporation entitled to vote for the
election of Directors at such meeting who complies with the notice procedures
set forth in this subsection (d). Such nominations, other than those made by
or at the direction of the Board or a Committee thereof, shall be made by a
shareholder pursuant to timely notice in writing to the Secretary of the
Corporation. To be timely, a shareholder's notice must be delivered to or
received through the mail at the principal executive offices of the Corporation
not less than sixty (60) days nor more than ninety (90) days prior to the date
of a meeting provided, however, that if fewer than seventy (70) days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so
<PAGE> 7
7
delivered or received not later than the close of business on the tenth (10th)
day following the earlier of the day on which such notice of the date of such
meeting was mailed or the day on which such public disclosure was made.
A shareholder's notice to the Secretary shall set forth:
(i) as to each person whom the shareholder proposes to
nominate for election as a Director: (a) the name, age,
business address, and residence address of such
nominee, (b) the principal occupation or employment of
such nominee, (c) the class and number of shares of the
Corporation which are beneficially owned by such
nominee on the date of such shareholder's notice, and
(d) any other information relating to such nominee that
is required to be disclosed in solicitations of proxies
for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended including
without limitation such nominee's written consent to
being named in the proxy statement as a nominee and to
serving as a Director if elected; and
(ii) as to the shareholder giving the notice: (a) the name
and address, as they appear on the Corporation's books,
of such shareholder and any other shareholders known by
such shareholder to be supporting such nominees, and
(b) the class and number of shares of the Corporation
which are beneficially owned by such shareholder on the
date of such shareholder's notice and by any other
shareholders known by such shareholder to be supporting
such nominees on the date of such shareholder's notice.
No person shall be eligible for nomination as a
Director of the Corporation unless nominated in
accordance with the procedures set forth in this
subsection (d). The presiding officer of the meeting
shall, if the facts warrant, determine and declare to
the meeting that a nomination was not made in
accordance with the procedures prescribed by the
By-laws; and if the presiding officer should so
determine, the presiding officer shall so declare to
the meeting and the defective nomination shall be
disregarded.
Section 3.04 Resignations and Chairman of the Board Emeritus. (a) Any
Director of the Corporation may resign at any time by giving written notice to
the Board or to the Secretary of the Corporation. Any such resignation shall
take effect immediately upon its receipt and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
<PAGE> 8
8
(b) The Board of Directors of the Corporation may from time to time
designate a Chairman of the Board Emeritus in recognition of a person's long
and faithful service to the Corporation and its Board of Directors. The
Chairman of the Board Emeritus shall be an honorary officer of the Board and
shall serve at the pleasure of the Board of Directors.
Section 3.05 Vacancies and Removal. (a) Subject to the rights of the
holders of any series of Preferred or Preference Stock then outstanding, newly
created directorships resulting from any increase in the authorized number of
Directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office, or other cause
shall be filled by the affirmative vote of a majority of the Directors then in
office, though less than a quorum, or by the sole remaining Director, or by the
shareholders at their next annual meeting, or at any special meeting of
shareholders called for that purpose. Each Director so chosen shall hold
office until the expiration of such term of the Director, if any, whom such
person has been chosen to succeed or, if none, until the expiration of the term
of the class assigned to the additional directorship to which such person has
been elected or until such person's earlier death, resignation, retirement, or
removal. No decrease in the number of Directors constituting the Board shall
shorten the term of any incumbent Director.
(b) Subject to the rights of the holders of any series of Preferred or
Preference Stock then outstanding, any Director or the entire Board may be
removed from office at any time but only for cause and only by the affirmative
vote of the holders of at least eighty percent (80%) of the voting interest of
all outstanding voting stock.
Section 3.06 Place of Meeting, etc. The Board may hold any of its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time by resolution designate or as shall be designated
by the person or persons calling the meeting. Directors may participate in any
regular or special meeting of the Board or any meeting of a committee
designated by such Board by means of telephone conference or similar
communications pursuant to which all persons participating in such meeting can
hear each other, and such participation shall constitute presence in person at
such meeting.
Section 3.07 First Meeting. The Board shall meet as soon as
practicable after each annual election of Directors and notice of such first
meeting shall not be required.
