UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 11, 1999
GRANT GEOPHYSICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-48799* 76-0548468
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
16850 Park Row, Houston, Texas 77084
(Address of principal executive offices) (Zip Code)
(281) 398-9503
(Registrant's telephone number, including area code)
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* The Commission file number refers to a Form S-4 registration statement
filed by the registrant under the Securities Act of 1933, which became
effective May 14, 1998.
ITEM 5. OTHER EVENTS.
Effective August 11, 1999, holders of greater than a majority of the
outstanding common stock and voting power of Grant Geophysical, Inc. (the
"Company") approved, by written consent, proposals to (i) amend the
Company's Certificate of Incorporation to increase the authorized capital
of the Company to 60,000,000 shares, comprised of 50,000,000 shares of
common stock, $0.001 par value per share, and 10,000,000 shares of
preferred stock, $0.001 par value per share; and (ii) amend the Company's
Bylaws to provide new procedures relating to shareholder proposals,
shareholder notification, and amendments of the Bylaws. Reference is made
hereby to the Company's Amended and Restated Certificate of Incorporation
and Amended and Restated Bylaws, which are included as exhibits to this
Form 8-K.
Effective August 11, 1999, holders of greater than a majority of the
outstanding common stock and voting power of the Company acted, by written
consent, to reelect Donald W. Wilson, Richard H. Ward, J. Kelly Elliott,
Donald G. Russell, Jonathan D. Pollock, W. Richard Anderson, and James R.
Brock as directors of the Company.
On August 13, 1999, the board of directors of the Company created a
series of 120,000 shares of preferred stock designated as "8% Exchangeable
Preferred Stock." The shares of 8% Exchangeable Preferred Stock have a
liquidation preference of $100 per share. The 8% Exchangeable Preferred
Stock is entitled to receive cumulative dividends at the rate of 8% per
annum of the liquidation preference. The dividends are payable quarterly
on January 1, April 1, July 1, and October 1 in cash or, at the Company's
option, in shares of 8% Exchangeable Preferred Stock. The shares of 8%
Exchangeable Preferred Stock may be exchanged, at the option of the holder,
into such new securities as the Company may from time to time propose to
sell or issue.
On August 13, 1999, the Company sold 63,000 shares of 8% Exchangeable
Preferred Stock to Elliott Associates, L.P. at a price of $100 per share.
The aggregate proceeds from the sale of the shares was $6,300,000, and will
be used to provide additional working capital for the Company.
The above descriptions of selected provisions of the Amended and
Restated Certificate of Incorporation of the Company, the Amended and
Restated Bylaws of the Company, and the Certificate of Designations of 8%
Exchangeable Preferred Stock of the Company are not intended to be complete
and are qualified in their entirety by reference to the detailed provisions
of each of those documents, which are attached hereto as Exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
3.1 Amended and Restated Certificate of Incorporation of the
Company.
3.2 Amended and Restated Bylaws of the Company.
4.1 Certificate of Designations of 8% Exchangeable Preferred
Stock of the Company.
10.1 Form of Indemnity Agreement between the Company and its
directors.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
GRANT GEOPHYSICAL, INC.
By: /S/ Michael P. Keirnan
------------------------------
Michael P. Keirnan
Chief Financial Officer
Date: August 19, 1999
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GRANT GEOPHYSICAL, INC.
Grant Geophysical, Inc. (the "Company"), a corporation organized and
existing under the laws of the State of Delaware, does hereby certify as
follows:
1. The Company's original certificate of incorporation was filed with the
Secretary of State of Delaware on September 18, 1997, amended and
restated on December 24, 1997, and amended and restated on June 5,
1998. The Company was originally organized under the name "Grant
Acquisition Corporation," and the Company's name was changed to "Grant
Geophysical, Inc." by the amendment dated December 24, 1997.
2. Pursuant to Section 242 of the Delaware General Corporation Law (the
"DGCL"), the amendments to the Company's Certificate of Incorporation
contained herein have been duly adopted by resolution of the Board of
Directors of the Company and approved by written consent of the
holders of a majority of the outstanding common stock and voting power
of the Company.
3. Pursuant to Section 245 of the DGCL, this Amended and Restated
Certificate of Incorporation was duly adopted by the Board of
Directors of the Company and restates in its entirety the provisions
of the Company's Certificate of Incorporation, amends the Company's
Certificate of Incorporation by adding those provisions approved by
written consent of the holders of a majority of the outstanding common
stock and voting power of the Company pursuant to Section 242 of the
DGCL and provides for the deletion of provisions intentionally omitted
in reliance upon Section 245(c) of the DGCL.
4. The Amended and Restated Certificate of Incorporation shall read as
follows:
FIRST. The name of the corporation is Grant Geophysical, Inc. (the
"Company").
SECOND. The address of the Company's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of the Company's registered agent at such address is The
Corporation Trust Company.
THIRD. The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "DGCL").
FOURTH. Section 1. Authorized Stock. The Company has the authority
to issue an aggregate of 60,000,000 shares of capital stock, of which
50,000,000 shares shall be designated Common Stock, $0.001 par value per
share, and 10,000,000 shares shall be designated Preferred Stock, $0.001
par value per share (the "Preferred Stock").
Section 2. Preferred Stock. Preferred Stock may be issued
from time to time in one or more series or classes as shall be determined
from time to time by the Board of Directors. Preferred Stock, and each
series or class thereof , shall have such voting rights, designations,
preferences and relative, participating, optional and other special rights,
qualifications, limitations or restrictions as shall be stated and
expressed in the resolution or resolutions providing for the issue of such
stock adopted by the Board of Directors.
FIFTH. In furtherance and not in limitation of the powers conferred
by the General Corporation Law of the State of Delaware, the Board of
Directors shall have the power to adopt, amend and repeal the By-laws of
the Corporation by the affirmative vote of a majority of the entire Board
of Directors.
SIXTH. The provisions of Section 203 of the DGCL or any statute of
like tenor or effect that is hereafter enacted shall not apply to the
Company.
SEVENTH. To the full extent permitted by the DGCL or any other
applicable law currently or hereafter in effect, no director of the
Company will be personally liable to the Company or its stockholders for or
with respect to any acts or omissions in the performance of his duties as a
director of the Company. Any repeal or modification of this Article
Seventh will not adversely affect any right or protection of a director
of the Company existing prior to such repeal or modification.
EIGHTH. Each person who is or was or had agreed to become a director
or officer of the Company, and each such person who is or was serving or
who had agreed to serve at the request of the Board of Directors or an
officer of the Company as an employee or agent of the Company or as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, or other entity, whether for profit or not for profit
(including the heirs, executors, administrators or estate of such person),
will be indemnified by the Company to the full extent permitted by the DGCL
or any other applicable law as currently or hereafter in effect. The right
of indemnification provided in this Article Eighth: (a) will not be
exclusive of any other rights to which any person seeking indemnification
may otherwise be entitled or any contract approved by a majority of the
entire Board of Directors (whether or not the directors approving such
contract are or are to be parties to such contract or similar contracts),
and (b) will be applicable to matters otherwise within its scope whether or
not such matters arose or arise before or after the filing of this
Certificate of Incorporation. Without limiting the generality or the
effect of the foregoing, the Company may adopt By-Laws, or enter into one
or more agreements with any person, which provide for indemnification
greater or different than that provided by this Article Eighth or the DGCL.
