SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report: (Date of earliest event reported): December 10, 1999
(December 2, 1999)
AMERICAN RESOURCES OFFSHORE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-21472 86-0713506
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
801 TRAVIS, SUITE 2100
HOUSTON, TEXAS 77002
(Address of Registrant's principal executive offices)
(713) 227-7660
(Registrant's telephone number, including area code)
3141 BEAUMONT CENTRE CIRCLE
SUITE 203
LEXINGTON, KENTUCKY 40513
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On December 2, 1999, American Resources Offshore, Inc., a Delaware
corporation (the "Company"), issued a press release announcing that it completed
its corporate reorganization through transactions with Blue Dolphin Exploration
Company, a Delaware corporation and wholly-owned subsidiary of Blue Dolphin
Energy Company ("BDEX"), and Fidelity Oil Holdings, Inc., a Delaware corporation
("Fidelity"). The Company, pursuant to an Investment Agreement dated as of July
30, 1999 (the "Investment Agreement"), issued and sold 39,509,457 shares (the
"Shares") of its common stock, par value $0.00001 per share (the "Common
Stock"), to BDEX for approximately $4.5 million. The Shares sold to BDEX
represent approximately 75% of the Company's outstanding Common Stock and voting
capital stock. The Company, pursuant to a Purchase and Sale Agreement dated as
of July 30, 1999 (the "Purchase Agreement") sold an undivided 80% interest in
its offshore Gulf of Mexico oil and gas properties to Fidelity for approximately
$24.2 million. The Company's remaining assets consist of an average 6%
non-operated working interest in eight producing properties and one proved
undeveloped property along with leasehold interests in 34 additional offshore
tracts.
On December 1, 1999, the Company held its annual meeting of stockholders.
Stockholders elected Ivar Siem, Michael J. Jacobson, John P. Atwood, Andrew R.
Agosto and Douglas L. Hawthorne as directors of the Company. Additionally,
stockholders voted upon, and approved or ratified, the following matters:
(i) The Investment Agreement under which the Company sold to BDEX a number of
shares of Common Stock equal to 75% of the combined voting power of all of
the Company's outstanding voting securities after the issuance of the
shares to BDEX.
Broker
For Against Abstain Non-votes
- ------------ -------------- --------- -----------
8,132,376 29,764 8,950 4,277,880
(ii) The Purchase Agreement under which the Company sold to Fidelity an
undivided 80% interest in all of the Company's assets in the Gulf of
Mexico.
Broker
For Against Abstain Non-votes
- ------------ -------------- --------- -----------
8,112,676 49,664 8,750 4,277,880
2
<PAGE>
(iii) The sale of Company's Appalachian oil and gas properties and operations
formerly owned by Southern Gas Co. of Delaware, Inc. ("Southern Gas") to
Nami Resources Company, L.L.C.
Broker
For Against Abstain Non-votes
- ------------ -------------- --------- -----------
8,130,764 31,248 9,078 4,277,880
(iv) The sale of all of the stock of the Company's wholly-owned
subsidiary that formerly owned its Appalachian Assets,
Southern Gas, to Southern Gas Holding L.L.C. which is
controlled by Leonard K. Nave who was one of the
Company's directors.
Broker
For Against Abstain Non-votes
- ------------ -------------- --------- -----------
8,127,122 34,368 9,600 4,277,880
(v) An amendment to the Company's Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation") to
increase the number of authorized shares of Common Stock from 50,000,000
to 70,000,000.
Broker
For Against Abstain Non-votes
- ------------ -------------- --------- -----------
12,237,110 133,065 14,650 64,145
(vi) An amendment to the Certificate of Incorporation to
eliminate Article Eleven to end the classification of the Board of
Directors so that all directors serve terms of one year or until their
successors are duly elected and qualified.
Broker
For Against Abstain Non-votes
- ------------ -------------- --------- -----------
8,074,296 52,653 18,050 4,303,971
In connection with the consummation of the transactions contemplated by
the Investment Agreement and the Purchase Agreement, the Company has relocated
its principal executive offices from Lexington, Kentucky to Houston, Texas. The
press release is filed as an exhibit hereto and is incorporated herein by
reference. The Investment Agreement and the Purchase Agreement were more fully
described in the Company's Current Report on Form 8-K dated August 2, 1999, and
filed
3
<PAGE>
as exhibits 10.99 and 10.98, respectively, to the Company's Current Report on
Form 8-K dated August 10, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Text of Press Release, dated December 2, 1999
99.2 Certificate of Amendment of Restated Certificate of
Incorporation
99.3 Second Restated Certificate of Incorporation
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN RESOURCES OFFSHORE, INC.