Section 3.08 Regular Meetings. Regular meetings of the Board may be
held at such times as the Board shall from time to time by resolution
determine. If any day fixed for a meeting shall be a legal holiday at the
place where the meeting is to be held, then the meeting shall be held at the
same hour and place on the next succeeding business day not a legal holiday.
Except as provided by law, Notice of regular meetings need not be given.
<PAGE> 9
9
Section 3.09 Special Meetings. (a) Special meetings of the Board may
be called at any time by the Chairman of the Board, or the President, or by any
three Directors to be held at the principal office of the Corporation, or at
such other place or places within or without the State of Delaware as the
person or persons calling the meeting may designate. Unless otherwise
indicated in the notice thereof, any and all business, other than approval of
contracts with another corporation or party (or subsidiary thereof) owning a
majority of the stock of the Corporation and actions taken with respect to
salaries, compensation, and other payments to be paid to or contracts made with
a Director or executive officer, may be transacted at any special meeting. At
any meeting at which all Directors shall be present, even though without any
notice, any business may be transacted.
(b) Notice of all special meetings of the Board shall be given to each
Director by the Secretary or by the person or persons calling the meeting by
mailing a copy thereof at least four days before the meeting. If the Chairman,
or the President, or three of the Directors determine that a special meeting of
the Board on short notice is necessary, then notice may be given by the
Secretary or by the person or persons calling the meeting by telephone or by
facsimile (FAX) transmission of the notice of the meeting not less than four
hours in advance of the time when a meeting shall be held. Such notice may be
waived by any Director; and any meeting shall be a legal meeting without notice
having been given if all the Directors shall be present thereat or if those not
present shall, either before or after the meeting, sign a written waiver of
notice of or a consent to such meeting or shall, after the meeting, sign the
approval of the minutes thereof. All such waivers, consents, or approvals
shall be filed with the corporate records or be made a part of the minutes of
the meeting.
Section 3.10 Quorum and Manner of Acting. Except as otherwise
provided in the Certificate of Incorporation, the By-laws, or by applicable
law, the presence of five (5) or one-third (1/3), whichever is greater, of the
authorized number of Directors shall be required to constitute a quorum for the
transaction of business at any meeting of the Board, and all matters shall be
decided at any such meeting, a quorum being present, by the affirmative votes
of a majority of the Directors present. In the absence of a quorum, a majority
of Directors present at any meeting may adjourn the same from time to time
until a quorum shall be present. Notice of any adjourned meeting need not be
given. The Directors shall act only as a Board, and the individual Directors
shall have no power as such.
Section 3.11 Action by Consent. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of the
Board or such committee, as the case may be, and such written consent is filed
with the minutes of proceedings of the Board or such committee.
<PAGE> 10
10
Section 3.12 Compensation. All salaries and compensation paid by the
Corporation to its Directors shall be fixed from time to time by the Board of
Directors at a regular meeting of the Board to be held as provided by the By-
laws; and any payment of any kind to any Director of the Corporation or any
contract made with such Director or executive officer must be approved by a
majority of the whole Board of Directors at a regular meeting of the Board
before such payment is made or contract executed.
Section 3.13 Committees. (a) The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee
to consist of two or more of the Directors of the Corporation. Any such
committee, to the extent provided in the resolution of the Board, shall have
and may exercise all powers and authority of the Board in the management of the
business and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such
committee shall have any power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the shareholders the sale, lease, or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
shareholders a dissolution of the Corporation or a revocation of the
dissolution, or amending the By-laws of the Corporation; and unless the
resolution of the Board expressly so provides, no such committee shall have the
power or authority to declare a dividend or to authorize the issuance of stock.
Any such committee shall keep written minutes of its meetings and report the
same to the Board at the next regular meeting of the Board.
(b) Except as may otherwise be ordered by the Board of Directors, the
Chairman of the Board shall recommend, for approval by the Board, the members
of all special or other committees of the Board. The Chairman of the Board
shall be an ex-officio member of and shall preside as chairman of all meetings
of the Executive Committee.
(c) In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not they constitute a quorum, may unanimously appoint
another member of the Board to act at a meeting in the place of any such absent
or disqualified member.
Section 3.14 Officers of the Board. The Chairman of the Board, or in
the absence of the Chairman of the Board, the President, or in the absence of
the President, any other officer of the Corporation who is a Director, shall
preside at all meetings of the Board. In the absence of any such officers, a
temporary chairman elected by the Directors present at the meeting shall
preside.