Any amendment or repeal of, or adoption of any provision inconsistent with
this Article Eighth will not adversely affect any right or protection
existing hereunder, or arising out of facts occurring, prior to such
amendment, repeal or adoption and no such amendment, repeal, or adoption
will affect the legality, validity or enforceability of any contract
entered into or right granted prior to the effective date of such
amendment, repeal, or adoption.
NINTH. The books of the Company may be kept (subject to any
requirement of the DGCL) outside the State of Delaware at such place or
places as may be designated from time to time by the Board of Directors or
in the By-Laws of the Company.
IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Certificate of Incorporation to be executed in its corporate name by its
President and Chief Executive Officer and attested by its Secretary both
thereto duly authorized this 12th day of August, 1999.
GRANT GEOPHYSICAL, INC.
By: /S/ Richard H. Ward
-----------------------------
Richard H. Ward
President and Chief
Executive Officer
Attest:
/S/ Michael P. Keirnan
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Michael P. Keirnan
Secretary
AMENDED AND RESTATED BYLAWS
of
GRANT GEOPHYSICAL, INC.
AS EFFECTIVE ON AUGUST 11, 1999
ARTICLE I
STOCKHOLDERS
Section 1.1 Annual Meetings. Unless directors are elected by written
consent in lieu of an annual meeting as described in this Section 1.1, an
annual meeting of stockholders shall be held for the election of directors
at such date, time and place either within or without the State of Delaware
as may be designated by the board of directors from time to time.
Stockholders may act by written consent in accordance with Section 1.11 to
elect directors; provided, however that if such consent is less than
unanimous, such action by written consent may be in lieu of holding an
annual meeting only if all of the directorships to which directors could be
elected at an annual meeting held at the effective time of such action are
vacant and are filled by such action. Any other proper business may be
transacted at the annual meeting.
Section 1.2 Special Meetings. Special meetings of stockholders may be
called at any time by the Chairman of the board of directors or a majority
of the board of directors, and shall be called by the President or the
Secretary at the request in writing of stockholders holding a majority of
the voting power of the entire capital stock of the Corporation entitled to
vote on all matters presented to stockholders. Such request shall be sent
to the President and the Secretary and shall state the purpose or purposes
of the proposed meeting.
Section 1.3 Notice of Stockholder Nominations and Stockholder
Business.
(a) At any meeting of stockholders, only such business
shall be conducted as shall have been properly brought before the meeting.
If directors are to be elected at a stockholders' meeting as described in
Section 1.1 rather than by written consent, nominations of directors and
any other matters to be properly brought before any stockholders' meeting
(other than any special meeting of stockholders called pursuant to Section
1.2) must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the board of directors, (ii)
otherwise properly brought before the meeting by or at the direction of the
board of directors, or (iii) otherwise properly brought before the meeting
by any person who (A) has been for at least one year the holder of stock
representing at least 10% of the voting power of the entire capital stock
of the Corporation entitled to vote on all matters presented to
stockholders and (B) complies with the procedures set forth below.
(b) A notice of the intent of a stockholder to make a
nomination or to bring any other matter before the meeting shall be made in
writing and received by the Corporation's Secretary within 15 days of the
earlier of the date on which notice of such meeting is first mailed to
stockholders or public disclosure of the meeting date is made.
(c) Every such notice by a stockholder shall set forth:
(i) the name, age, business address and residential
address of the stockholder who intends to make a nomination or bring up any
other matter, and any person acting in concert with such stockholder;
(ii) the number of shares of capital stock of the
Corporation held by such stockholder and the dates on which such person
acquired his or her shares;
(iii) a representation that the stockholder intends to
appear in person at the meeting to make the nomination or bring up the
matter specified in the notice;
(iv) with respect to notice of an intent to make a
nomination, a description of all agreements, arrangements or understandings
among the stockholder, any person acting in concert with the stockholder,
each proposed nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made
by the stockholder;
(v) with respect to notice of an intent to make a
nomination, (A) the name, age, business address and residential address of
each person proposed for nomination, (B) the principal occupation or
employment of such person and (C) the class and number of shares of capital
stock of the Corporation of which such person is the beneficial owner; and
(vi) with respect to notice of an intent to bring up
any other matter, a complete and accurate description of the matter not to
exceed 500 words, the reasons for conducting such business at the meeting,
and any material interest of the stockholder in the matter.
(d) The Corporation's Secretary may require any stockholder
submitting a notice of an intent to make a nomination or bring up other
business to furnish such documentary information as may be reasonably
required by the Corporation to determine that such stockholder has been for
at least one year the holder of stock representing at least 10% of the of
the voting power of the entire capital stock of the Corporation entitled to
vote on all matters presented to stockholders.
(e) Notice of an intent to make a nomination shall be
accompanied by the written consent of each nominee to serve as a director
of the Corporation if so elected and an affidavit of each such nominee
certifying that he or she meets the qualifications necessary to serve as a
director of the Corporation. The Corporation may require any proposed
nominee to furnish such other information as may be reasonably required by
the Corporation to determine the eligibility and qualifications of such
person to serve as a director.
(f) With respect to any proposal by a stockholder to bring
before a meeting any matter other than the nomination of directors, the
following shall govern:
(i) If the Corporation's Secretary has received
sufficient notice of a proposal that may properly be brought before the
meeting, a proposal sufficient notice of which is subsequently received by
the Secretary and that is substantially duplicative of the first proposal
shall not be properly brought before the meeting.
(ii) Notwithstanding compliance with all of the
procedures set forth above in this Section, no proposal shall be deemed to
be properly brought before a meeting of stockholders if, in the judgment of
the board of directors, it is not a proper subject for action by
stockholders under the General Corporation Law of the State of Delaware
(the "DGCL").
(g) Nothing in this Section shall be deemed to affect any
rights of stockholders to request inclusion of proposals in any proxy
statement prepared by the Corporation or to solicit their own proxies
pursuant to the proxy rules of the Securities and Exchange Commission.
Section 1.4 Notice of Meetings. Whenever stockholders 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. Unless otherwise provided by law, 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 stockholder entitled
to vote at such meeting.
Section 1.5 Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if
the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the Corporation may
transact any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty 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 stockholder of record
entitled to vote at the meeting.
Section 1.6 Quorum. At each meeting of stockholders, except where
otherwise provided by law or the certificate of incorporation of the
Corporation, the holders of a majority of the voting power of the capital
stock of the Corporation entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum. In the absence of a
quorum the stockholders so present or represented by proxy may, by majority
vote, adjourn the meeting from time to time in the manner provided by
Section 1.5 of these by-laws until a quorum shall attend.
Section 1.7 Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, or in his absence by the President, or
in his absence by a chairman designated by the board of directors. The
Secretary shall act as secretary of the meeting, but in his absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting. The organization of each stockholders' meeting and all matters
relating to the manner of conducting the meeting shall be determined by the
chairman, including the order of business, the conduct of discussion and
the manner of voting. The chairman shall declare out of order and
disregard any nomination or other matter not presented in accordance with
the procedures set forth in Section 1.3 or which is otherwise contrary to
the terms and conditions set forth therein.