Date: December 10, 1999 By: /s/ G. BRIAN LLOYD
G. Brian Lloyd
Vice President and Treasurer
5
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
------- ----------------------
99.1 Text of Press Release, dated December 2, 1999
99.2 Certificate of Amendment of Restated Certificate
of Incorporation
99.3 Second Restated Certificate of Incorporation
6
AMERICAN RESOURCES OFFSHORE, INC.
NEWS RELEASE
FOR IMMEDIATE RELEASE December 2, 1999
HOUSTON, TEXAS - AMERICAN RESOURCES OFFSHORE, INC. (NASDAQ SYMBOL: GASS. OB)
American Resources Offshore, Inc. ("ARO") announced today that it has completed
its corporate restructuring with the closing of its previously announced
agreements with Blue Dolphin Exploration Company ("BDEX") and Fidelity Oil
Holdings, Inc. ("Fidelity"). BDEX is a wholly-owned subsidiary of Blue Dolphin
Energy Company (NASDAQ: BDCO), and Fidelity is a subsidiary of MDU Resources
Group, Inc. (NYSE: MDU). Pursuant to the Fidelity agreement, ARO sold an
undivided 80% interest in its Gulf of Mexico properties to Fidelity for
approximately $24.2 million. Pursuant to the BDEX agreement, ARO issued new
shares of common stock to BDEX representing a 75% ownership in ARO for
approximately $4.5 million. The combined proceeds were used to retire certain
indebtedness.
ARO's assets now consist of an average 6% non-operated working interest in eight
producing properties and one proved undeveloped property along with leasehold
interests in 34 additional offshore tracts, all located in the Gulf of Mexico
offshore Louisiana and Texas. The properties currently have estimated proven
reserves of approximately 5.8 billion cubic feet of natural gas equivalent. ARO
believes that significant probable and possible reserves and exploratory
drilling opportunities also exist.
Additionally, ARO announced that at its 1999 annual meeting of stockholders,
Ivar Siem, Michael J. Jacobson, John P. Atwood, Andrew R. Agosto and Douglas L.
Hawthorne were elected to serve as the Directors of the Company. The new
Officers of the Company are Ivar Siem, President; John P. Atwood, Vice President
and Secretary; G. Brian Lloyd, Vice President and Treasurer; and Roland B.
Keller, Vice President.
Rick Avare, President of ARO, said "The transactions with Blue Dolphin and
Fidelity mark the final step in ARO's reorganization. I am extremely pleased
with my staff's efforts in accomplishing the goal of preserving equity for our
stockholders on a go forward basis."
Certain of the statements included in this press release, which express a
belief, expectation or intention, as well as those regarding future financial
performance or results, or which are not historical facts, are "forward-looking"
statements as that term is defined in the Securities Act of 1933, as amended and
the Securities Exchange Act of 1934, as amended. The words "expect", "plan",
"believe", "anticipate", "project", "estimate", and similar expressions are
intended to identify forward-looking statements. These forward-looking
statements are not guarantees of future performance or events and such
statements involve a number of risks, uncertainties and assumptions, including
but not limited to industry conditions, prices of crude oil and natural gas,
regulatory changes, general economic conditions, interest rates, competition,
and other factors. Should one or more of these risks or uncertainties
materialize or should the underlying assumptions prove incorrect, actual results
and outcomes may differ materially from those indicated in the forward-looking
statements. Readers are cautioned not to place undue
<PAGE>
AMERICAN RESOURCES OFFSHORE, INC.
reliance on these forward-looking statements which speak only as of the date
hereof. The Company undertakes no obligation to republish revised
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
American Resources Offshore, Inc. is an independent producer of oil and gas.
Questions should be directed to G. Brian Lloyd, Vice President and Treasurer, at
the Company's offices in Houston, Texas, (713)227-7660.