<PAGE> 11
11
Section 3.15 Interested Directors. No Director shall vote on a
question in which such Director is interested, except the election of the
Chairman of the Board of Directors, a President, or other officer or members of
any Committee of the Board. In the absence of fraud, no contract or other
transaction of the Corporation shall be affected or invalidated in any way by
the fact that any of the Directors of the Corporation are in any way interested
in or connected with any other party to such contract or transaction, or are
themselves parties to such contract or transaction, provided that at the
meeting such transaction be considered as authorized if (a) such interest or
connection shall be fully disclosed or otherwise known to the Board of
Directors, (b) that the contract or transaction is fair to the Corporation, (c)
there shall be present a quorum of Directors not so interested or connected and
such contract or transaction shall be approved by a majority of such quorum,
and (d) no such interested Director shall vote on any such contract or
transaction. The mere ownership of stock in another corporation by a Director
shall not disqualify such Director to vote on any transaction between the
Corporation and such other corporation, provided the director is in compliance
with the other provisions of this Section.
(b) No contract or other transaction between the Corporation and any
other corporation shall be affected by the fact that any of the Directors of
the Corporation are interested in or are directors or officers of such other
corporation if such contract or transaction be made, authorized, or confirmed
by the Board in the manner provided in the preceding paragraph, or by any
committee of the Corporation having the requisite authority by vote of a
majority of the members of such committee not so interested; and any Director
individually may be a party to or may be interested in any contract or
transaction of the Corporation provided that such contract or transaction shall
be approved or ratified by the Board or by any Committee of the Corporation
having the requisite authority in the manner herein set forth.
(c) The Board of Directors, in its discretion, may submit any contract
or act of the Corporation or of the Board for approval or ratification at any
annual meeting of the shareholders or at any special meeting of shareholders,
the notice of which shall state that it is called for the purpose, or in part
for the purpose of considering any such act or contract; and any such contract
or act that shall be approved or be ratified by the vote of the holders of a
majority in voting interest of the shares of stock of the Corporation entitled
to vote thereat shall be as valid and as binding upon the Corporation and upon
all the shareholders as though it had been approved and ratified by every
shareholder of the Corporation.
(d) Any Director of the Corporation may vote upon any contract or
other transaction between the Corporation and any subsidiary corporation
without regard to the fact that such person is also a Director of such
subsidiary corporation.
<PAGE> 12
12
(e) No contract or agreement between the Corporation and any other
corporation or party that owns a majority of the capital stock of the
Corporation or any subsidiary of any such other corporation shall be made or
entered into without the affirmative vote of a majority of the whole Board at a
regular meeting of the Board.
(f) Notwithstanding anything to the contrary in the foregoing
paragraphs of this Section, in the case of contracts, transactions, and acts of
the Corporation, of the Board of Directors, or of committees thereof that
require shareholder and/or Director approval under any provision of the
Certificate of Incorporation or of applicable law by a higher proportion of the
voting power of the outstanding voting stock than a majority of a quorum of the
shareholders or approval by the Continuing Directors as defined and required by
the Certificate of Incorporation, ratification by the shareholders and/or
approval by the Continuing Directors of such contracts, transactions, and acts
shall require the affirmative vote of such higher proportion of such voting
power and/or approval by the Continuing Directors, and any contract,
transaction, act, or agreement referred to in the foregoing paragraphs shall be
subject to any such applicable provisions of the Certificate of Incorporation
or of applicable law.
ARTICLE IV - OFFICERS
Section 4.01 Officers. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents, a Secretary, a
Treasurer, such other officers as may be elected from time to time by the
Board, and such other officers as may be appointed by the Board pursuant to
Section 4.03 of the By-laws. One of the officers of the Corporation shall be
designated by the Board of Directors as the Chief Executive Officer of the
Corporation. Officers shall have such powers and duties as are permitted or
required by law and as may be specified by or in accordance with resolutions of
the Board. In the absence of any contrary determination by the Board, the
person designated as the Chief Executive Officer shall, subject to the power
and authority of the Board, have general supervision, direction, and control of
all the officers (except the Chairman of the Board), the employees, the
business, and the affairs of the Corporation and shall have the right to remove
any officer except the Chairman of the Board. One person may hold two or more
offices, except that the Secretary may not also hold the office of President.