Section 1.8 Voting; Proxies. Unless otherwise provided in the
Corporation's certificate of incorporation, each stockholder entitled to
vote at any meeting of stockholders shall be entitled to one vote for each
share of capital stock held by him. Each stockholder entitled to vote at a
meeting of stockholders may authorize another person or persons to act for
him by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A stockholder may revoke any proxy which
is not irrevocable by attending the meeting and voting in person or by
filing an instrument in writing revoking the proxy or another duly executed
proxy bearing a later date with the Secretary of the Corporation. At all
meetings of stockholders where directors are to be elected a plurality of
the votes cast by the holders of shares entitled to vote thereon shall be
sufficient. Unless otherwise provided in the DGCL, all other questions and
matters brought before a meeting of stockholders shall be decided by the
vote of the holders of a majority of the voting power of the capital stock
of the Corporation entitled to vote thereon and present in person or by
proxy at the meeting.
Section 1.9 Fixing Date for Determination of Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights
in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the board of directors may fix, in
advance, a record date, which shall not be more than sixty nor less than
ten days before the date of such meeting, nor more than sixty days prior to
any other action. If no record date is fixed: (i) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held;
and (ii) the record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the
adjourned meeting.
Section 1.10 List of Stockholders Entitled to Vote. The Secretary
shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 1.11 Action Without a Meeting. Any action required or
permitted to be taken at any annual or special meeting of stockholders may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed and dated by the holders of outstanding capital stock having not
less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all outstanding shares entitled
to vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing and
who were entitled to vote thereon.
ARTICLE II
BOARD
Section 2.1 Powers; Number; Qualifications. The business and affairs
of the Corporation shall be managed by or under the direction of the board
of directors, except as may be otherwise provided by the DGCL or in the
certificate of incorporation. The number of directors shall be fixed from
time to time by a vote of a majority of the board of directors. Directors
need not be stockholders.
Section 2.2 Removal. Any director or the entire board of directors
may be removed, with or without cause, at any time by the holders of a
majority of the voting power of the capital stock of the Corporation
entitled to vote upon the election of directors.
Section 2.3 Regular Meetings. Regular meetings of the board of
directors may be held at such places within or without the State of
Delaware and at such times as the board of directors may from time to time
determine, and if so determined notice thereof need not be given.
Section 2.4 Special Meetings. Special meetings of the board of
directors may be held at any time or place within or without the State of
Delaware whenever called by the Chairman of the Board, by the President, or
by a majority of the directors. No less than 24 hours' notice thereof
shall be given by the person or persons calling the meeting.
Section 2.5 Telephonic Meetings Permitted. Unless otherwise
restricted by these by-laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a
meeting of the board of directors or of such committee, as the case may be,
by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each
other, and participation in a meeting pursuant to this by-law shall
constitute presence in person at such meeting.
Section 2.6 Quorum. At all meetings of the board of directors a
majority of the entire board of directors shall constitute a quorum for the
transaction of business. The vote of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the board of
directors unless these by-laws shall require a vote of a greater number.
If at any meeting of the board of directors a quorum shall not be present,
the members of the board of directors present may adjourn the meeting from
time to time until a quorum shall attend.
Section 2.7 Action at Meeting. If a quorum is present when any
meeting of the board of directors is convened, the directors may continue
to do business, taking action by vote of a majority of a quorum as fixed in
Section 2.6, until adjournment, notwithstanding the withdrawal of enough
directors to leave less than a quorum or the refusal of any director
present to vote.
Section 2.8 Organization. Meetings of the board of directors shall be
presided over by the Chairman of the Board, or in his absence by the
President, or in their absence by the chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, or the chairman of the
meeting may appoint any person to act as secretary of the meeting.
Section 2.9 Action Without Meeting. Unless otherwise restricted by
these by-laws, any action required or permitted to be taken at any meeting
of the board of directors, or of any committee thereof, may be taken
without a meeting, if all members of the board of directors or committee,
as the case may be, consent thereto in writing, and the writing or writings
are filed with the minutes of proceedings of the board of directors or the
committee.
ARTICLE III
COMMITTEES
Section 3.1 Committees. The board of directors may, by resolution
passed by a majority of the entire board of directors, designate an
Executive Committee consisting of one or more directors of the Corporation,
who shall meet when deemed necessary. The Executive Committee shall have
and may exercise all the powers and authority of the board of directors in
the management of the business and affairs of the Corporation, at any time
when the entire board of directors is not in session, and may authorize the
seal of the Corporation, if any, to be affixed to all papers which may
require it; but such Executive Committee shall not have power or authority
in reference to any matter which may not be lawfully delegated to a
committee under the DGCL. The board of directors may from time to time, by
resolution passed by a majority of the entire board of directors, designate
one or more other committees, each committee to consist of one or more of
the directors of the Corporation and to have such powers and authority of
the board of directors as shall be stated in such resolution. The board of
directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting
of the committee. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the board of directors to act at
the meeting in place of any such absent or disqualified member.
Section 3.2 Committee Rules. Unless the board of directors otherwise
provides, each committee designated by the board of directors may make,
alter and repeal rules for the conduct of its business. In the absence of
a provision by the board of directors or a provision in the rules of such
committee to the contrary, a majority of the entire authorized number of
members of such committee shall constitute a quorum for the transaction of
business, the vote of a majority of the members present at a meeting at the
time of such vote if a quorum is then present shall be the act of such
committee, and in other respects each committee shall conduct its business
in the same manner as the board of directors conducts its business pursuant
to Article II of these by-laws.
ARTICLE IV
OFFICERS
Section 4.1 Officers; Election; Qualification; Term of Office;
Resignation; Removal; Vacancies. The officers of the Corporation shall be
chosen by the board of directors and shall be a Chairman of the Board, a
President, a Secretary and a Treasurer. The board of directors may also
choose one or more Vice Presidents and one or more assistant officers and
may give any of them such further designations or alternate titles as it
considers desirable. Any number of offices may be held by the same person,
unless the certificate of incorporation or these by-laws otherwise provide.
The board of directors may appoint such other officers and agents as it
shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from
time to time by the board. The salaries of all officers and agents of the
Corporation shall be fixed by the board of directors. The officers of the
Corporation shall hold office at the pleasure of the board of directors.
Except as otherwise provided in the resolution of the board of directors
electing any officer, each officer shall hold office until his or her
successor is elected and qualified or until his or her earlier resignation
or removal. The board of directors may remove any officer with or without
cause at any time by the affirmative vote of a majority of the board of
directors. Any vacancy occurring in any office of the Corporation shall be
filled by the board of directors.
Section 4.2 Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the board of directors and of the stockholders
at which he shall be present. He shall also perform all duties incident to
the office of Chairman of the Board, and such other duties as, from time to
time, may be assigned to him by the board of directors or as may be
provided by law.
Section 4.3 President. In the absence of the Chairman of the Board,
the President shall preside at all meetings of the stockholders at which he
shall be present, and in the absence of the Chairman of the Board, he shall
preside at all meetings of the board of directors at which he shall be
present. The President, at the request of the Chairman of the Board or in
his protracted absence or during his inability to act, shall perform the
duties of the Chairman of the Board and when so acting shall have the
powers of the Chairman of the Board. He shall perform all duties incident
to the office of President of a Corporation, and such other duties as, from
time to time, may be assigned to him by the board of directors or the
Chairman of the Board or as may be provided by law.
Section 4.4 Vice Presidents. The Vice President or Vice Presidents
shall have such powers and perform such duties as may be assigned to him or
them by the board of directors, the Chairman of the Board or the President
or as may be provided by law.