299481.1
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
American Resources Offshore, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST. That a meeting of the Board of Directors of American Resources of
Offshore, Inc., resolutions were duly adopted setting forth the following
proposed amendments to the Restated Certificate of Incorporation of said
corporation, declaring said amendments to be advisable, and providing that said
amendments be presented for consideration by the corporation's stockholders at
the 1999 annual meeting of stockholders of the corporation. The resolutions
setting forth the proposed amendments are as follows:
RESOLVED, that subject to the approval of the corporation's stockholders,
that the first paragraph of Article Four of the corporation's Restated
Certificate of Incorporation be amended to read as follows:
"The aggregate number of shares of capital stock of all classes which the
Corporation shall have authority to issue is SEVENTY-THREE MILLION
(73,000,000), of which SEVENTY MILLION (70,000,000) shares having a par
value of $.00001 per share shall be of a class designated "Common Stock"
(or Common Shares"), ONE MILLION (1,000,000) shares of preferred stock
having a par value of $12.00 per share which shall be of a class
designated SERIES 1993 8% convertible preferred stock and TWO MILLION
(2,000,000) shares having a par value of $.00001 per share shall be of a
class designated "Preferred Stock" (or "Preferred Shares"). All shares of
the Corporation shall be issued for such consideration or considerations
as the Board of Directors may from time to time determine. The
designations, voting powers, preferences, optional or other special rights
and qualifications, limitations or restrictions of the above classes of
stock shall be as follows:"
RESOLVED, that subject to the approval of the corporation's stockholders,
that the corporation's Restated Certificate of Incorporation be amended to end
the classification of the Board of Directors into three classes by deleting
ARTICLE ELEVEN in its entirety.
<PAGE>
SECOND. That thereafter, the necessary number of shares required by
statute were voted in favor of said amendments at the 1999 Annual Meeting of the
stockholders of said corporation duly called and held on December 1, 1999 upon
notice given in accordance with Section 222 of the General Corporation Law of
the State of Delaware.
THIRD. That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said American Resources Offshore, Inc. has caused this
certificate to be signed by Rick G. Avare, its President and Chief Executive
Officer, this 1st day of December, 1999.
AMERICAN RESOURCES OFFSHORE, INC.
By: /s/ RICK G. AVARE
Rick G. Avare
President and Chief Executive Officer
SECOND RESTATED
CERTIFICATE OF INCORPORATION
OF
AMERICAN RESOURCES OFFSHORE, INC.
(PURSUANT TO SECTION 245 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE)
American Resources Offshore, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify that:
The name of the Corporation is AMERICAN RESOURCES OFFSHORE, INC. The
original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of Delaware on August 14, 1992 under the name AMERICAN
RESOURCES OF DELAWARE, INC. and the first Restated Certificate of Incorporation
of the Corporation was filed with the Secretary of the State of Delaware on
December 11, 1996.
The Second Restated Certificate of Incorporation of the Corporation only
restates and integrates, and does not further amend, the provisions of the
Corporation's Certificate of Incorporation as heretofore amended or
supplemented, and there is no discrepancy between those provisions and the
provisions of the Second Restated Certificate of Incorporation.
The Second Restated Certificate of Incorporation of the Corporation was
duly adopted by the directors of the Corporation, without a vote of
stockholders, in accordance with the provisions of Section 245 of the General
Corporation Law of the State of Delaware.
The text of the Certificate of Incorporation is hereby restated to read in
its entirety as follows:
ARTICLE ONE
The name of the Corporation is AMERICAN RESOURCES OFFSHORE, INC.
ARTICLE TWO
The registered office of the Corporation is located at 1209 Orange Street,
in the city of Wilmington, County of New Castle, in the State of Delaware. The
name of its registered agent at that address is The Corporation Trust Company.
<PAGE>
ARTICLE THREE
The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
Delaware.