Except where otherwise expressly provided in a written contract duly authorized
by the Board, all officers, agents, and employees shall be subject to removal
at any time by the affirmative vote of a majority of the Directors; and all
officers, agents, and employees other than officers elected or appointed by the
Board shall also be subject to removal at any time by the officer supervising
them.
<PAGE> 13
13
Section 4.02 Election. The officers of the Corporation, except such
officers as may be appointed pursuant to Section 4.03 or Section 4.05 of the
By-laws, shall be elected annually by the Board, and each person shall hold
office until he or she shall resign or be removed or otherwise disqualified to
serve, or until such person's successor shall be elected and qualified.
Section 4.03 Subordinate Officers, etc. The Board may appoint such
other officers as the business of the Corporation may require, each of whom
shall have such authority and perform such duties as are provided in the
By-laws or as the Board may from time to time specify, and shall hold office
until such person shall resign or shall be removed or otherwise disqualified to
serve.
Section 4.04 Removal and Resignation. (a) Any officer may be removed,
either with or without cause, by a majority of the Directors at the time in
office, at any regular or special meeting of the Board or, in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board.
(b) Any officer may resign at any time by giving written notice to the
Board, the Chairman of the Board, the President, or the Secretary of the
Corporation. Any such resignation shall take effect at the date of the receipt
of such notice or at any later time specified therein; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 4.05 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause shall be filled in
the manner prescribed in the By-laws for the regular appointments to such
office.
Section 4.06 Voting Stock in Other Corporations. Unless otherwise
ordered by the Board, the person designated as the Chief Executive Officer, or
in such officer's absence, or with such officer's consent, the next ranking
officer of the Corporation, shall have full power and authority on behalf of
the Corporation to attend and to act and to vote, or in the name of the
Corporation to execute proxies to vote, at any meetings of shareholders of any
corporation in which the Corporation may hold stock, and at any such meetings
shall possess and may exercise, in person or by proxy, any and all rights,
powers, and privileges incident to the ownership of such stock. The Board may,
by resolution, from time to time, confer like powers upon any other person or
persons.
Section 4.07 Compensation of Executive Officers. All salaries and
compensation paid by the Corporation to executive officers shall be fixed from
time to time by the Board of Directors at a regular meeting of the Board to be
held as provided by the By-laws; and any payment of any kind to any executive
<PAGE> 14
14
officer of the Corporation or any contract made with such executive officer
must be approved by a majority of the whole Board of Directors at a regular
meeting of the Board before such payment is made or contract executed.
ARTICLE V - OPERATING DIVISIONS OF THE CORPORATION
Section 5.01 Division Boards. The Board may appoint individuals who
may but need not be Directors, officers, or employees of the Corporation to
serve as members of a Division Board of Directors (the Division Board) of one
or more Divisions of the Corporation and may fix fees or compensation for
attendance at meetings of any such Division Board. The members of any such
Division Board may adopt and from time to time may amend By-laws or other rules
and regulations for the conduct of the business and affairs of the Division and
shall keep minutes of their meetings. The term of office of any member of a
Division Board shall be at the pleasure of the Board of Directors of the
Corporation and shall expire as provided for in the By-laws of the Division.
The function of any such Division Board shall be to manage and control the
ordinary business and affairs of the Division and to advise the Board of
Directors of the Corporation with respect to the affairs of their respective
Divisions.
Section 5.02 Titles. The Division Board may, from time to time, confer
on the employees of their Division or discontinue the title of President,
Executive Vice President, Senior Vice President, Vice President, and any other
titles deemed appropriate. The designation of any such official titles for
employees assigned to the Divisions of the Corporation shall not be permitted
to conflict in any way with any executive or administrative authority
established from time to time by the Corporation. Any employee so designated
as an officer of a Division shall have authority, responsibilities, and duties
with respect to such employee's Division, corresponding to those normally
vested in the comparable officer of the Corporation, subject to such
limitations as may be imposed by the Board of Directors of the Corporation.
ARTICLE VI - CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
Section 6.01 Execution of Contracts. The Board, except as otherwise
provided in the By-laws, may authorize any officer, officers, agent, or agents
to enter into any contract or execute any instrument in the name and on behalf
of the Corporation; and such authority may be general or confined to specific
instances and, unless so authorized by the Board or by the By-laws, no officer,
agent, or employee shall have any power or authority to bind the Corporation by
any contract or engagement, or to pledge its credit, or to render it liable for
any purpose or in any amount.