Section 4.5 Secretary. The Secretary shall record all the proceedings
of the meetings of the stockholders and the board of directors and any
committees in a book to be kept for that purpose; he shall see that all
notices are duly given in accordance with the provisions of these by-laws
or as required by law; he shall be custodian of the records of the
Corporation; he may affix the corporate seal, if any, to any document the
execution of which, on behalf of the Corporation, is duly authorized, and
when so affixed may attest the same; and, in general, he shall perform all
duties incident to the office of Secretary of a Corporation, and such other
duties as, from time to time, may be assigned to him by the board of
directors, the Chairman of the Board or the President or as may be provided
by law.
Section 4.6 Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit or cause to be deposited, in the name of the
Corporation, all funds or other valuable effects in such banks, trust
companies or other depositaries as shall, from time to time, be selected by
or under authority of the board of directors; and, in general, he shall
perform all the duties incident to the office of Treasurer of a
Corporation, and such other duties as may be assigned to him by the board
of directors, the Chairman of the Board or the President or as may be
provided by law. If required by the board of directors, he shall give a
bond for the faithful discharge of his duties, with such surety or sureties
as the board of directors may determine.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification of Directors and Officers. The
Corporation shall indemnify, to the fullest extent now or hereafter
permitted by law, any director or officer who was or is a party or is
threatened to be made a party to, or is involved in, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereafter, a "proceeding"), by reason of
the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Corporation, or is
or was serving at the request of the Corporation as a director, officer,
partner, trustee, employee or agent of another Corporation, partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, partner, trustee,
employee or agent or in any other capacity while serving as a director,
officer, partner, trustee, employee or agent, against all expense,
liability and loss (including attorneys' fees, judgments, fines, excise
taxes or penalties and amounts paid or to be paid in settlement with
respect to any action, suit or proceeding, whether criminal, administrative
or investigative) actually and reasonably incurred or suffered by such
person in connection therewith and such indemnification shall continue as
to a person who has ceased to be a director, officer, partner, trustee,
employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators, provided, however, that, except as provided
in Section 5.4, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated
by such person only if such proceeding (or part thereof) was authorized by
the board of directors.
Section 5.2 Indemnification of Employees and Agents. The Corporation
may indemnify any employee or agent of the Corporation to an extent greater
than that required by law only if and to the extent that the directors may,
in their discretion, so determine.
Section 5.3 Advancement of Expenses. Expenses, including attorneys'
fees, incurred by a then-current director or officer of the Corporation in
defending any proceeding referred to in Section 5.1, shall be paid by the
Corporation, and may be paid by the Corporation with respect to any former
director or officer of the Corporation, in advance of the final disposition
of such proceeding upon receipt of an undertaking by or on behalf of such
director or officer, or former director or officer, to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation as authorized in this Article V; which
undertaking may be secured or unsecured, at the discretion of the
Corporation.
Section 5.4 Procedures and Presumptions Under this Article. If a
claim under Section 5.1 is not paid in full by the Corporation within
thirty days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which
make it permissible under the DGCL for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 5.5 Indemnification Provided in this Article Not Exclusive.
The indemnification and advancement of expenses provided under this Article
V shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any law,
the certificate of incorporation, these by-laws, any agreement, vote of
stockholders or of disinterested directors or otherwise, both as to action
in their official capacity and as to action in another capacity while
holding such office.
Section 5.6 Article Deemed a Contract. This Article V shall be deemed
to be a contract between the Corporation and each director or officer of
the Corporation who serves in such capacity or who serves at the request of
the Corporation as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, at
any time while this Article V is in effect, and any repeal, amendment or
other modification of this Article V shall not affect any rights or
obligations then existing with respect to any state of facts then or
theretofore existing or any action, suit or proceeding theretofore or
thereafter brought or threatened based in whole or in part upon any such
state of facts.
Section 5.7 Definition of "Corporation." For the purposes of this
Article V, references to the "Corporation" include any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger as well as the resulting or surviving corporation
so that any person who is or was a director, officer, employee, partner,
trustee or agent of such a constituent corporation or is or was serving at
the request of such constituent corporation as a director, officer,
employee, partner, trustee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position
under the provisions of this Article with respect to the resulting or
surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
Section 5.8 Savings Clause. If this Article V or any portion thereof
shall be invalidated or found unenforceable on any ground by any court of
competent jurisdiction, then the Corporation shall nevertheless indemnify
each director and officer of the Corporation against all expense, liability
and loss (including attorneys' fees, judgments, fines, excise taxes,
penalties and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative) to
the full extent permitted by any applicable portion of this Article V that
shall not have been invalidated or found unenforceable, or by any other
applicable law.
Section 5.9 Insurance. The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer, employee or agent
of the Corporation or individual serving at the request of the Corporation
as a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against any such
expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss
under the DGCL.
ARTICLE VI
STOCK
Section 6.1 Certificates. Every holder of stock in the Corporation
shall be entitled to have a certificate signed by or in the name of the
Corporation by the Chairman of the Board, the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary, of the Corporation, certifying the number of
shares owned by him in the Corporation. Any or all of the foregoing
signatures may be facsimiles. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon
a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer, transfer agent
or registrar at the date of issue.
Section 6.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The Corporation may issue a new certificate of stock in
the place of any certificate theretofore issued by it, alleged to have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be lost, stolen or
destroyed. The Corporation may, as a condition precedent to the issuance
of such new certificate of stock, require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the Corporation
a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.
Section 6.3 Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person registered on
its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of any
other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
ARTICLE VII
NOTICES
Section 7.1 Form of Notice. Unless provided otherwise by law or these
by-laws, notice to any stockholder may be given in writing, by mail or
national commercial courier service, addressed to such stockholder, at his
address as it appears on the records of the Corporation. Notice to a
director may be given in person, by telephone, by facsimile transmission,
or in writing delivered by a national commercial courier service for
next-day delivery to his address as it appears on the records of the
Corporation. Notice given by mail or by a commercial courier service shall
be deemed to be given at the time when the same shall be deposited in the
United States mail or with such courier service. Notice given by facsimile
transmission shall be deemed to be given when so transmitted.
Section 7.2 Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Whenever notice is required to be given by law or under
any provision of the certificate of incorporation or these by-laws, a
written waiver thereof, signed by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the person attends a 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. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the stockholders, directors, or members
of a committee of directors need be specified in any written waiver of
notice unless so required by these by-laws.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fiscal Year. The fiscal year of the Corporation shall
end upon the last day of December, or otherwise shall be as determined by
the board of directors from time to time.
Section 8.2 Seal. The Corporation may have a corporate seal which
shall have the name of the Corporation inscribed thereon and shall be in
such form as may be approved from time to time by the board of directors.
The corporate seal, if any, may be used by causing it or a facsimile
thereof to be impressed or affixed or in any other manner reproduced.
Section 8.3 Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation, partnership, association
or other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or
voidable solely for this reason, or solely because the director or officer
is present at or participates in the meeting of the board of directors or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if: (i) the
material facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less
than a quorum; or (ii) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known
to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified, by the
board of directors, a committee thereof or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum
at a meeting of the board of directors or of a committee which authorizes
the contract or transaction.
Section 8.4 Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock
ledger, books of account and minute books, may be kept on, or be in the
form of, punch cards, magnetic tape, photographs, microphotographs or any
other information storage device, provided that the records so kept can be
converted into clearly legible form within a reasonable time. The
Corporation shall so convert any records so kept upon the request of any
person entitled to inspect the same.
Section 8.5 Amendment of By-Laws. These by-laws may be amended or
repealed by the board of directors at any regular or special meeting or by
a stockholders holding a majority of the voting power of the entire capital
stock of the Corporation entitled to vote on all matters presented to
stockholders.
CERTIFICATE OF DESIGNATIONS
of
8% EXCHANGEABLE PREFERRED STOCK
of
GRANT GEOPHYSICAL, INC.
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
Grant Geophysical, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Company"), hereby certifies that
the following resolution was adopted at a meeting of the board of directors
of the Company (the "Board of Directors") on August 13, 1999 pursuant to
Section 151(g) of the Delaware General Corporation Law:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Company, the Board of
Directors hereby creates a series of Preferred Stock, par value $0.001 per
share, of the Company and hereby states the designation and number of
shares, and fixes the relative rights, preferences and limitations thereof
as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "8% Exchangeable Preferred Stock" (the "8% Exchangeable
Preferred Stock") and the number of shares constituting the 8% Exchangeable
Preferred Stock shall be one hundred twenty thousand (120,000). Such
number of shares may be increased or decreased at any time by resolution of
the Board of Directors; provided, however, no decrease shall reduce the
number of shares of 8% Exchangeable Preferred Stock to a number less than
the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights, or warrants
for, or upon the conversion or exchange of any outstanding securities
issued by the Company convertible or exchangeable into 8% Exchangeable
Preferred Stock.
Section 2. Liquidation. Upon the voluntary or involuntary
liquidation, winding up or dissolution of the Company, out of the assets
available for distribution to shareholders, the 8% Exchangeable Preferred
Stock shall be entitled to receive, in preference to any payment to the
common stock, $0.001 par value per share (the "Common Stock"), and any
other stock of the Company ranking junior to the 8% Exchangeable Preferred
Stock, $100 per share plus an amount equal to all dividends (whether or not
earned or declared) accrued and unpaid on each such share up to the date
fixed for distribution (the "Preferred Liquidation Value"). After the 8%
Exchangeable Preferred Stock has been paid, the remaining assets shall be
paid to the Common Stock and other junior classes of stock in accordance
with their respective priority, if any. In the event the net assets of the
Company are insufficient to pay the holders of the 8% Exchangeable
Preferred Stock the full amount of their preference set forth above, then
the remaining net assets of the Company shall be divided among and paid to
the holders of the shares of 8% Exchangeable Preferred Stock ratably per
share in proportion to the full per share amounts to which they are
entitled, and the Common Stock and other junior classes of stock will
receive nothing.
Section 3. Dividends. The 8% Exchangeable Preferred Stock is entitled
to receive, out of legally available funds, cumulative dividends
("Preferred Dividends") from the issuance date thereof at the annual rate
of eight percent (8%) of the Preferred Liquidation Value per share. All
Preferred Dividends shall be payable quarterly on the first business day of
each January, April, July and October of each year (each, a "Dividend
Payment Date") commencing on October 1, 1999, to each holder of record at
the start of business on such Dividend Payment Date. Preferred Dividends
shall begin to accrue on outstanding shares of 8% Exchangeable Preferred
Stock and to accumulate from the issuance date of such shares whether or
not earned or declared, but Preferred Dividends for any period less than a
full quarterly period between Dividend Payment Dates shall be computed on
the basis of a 365-day year for the actual number of days elapsed.
Interest shall accrue on accumulated but unpaid Preferred Dividends at the
Default Rate (as defined below). At the Company's option, any Preferred
Dividend may be paid, in whole or in part, in fully paid and non-assessable
shares of 8% Exchangeable Preferred Stock having an aggregate Preferred
Liquidation Value equal to the amount of the cash dividend that otherwise
would have been required to be paid pursuant to this Section 3. The
"Default Rate" shall be 12% per annum.
Section 4. Exchange. The holders of shares of 8% Exchangeable
Preferred Stock have the following exchange rights:
(a) Definitions. For purposes of this Section 4, the following
definitions shall apply:
(i) "Capital Stock" shall mean Common Stock and any other
capital stock of the Company authorized from time to time, and
any other shares, options, interests, participations or other
equivalents (however designated) of or in the Company, whether
voting or nonvoting, including without limitation, common stock,
options, warrants, preferred stock, phantom stock, stock
appreciation rights, convertible notes or debentures, stock
purchase rights, and all agreements, instruments, documents and
securities convertible, exercisable or exchangeable, in whole or
in part, into any one or more of the foregoing.
(ii) "Initial Public Offering" shall mean the consummation
of an underwritten public offering of Common Stock of the Company
pursuant to a registration statement filed under the Securities
Act of 1933, as amended, after the Issuance Date (other than any
registration statement relating to warrants, options or shares of
capital stock granted or to be granted or sold primarily to
employees, directors or officers of the Company, a registration
statement filed pursuant to Rule 145 under the Securities Act of
1933, as amended, or any successor rule, a registration statement
relating to employee benefit plans or interests therein and any
registration statement covering preferred stock or securities
issued in connection with any debt or preferred stock financing
of the Company) wherein the aggregate net proceeds (after
deducting all costs, discounts, commissions and other expenses of
the offering) to the Company, the selling shareholders or the
Company and the selling shareholders are at least $25 million.
(iii) "Issuance Date" shall mean, with respect to the 8%
Exchangeable Preferred Stock, the first date on which the Company
issued any shares of such 8% Exchangeable Preferred Stock.
(iv) "New Securities" shall mean any Capital Stock other
than shares of Common Stock outstanding on the Issuance Date;
provided that the term "New Securities" does not include (A)
Common Stock issued as a stock dividend to holders of Common
Stock or upon any subdivision or combination of shares of Common
Stock, (B) the issuance of Common Stock of the Company pursuant
to an Initial Public Offering, (C) the issuance of shares of
Common Stock in connection with a merger or securities issued in
consideration for the acquisition by the Company or any
subsidiary of the Company of the stock or assets of another
Person, or (D) the issuance of shares of Common Stock pursuant to
stock options granted to employees or directors of the Company
under a stock option plan.
(v) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(b) Right to Exchange. So long as any shares of 8% Exchangeable
Preferred Stock are outstanding, if the Company proposes to sell or issue
New Securities, each share of 8% Exchangeable Preferred Stock shall be
exchangeable, at the option of the holder thereof, into such New
Securities. If the holder of 8% Preferred Stock elects to exchange any
shares of 8% Exchangeable Preferred Stock, then the holder will be entitled
to receive New Securities having a purchase price equal to the aggregate
Preferred Liquidation Value (calculated including accumulated and unpaid
dividends thereon up to the date of exchange) of the 8% Exchangeable
Preferred Stock so exchanged.
(c) Notice to Holders. In the event the Company proposes to
issue or sell New Securities, it will give each holder of 8% Exchangeable
Preferred Stock written notice of its intention, describing the type of New
Security and the price and terms upon which the Company proposes to issue
or sell the New Securities, together with such other information as may be
required under the Securities Act. Each holder of 8% Exchangeable
Preferred Stock will have 20 days from the date of receipt of any such
notice to elect to exchange its 8% Exchangeable Preferred Stock for the New
Securities based upon the price and the terms specified in the notice by
giving written notice to the Company stating the quantity of 8%
Exchangeable Preferred Stock it desires to exchange into the New
Securities.