Section 6.02 Checks, Drafts, Etc. All checks, drafts, or other orders
for payment of money, notes, or other evidence of indebtedness issued in the
name of or payable to the Corporation shall be signed or endorsed by such
<PAGE> 15
15
person or persons and in such manner as from time to time shall be determined
by resolution of the Board. Each such person shall give such bond, if any, as
the Board may require.
Section 6.03 Deposit. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies, or other depositories as the Board may select
or as may be selected by any officer or officers, assistant or assistants,
agent or agents, or attorney or attorneys-in-fact of the Corporation to whom
such power shall have been delegated by the Board. For the purpose of deposit
and for the purpose of collection for the account of the Corporation, the
Chairman of the Board, the President, or the Treasurer (or any other officer or
officers, assistant or assistants, agent or agents, or attorney or
attorneys-in-fact of the Corporation who shall from time to time be determined
by the Board) may endorse, assign, and deliver checks, drafts, and other orders
for the payment of money which are payable to the order of the Corporation.
Section 6.04 General and Special Bank Accounts. (a) The Board may
from time to time authorize the opening and keeping of general and special bank
accounts with such banks, trust companies, or other depositories as the Board
may select or as may be selected by any officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys-in-fact of the
Corporation to whom such power shall have been delegated by the Board. The
Board may make such special rules and regulations with respect to such bank
accounts, not inconsistent with the provisions of the By-laws, as it may deem
expedient.
(b) In addition to such bank accounts as may be authorized in the
usual manner by resolution of the Board, the Treasurer of the Corporation with
the approval of any officer of the Corporation designated as its Chief
Executive Officer may authorize such bank accounts to be opened or maintained
in the name and on behalf of the Corporation as the Treasurer may deem
necessary or appropriate, payments from such bank accounts to be made upon and
according to the checks of the Corporation which may be signed jointly or
singly by either the manual or facsimile signature or signatures of such
officer or officers of the Corporation as shall be specified in the written
instructions of the Treasurer of the Corporation with the approval of the Chief
Executive Officer.
ARTICLE VII - SHARES AND THEIR TRANSFER
Section 7.01 Certificates for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by such shareholder. The
certificates representing shares of such stock shall be numbered in the order
in which they shall be issued and shall be signed in the name of the
Corporation by the Chairman of the Board and by the Secretary. Any or all of
<PAGE> 16
16
the signatures on the certificates may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon any such certificate shall thereafter have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, such
certificate may nevertheless be issued by the Corporation with the same effect
as though the person who signed such certificate, or whose facsimile signature
shall have been placed thereupon, were such officer, transfer agent, or
registrar at the date of issue. A record shall be kept of the respective names
of the persons, firms, or corporations owning the stock represented by such
certificates, the number and class of shares represented by such certificates
respectively and the respective dates thereof and, in the case of cancellation,
the respective dates of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be canceled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so canceled, except in cases provided
for in Section 7.04 of the By-laws.
Section 7.02 Transfers of Stock. Transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation by the
registered holder thereof or by the registered holder's attorney-in-fact
thereunto authorized by power of attorney duly executed and filed with the
stock transfer agent as provided in Section 7.03 of the By-laws, and upon
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon. The person in whose name shares of stock
stand on the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation. Whenever any transfer of shares shall be
made for collateral security, and not absolutely, such fact shall be stated
expressly in the entry of transfer if, when the certificate or certificates
shall be presented to the stock transfer agent for transfer, both the transfer
or and the transferee request the stock transfer agent to do so.
Section 7.03 Regulations. The Board may make such rules and
regulations as it may deem expedient not inconsistent with the By-laws
concerning the issue, transfer, and registration of certificates for shares of
the stock of the Corporation. It may appoint or authorize any officer or
officers to appoint one or more stock transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.
Section 7.04 Lost, Stolen, Destroyed, and Mutilated Certificates. In
any case of loss, theft, destruction, or mutilation of any certificate of
stock, another certificate may be issued in its place upon proof of such loss,
theft, destruction, or mutilation and upon the giving of a bond of indemnity to
the Corporation in such form and in such sum as the stock transfer agent may
direct provided, however, that a new certificate may be issued without
requiring any bond when, in the judgment of the Secretary or Assistant
Secretary of the Corporation, it is proper to do so.