(d) Allocation of New Securities. In the event the holders of
the 8% Exchangeable Preferred Stock desire to exercise their exchange right
hereunder to the extent that the number of New Securities into which the
shares of 8% Exchangeable Preferred Stock elected to be exchanged by the
holders thereof are exchangeable pursuant to Section 4(b) exceeds the
number of New Securities the Company has proposed to issue or sell, each
holder of 8% Exchangeable Preferred Stock shall be entitled to exchange
its 8% Exchangeable Preferred Stock into its respective pro rata share of
the New Securities the Company has proposed to issue or sell based on the
aggregate number of shares of 8% Exchangeable Preferred Stock held by each
holder (excluding, for such purposes, any holder that does not elect to
exchange its shares).
(e) Offer Period. Following the end of the notice period
specified in Section 4(c), the Company will have 90 days to sell the New
Securities remaining, if any, after the holders of 8% Exchangeable
Preferred Stock have exercised their exchange rights at the same price and
upon substantially the same terms specified in the Company's notice
described in Section 4(c). So long as any shares of 8% Exchangeable
Preferred Stock are outstanding, in the event the Company has not sold the
New Securities within such 90-day period, the Company will not thereafter
issue or sell any New Securities without first allowing the holders of 8%
Exchangeable Preferred Stock to exchange their 8% Exchangeable Preferred
Stock into such New Securities in the manner provided in this Section 4.
(f) No Impairment. The Company will not, by amendment of its
Amended and Restated Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and take
all such action as may be necessary or appropriate in order to protect the
exchange rights of the holders of the 8% Exchangeable Preferred Stock
against impairment.
Section 5. Voting Rights.
(a) Except as set forth below or as otherwise provided by
Delaware law, holders of shares of 8% Exchangeable Preferred Stock shall
not be entitled to vote on matters submitted to a vote of the Company's
stockholders. In all cases where the holders of shares of 8% Exchangeable
Preferred Stock have the right to vote separately as a class as provided
elsewhere herein or otherwise by Delaware law, such holders shall be
entitled to one vote for each such share held by them respectively.
(b) So long as shares of 8% Exchangeable Preferred Stock are
outstanding, the Company shall not, without the affirmative vote of the
holders of not less than a majority of the shares of 8% Exchangeable
Preferred Stock, voting separately as a class:
(i) amend its Amended and Restated Certificate of
Incorporation or any other document to alter or change any
rights, preferences or privileges of the 8% Exchangeable
Preferred Stock;
(ii) authorize another class or series of shares senior to
or ranking in parity with the 8% Exchangeable Preferred Stock
with respect to dividend preferences or distribution of assets on
liquidation; or
(iii) purchase, redeem or otherwise acquire any Common
Stock, either directly or through a subsidiary, excluding the
purchase of Common Stock from an employee or consultant of the
Company.
Section 6. Redemption.
(a) The Company shall have the right, at its sole option and
election, to redeem the shares of 8% Exchangeable Preferred Stock, in whole
or in part, on not less than sixty (60) days notice of the date of
redemption (any such date a "Redemption Date") at a price per share (the
"Redemption Price") equal to (A) 100% of the Preferred Liquidation Value
plus (B) all accrued and unpaid dividends thereon, whether or not declared
or payable, to the applicable Redemption Date, in immediately available
funds.
(b) Notice of any redemption of shares of 8% Exchangeable
Preferred Stock pursuant to Section 6(a) shall be mailed at least thirty
(30), but not more than sixty (60), days prior to the applicable Redemption
Date to each holder of the shares of 8% Exchangeable Preferred Stock to be
redeemed, at such holder's address as it appears on the transfer books of
the Company. In order to facilitate the redemption of shares of 8%
Exchangeable Preferred Stock, the Board of Directors may fix a record date
for the determination of shares of 8% Exchangeable Preferred Stock to be
redeemed, or may cause the transfer books of the Company for the 8%
Exchangeable Preferred Stock to be closed, not more than sixty (60) days or
less than ten (10) days prior to the applicable Redemption Date.
(c) Notice of redemption having been given as provided in
Section 6(b), notwithstanding that any certificates for such shares shall
not have been surrendered for cancellation, from and after the Redemption
Date designated in the notice of redemption (i) the shares represented
thereby shall no longer be deemed outstanding, (ii) the rights to receive
dividends thereon shall cease to accrue and (iii) all rights of the holders
of shares of 8% Exchangeable Preferred Stock to be redeemed shall cease and
terminate, excepting only the right to receive the Redemption Price
therefor and the right to convert such shares into shares of Common Stock
until the close of business on such Redemption Date, in accordance with
Section 4 hereof.
Section 7. Reacquired Shares. Any shares of 8% Exchangeable Preferred
Stock converted, exchanged, redeemed, purchased or otherwise acquired by
the Company in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. No such share or shares shall be reissued.
Section 8. Preemptive Rights. Except as provided herein, the 8%
Exchangeable Preferred Stock is not entitled to any preemptive rights in
respect of any securities of the Company.
Section 9. Amendment and Waiver. The Company may not amend this
Certificate of Designations or waive compliance with any of the provisions
hereof without, in either instance, the affirmative vote (at a meeting) or
the written consent (with or without a meeting) of the holders of a
majority of the shares of 8% Exchangeable Preferred Stock; provided that no
such action will change the dividend rate, the Preferred Liquidation Value
or the amount payable on redemption of the 8% Exchangeable Preferred Stock
without the prior written consent of each holder of 8% Exchangeable
Preferred Stock.
Section 10. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidated or otherwise adversely affective the remaining provisions
hereof. If a court of competent jurisdiction should determine that a
provisions hereof would be valid or enforceable if a period of time were
extended or shortened or a particular percentage were increased or
decreased, then such court may make such change as shall be necessary to
render the provision in question effective and valid under applicable law.
IN WITNESS WHEREOF, Grant Geophysical, Inc. has caused this
Certificate of Designations of 8% Exchangeable Preferred Stock to be duly
executed by Richard H. Ward, its President, this 13th day of August, 1999.
GRANT GEOPHYSICAL, INC.
By: /S/ Richard H. Ward
-------------------------
Richard H. Ward
President
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Agreement") is made and effective as
of this __th day of August __, 1999, by and between Grant Geophysical,
Inc., a Delaware corporation (the "Company"), and ______________
("Indemnitee").
W I T N E S S E T H:
WHEREAS, the Company seeks to attract and retain competent and
experienced persons to serve as directors and desires to protect such
individuals by providing comprehensive liability insurance and
indemnification due to exposure to litigation costs and risks resulting
from their service to the Company;
WHEREAS, the Board of Directors of the Company has concluded that to
retain and attract talented and experienced individuals to serve as
directors of the Company, and to encourage such individuals to take the
business risks necessary for the success of the Company, it is necessary
for the Company to contractually indemnify its directors and to assume for
itself maximum liability for expenses and damages in connection with claims
against its directors in connection with their service to the Company;
WHEREAS, the General Corporation Law of the State of Delaware (the
"DGCL"), under which the Company is organized, empowers the Company to
indemnify by agreement its directors and expressly provides that the
indemnification provided in the DGCL is not exclusive; and
WHEREAS, the Company desires and has requested the Indemnitee to
continue to serve as a director of the Company free from undue concern for
claims for damages arising out of or related to such service to the
Company.
NOW, THEREFORE, in consideration of the Indemnitee's agreement to
continue to serve as a director of the Company, the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto stipulate
and agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the indicated meanings:
(a) "agent" of the Company means any person who is or was a
director of the Company or a subsidiary of the Company; or is or was
serving at the request of, for the convenience of, or to represent the
interest of the Company or a subsidiary of the Company as a director or
officer of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise or an affiliate of the Company. The
term "enterprise" includes any employee benefit plan of the Company, its
subsidiaries or affiliates.
(b) "expenses" includes all direct and indirect costs of any
type or nature whatsoever (including, without limitation, all attorneys'
fees and related disbursements and other out-of-pocket costs) actually and
reasonably incurred by the Indemnitee in connection with the investigation,
defense or appeal of a proceeding or establishing or enforcing a right to
indemnification or advancement of expenses under this Agreement, the
Company's Certificate of Incorporation, Bylaws, the DGCL or otherwise.
(c) "proceeding" means any threatened, pending or completed
action, suit or other proceeding, whether civil, criminal, administrative,
arbitral, investigative or any other type whatsoever.
(d) "subsidiary" means any corporation or other business entity
of which more than 50% of the outstanding voting securities is owned,
directly or indirectly, by the Company, by the Company and one or more of
its subsidiaries or by one or more of the Company's subsidiaries.
2. Agreement to Serve. The Indemnitee agrees to continue to serve
as a director and agent of the Company in the capacities Indemnitee
currently serves or as he may hereafter agree to serve so long as he is
duly appointed or elected and qualified in accordance with the applicable
provisions of the Certificate of Incorporation, Bylaws or otherwise of the
Company, or until such time as he tenders his resignation in writing.
3. Maintenance of Liability Insurance.
(a) The Company agrees that, as long as the Indemnitee shall
continue to serve as a director of the Company and/or as an agent in any
other capacity and thereafter for the period of five years following the
termination of service, the Company shall maintain in full force and effect
directors' and officers' liability insurance (the "D&O Insurance") in a
minimum aggregate amount of $____ million for each policy year from
established and reputable insurers on such terms as are approved from time
to time by the Board of Directors. The Indemnitee shall be named as an
insured in all D&O Insurance in such a manner as to provide the Indemnitee
with the maximum rights and benefits available under the D&O Insurance.
(b) Notwithstanding anything in this Section 3 to the contrary,
the Company shall have no obligation to maintain D&O Insurance if the Board
of Directors, by a two-thirds vote, determines in good faith that the
premium costs for such insurance are disproportionate to the amount of
coverage provided or the coverage provided by such insurance is limited by
exclusions so as to provide an insufficient benefit.
4. Indemnification. To the fullest extent allowed by law, the
Indemnitee shall be indemnified and held harmless by the Company against
all expense incurred by Indemnitee in connection with any proceeding to
which the Indemnitee is a party, participant or is threatened to be made a
party or participant, based upon, arising from, relating to or by reason of
the fact that the Indemnitee is, was, shall be or shall have been an agent.
5. Mandatory Advancement of Expenses. The Company shall advance all
expenses incurred by the Indemnitee in connection with the investigation,
defense, settlement or appeal of any proceeding to which the Indemnitee is
a party or is threatened to be made a party by reason of the fact that the
Indemnitee is or was an agent or by reason of anything done or not done by
him in any such capacity. The Indemnitee hereby undertakes to repay such
amounts advanced only if, and to the extent that, it shall ultimately be
determined that the Indemnitee is not entitled to be indemnified by the
Company under the provisions of this Agreement, the Certificate of
Incorporation or Bylaws of the Company, the DGCL or otherwise. The
advances to be made hereunder shall be paid by the Company to the
Indemnitee within 20 days following the delivery of a written request
therefor by the Indemnitee to the Company.
6. Notice and other Procedures.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with
respect thereto may be sought from the Company under this Agreement, notify
the Company of the commencement or threat of commencement thereof.
(b) If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 6(a), the Company has D&O
Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the D&O Insurance. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on
behalf of the Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of the D&O Insurance.
(c) If the Company is obligated to advance the expenses for any
proceeding, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by the Indemnitee (which
approval shall not be unreasonably withheld), upon the delivery to the
Indemnitee of written notice of its election to do so. After delivery of
such notice, approval of such counsel by the Indemnitee and the retention
of such counsel by the Company, the Company will not be liable to the
Indemnitee under this Agreement for any fees of counsel subsequently
incurred by the Indemnitee with respect to the same proceeding, provided
that: (i) the Indemnitee shall have the right to employ his own counsel in
any such proceeding at the Indemnitee's expense; (ii) the Indemnitee shall
have the right to employ his own counsel in connection with any such
proceeding, at the expense of the Company, if such counsel serves in a
review, observer, advice and counseling capacity and does not otherwise
materially control or participate in the defense of such proceeding; and
(iii) if (A) the employment of counsel by the Indemnitee has been
previously authorized by the Company, (B) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of any such defense or (C) the
Company shall not, in fact, have employed counsel to assume the defense of
such proceeding, then the fees and expenses of the Indemnitee's counsel
shall be at the expense of the Company.
7. Determination of Right to Indemnification.
(a) To the extent the Indemnitee has been successful on the
merits or otherwise in defense of any proceeding referred to in Section 4
or in the defense of any claim, issue or matter described therein, the
Indemnitee shall be entitled to indemnification from the Company and the
Company shall indemnify the Indemnitee against expenses actually and
reasonably incurred by him in connection with the investigation, defense or
appeal of such proceeding.
(b) In the event that Section 7(a) is inapplicable, the Company
shall also indemnify the Indemnitee unless, and only to the extent that,
the Company shall prove by clear and convincing evidence to a forum listed
in Subsection 7(c) that the Indemnitee's acts were committed in bad faith,
or were the result of active and deliberate dishonesty, and were material
to the cause of action so adjudicated and that the Indemnitee in fact
personally gained a financial profit or other advantage to which he was not
legally entitled. Neither the failure of the Company to have made a
determination prior to the commencement of a proceeding that
indemnification of the Indemnitee is proper under the circumstances because
the Indemnitee has met the applicable standard of conduct set forth in the
DGCL, nor an actual determination by the Company that the Indemnitee has
not met the applicable standard of conduct, shall be a defense to the
action or create a presumption that the Indemnitee has not met the
applicable standard of conduct.
(c) The Indemnitee shall be entitled to select the forum in
which the validity of the Company's claim under Section 7(b) hereof that
the Indemnitee is not entitled to indemnification will be heard from among
the following:
(i) A quorum of the Board of Directors consisting of
directors who are not parties to the proceeding for which indemnification
is being sought or by a committee of such directors designated by a
majority vote of such directors, even though less than a quorum;
(ii) The stockholders of the Company;
(iii) Legal counsel selected by the Indemnitee, and
reasonably approved by the Board of Directors, which counsel shall make
such determination in a written opinion; or
(iv) A panel of three arbitrators, one of whom is selected
by the Company, another of whom is selected by the Indemnitee and the last
of whom is selected by the first two arbitrators so selected.
(d) As soon as practicable, and in no event later than 30 days
after written notice of the Indemnitee's choice of forum pursuant to
Section 7(c), the Company shall, at its own expense, submit to the selected
forum in such manner as the Indemnitee or the Indemnitee's counsel may
reasonably request, its claim that the Indemnitee is not entitled to
indemnification; and the Company shall act in the utmost good faith to
assure the Indemnitee a complete opportunity to defend against such claim.