<PAGE> 17
17
ARTICLE VIII - INDEMNIFICATION
Section 8.01 Actions, Suits, or Proceedings Other Than by or in the
Right of the Corporation. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the Corporation)
by reason of the fact that the person is or was a Director, officer, employee,
or agent of the Corporation, or is or was serving at the request of the
Corporation as a Director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise or as a member of any
committee or similar body, against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the Corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe the person's conduct was unlawful. The termination of any action,
suit, or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which the
person reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that the
person had reasonable cause to believe that the person's conduct was unlawful.
Section 8.02 Actions, Suits, or Proceedings by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that the person is or was a Director, officer,
employee, or agent of the Corporation, or is or was serving at the request of
the Corporation as a Director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by the
person in connection with the defense or settlement of such action or suit if
the person acted in good faith in a manner the person reasonably believed to be
in or not opposed to the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless, and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application, that despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
<PAGE> 18
18
Section 8.03 Indemnity if Successful. Notwithstanding the other
provisions of this Article, to the extent that a Director, officer, employee,
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit, or proceeding referred to in Sections 8.01 and
8.02, or in defense of any claim, issue, or matter therein, the person shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
Section 8.04 Determination of Right of Indemnification. Any
indemnification under Section 8.01 or Section 8.02 of the By-laws unless
ordered by a court shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the Director,
officer, employee, or agent is proper in the circumstances because such person
has met the applicable standard of conduct set forth in Sections 8.01 and 8.02
of the By-laws. Such determination shall be made (i) by the Board by a
majority vote of a quorum consisting of Directors who were not parties to such
action, suit, or proceeding, or (ii) if such a quorum is not obtainable or even
if obtainable a quorum of disinterested Directors so directs, by independent
legal counsel in a written opinion, or (iii) by the shareholders.
Section 8.05 Advance of Expenses. Expenses incurred by an officer or
Director in defending a civil or criminal action, suit, or proceeding may be
paid by the Corporation in advance of the final disposition of such action,
suit, or proceeding upon receipt of an undertaking by or on behalf of such
Director or officer to repay such amount if it shall ultimately be determined
that the person is not entitled to be indemnified by the Corporation as
authorized in this Article.
Section 8.06 Provisions of By-laws not Exclusive. The indemnification
and advancement of expenses provided by or granted pursuant to the other
sections of this Article shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any by-law, agreement, vote of shareholders or disinterested Directors or
otherwise, both as to such person's official capacity and as to action in
another capacity while holding such office.
Section 8.07 Insurance. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a Director, officer, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a Director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, or as a member of any committee or similar body against any
liability asserted against the person and incurred by the person in any such
capacity, or arising out of the person's status as such, whether or not the
Corporation would have the power to indemnify the person against such liability
under the provisions of this Article.
<PAGE> 19
19
Section 8.08 Constituent Corporations. For the purposes of this
Article, references to "the Corporation" include in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
Directors, officers, and employees, or agents, so that any person who is or was
a Director, officer, employee, or agent of such constituent corporation or is
or was serving at the request of such constituent corporation as a Director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, or as a member of any committee or similar body
shall stand in the same position under the provisions of this Article with
respect to the resulting or surviving corporation as such person would have
with respect to such constituent corporation if its existence had continued.
Section 8.09 Certain Definitions. For purposes of this Section,
references to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a Director, officer, employee,
or agent of the Corporation which imposes duties on, or involves services by,
such Director, officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted in good faith
and in a manner the person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Section.
Section 8.10 Continuation of Rights Provided by this Article. The
indemnification and advancement of expenses provided by or granted pursuant to
this Article shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a Director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
Section 8.11 Miscellaneous. In furtherance and not in limitation of
the foregoing provisions of this Article VIII, the Corporation shall indemnify
the persons referred to hereinabove to the fullest extent permitted by Delaware
General Corporate Law, as the same may be amended from time to time.
ARTICLE IX - MISCELLANEOUS
Section 9.01 Seal. The Board shall provide a corporate seal, which
shall be in the form of a circle and shall bear the name of the Corporation and
words and figures showing that the Corporation was incorporated in the State of
Delaware and the year of incorporation.