(e) After the final decision of the forum selected pursuant to
Section 7(c) is rendered, the Indemnitee and Company shall each have the
right to apply to the Chancery Court of New Castle County, the court in
which that proceeding is or was pending or any other court of competent
jurisdiction, for the purpose of appealing the decision of such forum;
provided that such right is exercised within 60 days after the final
decision of such forum is rendered.
(f) Notwithstanding any other provision in this Agreement to the
contrary, the Company shall indemnify the Indemnitee against all expenses
incurred by the Indemnitee in connection with any proceeding under this
Section 7 involving the Indemnitee and against all expenses incurred by the
Indemnitee in connection with any other proceeding between the Company and
the Indemnitee involving the interpretation or enforcement of the rights of
the Indemnitee under this Agreement unless a court of competent
jurisdiction finds that each of the claims and/or defenses of the
Indemnitee in any such proceeding was frivolous or made in bad faith.
8. Exceptions. Notwithstanding any other provision of this
Agreement, the Company shall not be obligated pursuant to the terms of this
Agreement:
(a) To indemnify or advance expenses to the Indemnitee with
respect to proceedings or claims initiated or brought voluntarily by the
Indemnitee and not by way of defense, except with respect to proceedings
specifically authorized by the Board of Directors or brought to establish
or enforce a right to indemnification and/or advancement of expenses
arising under this Agreement, the Certificate of Incorporation or Bylaws of
the Company or any subsidiary or any statute or law or otherwise, but such
indemnification or advancement of expenses may be provided by the Company
in specific cases if the Board of Directors finds it to be appropriate;
(b) To indemnify the Indemnitee hereunder for any amounts paid
in settlement of a proceeding unless the Company consents in advance in
writing to such settlement, which consent shall not be unreasonably
withheld; or
(c) To indemnify the Indemnitee on account of any suit in which
judgment is rendered against the Indemnitee for an accounting of profits
made from the purchase or sale by the Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any
federal, state or local statutory law.
9. Successors; Binding Agreement. This Agreement shall be binding
on, and shall inure to the benefit of and be enforceable by, each of the
Indemnitee's personal or legal representatives, executives, administrators,
successors, heirs, distributees, devisees and by each of the Company's
successors and assigns. The Company shall require any successor or
assignee (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by written agreement in form and substance reasonably
satisfactory to the Company and to the Board of Directors, expressly to
assume and agree to perform this Agreement in the same manner that the
Company would be required to perform if no such succession or assignment
had taken place.
10. Credit for Insurance; Other Indemnities. Notwithstanding any
other provision of this Agreement, the amount of indemnification payable by
the Company with respect to any proceeding shall be subject to a credit for
amounts actually paid to Indemnitee under or pursuant to (a) D&O Insurance
and (b) provisions providing indemnification in the Certificate of
Incorporation, Bylaws, resolutions, agreements or other instruments of the
Company or any subsidiary.
11. Deposit of Funds in Trust. If the Company voluntarily decides to
dissolve or to file a petition for relief under any applicable bankruptcy,
moratorium or similar laws, then not later than 10 days prior to such
dissolution or filing, the Company shall deposit in trust for the sole and
exclusive benefit of Indemnitee a cash amount equal to all amounts
previously authorized to be paid to Indemnitee hereunder, such amounts to
be used to discharge the Company's obligations to Indemnitee hereunder.
Any amounts in such trust not required for such purpose shall be returned
to the Company. This Section 11 shall not apply to the dissolution of the
Company in connection with a transaction as to which Section 9 applies.
12. Enforcement.
(a) The Company has entered into this Agreement and assumed the
obligations imposed on the Company or hereby in order to induce the
Indemnitee to continue to act as an agent of the Company and acknowledges
that the Indemnitee is relying upon this Agreement in continuing in such
capacity.
(b) All expenses incurred by the Indemnitee in connection with
the preparation and submission of the Indemnitee's request for
indemnification hereunder shall be borne by the Company. If the Indemnitee
has requested payment of any amount under this Agreement and has not
received payment thereof within 20 days of such request, the Indemnitee may
bring any action to enforce rights or collect moneys due under this
Agreement, and, if the Indemnitee is successful in such action, the Company
shall reimburse the Indemnitee for all of the Indemnitee's fees and
expenses in bringing and pursuing such action. If it is determined that
the Indemnitee is entitled to indemnification for part (but not all) of the
indemnification so requested, expenses incurred in seeking enforcement of
such partial indemnification shall be reasonably prorated among the claims,
issues or matters for which the Indemnitee is entitled to indemnification
for claims, issues or matter for which the Indemnitee is not so entitled.
The Indemnitee shall be entitled to the advancement of such amounts to the
full extent contemplated by Section 5 hereof in connection with such
proceeding.
(c) The Company shall be precluded from asserting in any
judicial proceeding commenced under this Agreement that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and
shall stipulate in any such court that the Company is bound by all the
provisions of this Agreement.
13. Savings Clause. If any provision of this Agreement is determined
by a court having jurisdiction over the matter to violate or conflict with
applicable law, the court shall be empowered to modify or reform such
provision so that, as modified or reformed, such provision provides the
maximum indemnification permitted by law and such provi-sion, as so
modified or reformed, and the balance of this Agreement, shall be applied
in accordance with their terms. Without limiting the generality of the
forego-ing, if any portion of this Agreement shall be invalidated on any
ground, the Company shall nevertheless indemnify Indemni-tee to the full
extent permitted by any applicable portion of this Agreement that shall not
have been invalidated and to the full extent permitted by law with respect
to that portion that has been invalidated.
14. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some
claims, issues or matters related to a proceeding, but not as to other
claims, issues or matters, or for some or a portion of the expenses in the
investigation, defense, appeal or settlement of any proceeding, but not for
the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such claims, issues or matters or expenses to
which Indemnitee is entitled.
15. Non-Exclusivity.
(a) The right to indemnification pro-vided by or granted
pursuant to this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee is or may become en-titled under any statute,
provision of the Company's Certificate of Incorporation, Bylaws, agreement,
resolution or otherwise.
(b) It is the intent of the Company by this Agree-ment to
indemnify and hold harmless Indemnitee to the fullest ex-tent permitted by
law, so that if applicable law would permit the Company to provide broader
indemnification rights than are currently permitted, the Company shall
indemnify and hold harmless Indemnitee to the fullest extent permitted by
applicable law notwithstanding that the other terms of this Agreement would
provide for lesser indemnification.
16. Confidentiality. The Company and Indemnitee shall keep
confidential to the extent permitted by law and their fiduciary obligations
all information and determinations provided pursuant to or arising out of
the operations of this Agreement and the Company and Indemnitee shall
instruct their agents and employees to do likewise.
17. Counterparts. This Agreement may be executed in any number of
counter-parts, each of which shall constitute an origi-nal but all of which
taken together shall be deemed to constitute a single instrument.
18. Applicable Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of
Delaware.
19. Amendment. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless made in writing
signed by the Company and Indemnitee. Notwithstand-ing any amendment,
modification, termination or cancella-tion of this Agreement or any portion
hereof, Indemnitee shall be entitled to indemnification in accordance with
the provisions hereof with respect to any acts or omissions of Indemnitee
which occur prior to such amendment, modification, termination or
can-cellation.
20. Gender. All pronouns and variations thereof used in this
Agreement shall be deemed to refer to the masculine, feminine or neuter
gender, singular or plural, as the identity of the person, persons, entity
or entities referred to may require.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and signed as of the date and year first above written.
GRANT GEOPHYSICAL, INC.
By:
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Name:
Title:
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Indemnitee