<PAGE> 20
20
Section 9.02 Waiver of Notices. Whenever notice is required to be
given by the By-laws or the Certificate of Incorporation, or by law, the person
entitled to such notice may waive such notice in writing, either before or
after the time stated therein, and such waiver shall be deemed equivalent to
notice.
Section 9.03 Fiscal Year. The fiscal year of the Corporation shall end
on the 31st day of August of each year.
Section 9.04 Inspection of Corporate Books and Records. The Board
from time to time shall determine whether, and to what extent, and at what
times and places, and under what conditions and regulations the accounts and
books of the Corporation, or any of them, shall be open to the inspection of
the shareholders, and no shareholder shall have any right to inspect any
account, book, or documents of the Corporation except as conferred by law or as
authorized by resolution of the Board.
Section 9.05 Certificate of Incorporation. As used herein, the term
"Certificate of Incorporation" shall mean the Certificate of Incorporation of
the Corporation, as currently restated, corrected, or amended.
Section 9.06 Amendments. The By-laws, or any of them, may be
rescinded, altered, amended, or repealed, and new By-laws may be made by the
Board, by vote of a majority of the number of Directors then in office as
Directors acting at any meeting of the Board or, by the vote of the holders of
not less than 80% of the total voting power of all outstanding shares of voting
stock of the Corporation, at any annual meeting of shareholders, without
previous notice, or at any special meeting of shareholders, provided that
notice of such proposed amendment, modification, repeal, or adoption is given
in the notice of special meeting. Any By-laws made or altered by the
shareholders may be altered or repealed by the Board or may be altered or
repealed by the shareholders.
The End
<PAGE> 1
Exhibit (5)
[ARRINGTON KIHLE GABERINO & DUNN LETTERHEAD]
ONEOK Inc.
100 West Fifth Street
Tulsa, OK 74103
Re: Form S-3, Registration Statement Under the
Securities Act of 1933, relating to certain
Debt Securities
Gentlemen:
We are retained as regular counsel for ONEOK Inc., a Delaware
corporation (hereinafter called the "Company") which has filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, a Registration Statement on Form S-3 (including a Prospectus) relating
to the registration of three hundred, thirty thousand (330,000) presently
outstanding shares of the common stock of the Company (the "Common Stock") held
by certain stockholders of the Company ("Selling Stockholders"), as more fully
described in the Prospectus.
We have examined (a) the above-mentioned Registration Statement which
is being filed with the Securities and Exchange Commission; (b) the Third
Restated Certificate of Incorporation and the By-laws, as amended, of the
Company; (c) the corporation actions taken by the Board of Directors of the
Company, and other documents as we have considered relevant to the matters
covered by this opinion.
In connection with the foregoing, we wish to advise you as follows:
1. The Company is a corporation validly organized and existing
under the laws of the State of Delaware and is duly qualified to do business as
a foreign corporation in the State of Oklahoma.
<PAGE> 2
ONEOK Inc.
April 12, 1995
Page 2
2. The filing of the above-mentioned Registration Statement has
been duly authorized by the proper corporate action on the part of the Company.
3. The Common Stock when sold by the Selling Shareholders will be
legally issued, fully paid and non- assessable in the hands of the owners
thereof.
We hereby consent to:
1. Being named in the above Form S-3 Registration Statement and
the Prospectus which is being made a part thereof, and in any amendments
thereto, under the caption "Experts," and "Legality," as counsel for the
Company, passing upon legal matters in connection with the Common Stock and
having reviewed the matters of law and legal conclusions under "Description of
Common Stock" contained in said Prospectus which are included therein under our
authority as experts.
2. The filing of this opinion as an exhibit to the
above-mentioned Form S-3 Registration Statement.
Very truly yours,
Arrington Kihle Gaberino & Dunn, P.C.
By DONALD A. KIHLE
--------------------------------------
Donald A. Kihle, President
<PAGE> 1
Exhibit (23)(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
ONEOK Inc.:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus. Our
report dated October 14, 1994 refers to a change in the method of accounting
for certain postemployment and postretirement benefit obligations.
KPMG PEAT MARWICK LLP
Tulsa, Oklahoma
March 30, 1995