ARTICLE FOUR
The aggregate number of shares of capital stock of all classes which the
Corporation shall have authority to issue is SEVENTY-THREE MILLION (73,000,000),
of which SEVENTY MILLION (70,000,000) shares having a par value of $.00001 per
share shall be of a class designated "Common Stock" (or "Common Shares"), ONE
MILLION (1,000,000) shares of preferred stock having a par value of $12.00 per
share which shall be designated SERIES 1993 8% CONVERTIBLE PREFERRED STOCK, and
TWO MILLION (2,000,000) shares having a par value of $.00001 per share shall be
of a class designated "Preferred Stock" (or "Preferred Shares"). All shares of
the Corporation shall be issued for such consideration or considerations as the
Board of Directors may from time to time determine. The designations, voting
powers, preferences, optional or other special rights and qualifications,
limitations, or restrictions of the above classes of stock shall be as follows:
I. SERIES 1993 8% CONVERTIBLE PREFERRED STOCK
(a) DIVIDENDS:
1. GENERAL OBLIGATION. When and as declared by the Board of
Directors, to the extent permitted by law, the Corporation shall pay to the
holders of the Series 1993 8% Convertible Preferred Stock (the "Series 1993
Preferred Stock") preferential dividends, as more fully set forth in this
Section a(1).
2. RATE AND PAYMENT DATA. Such dividends shall be payable
semi-annually on the fifteenth day of January and July in each year at the rate
of 8% per annum of the aggregate par value of the Series 1993 Preferred Stock.
To the extent that there are any unpaid dividends in any year, the amount of
unpaid dividends will accumulate with additional interest at the rate of 10% per
annum until paid. Such dividends shall be paid in Common Stock of the
Corporation on the basis of one share for each dollar of declared but unpaid
dividends (rounded to the nearest whole share for fractions of shares).
3. DISTRIBUTION OF PARTIAL DIVIDEND PAYMENTS. If at any time the
Corporation shall pay less dividends on the Series 1993 Preferred Stock than the
total amount of dividends then due with respect to the Series 1993 Preferred
Stock, such payment shall be distributed among the holders of the Series 1993
Preferred Stock so that an equal amount shall be paid with respect to each
outstanding share of Series 1993 Preferred Stock.
<PAGE>
4. RESTRICTION ON SERIES 1993 PREFERRED STOCK DIVIDENDS. The
Corporation shall not pay any dividends on the Series 1993 Preferred Stock if
(i) there is any interest due and unpaid on any debt instrument of the Company
or (ii) the declaration and payment violate any contract to which the
Corporation is a party.
5. RESTRICTION ON COMMON STOCK DIVIDENDS. The Corporation shall not
declare or pay any dividends on the Common Stock (or on any other equity
security of any kind which the Corporation shall at any time issue or be
authorized to issue) for any year (or portion of any year) for which a dividend
on the Series 1993 Preferred Stock has not been first declared and paid. In the
event that the Corporation shall have been required to have declared and paid a
dividend on the Series 1993 Preferred Stock and such dividend shall not have
been declared or paid or set apart for payment, the Corporation may not declare
or pay or set apart for the payment of dividends or make any other distributions
on, or make any payment on account of the purchase, redemption or retirement of
the Common Stock or any other stock of the Corporation ranking as to dividends
or distribution of assets upon liquidation, dissolution or winding up of the
Corporation junior to the Series 1993 Preferred Stock (other than dividends or
distributions paid in shares of Common Stock or other junior ranking stock)
until all required dividends on the Series 1993 Preferred Stock shall have been
declared and paid or set apart for payment.
(b) LIQUIDATION. Upon any liquidation, dissolution or winding up of the
Corporation, the holders of the Series 1993 Preferred Stock shall be entitled
(before any distribution or payment is made upon any equity security of any kind
which the Corporation shall at any time issue or be authorized to issue) to be
paid out of the assets of the Corporation available for distribution to its
stockholders an amount in cash equal to the amount of any declared but unpaid
dividends plus the par value of their shares of Series 1993 Preferred Stock (
the "Liquidation Value") and shall not be entitled to any further payment. If,
upon such liquidation, dissolution or winding up of the Corporation, the assets
to be distributed among the holders of the Series 1993 Preferred Stock shall be
insufficient to permit payment to the holders of the Series 1993 Preferred Stock
of the aggregate Liquidation Value of all shares of Series 1993 Preferred Stock
outstanding, then the assets of the Corporation to be distributed to the holders
of the Series 1993 Preferred Stock shall be distributed ratably among them based
upon the aggregate Liquidation Value of the number of shares held by them.
Written notice of such liquidation, dissolution or winding up, stating a payment
date, the amount of the payment and the place where the amounts distributable
shall be payable, shall be mailed by certified or registered mail, return
receipt requested, not less than sixty (60) days prior to the payment date
stated therein, to each record holder of any share of Series 1993 Preferred
Stock. Neither the consolidation or merger of the Corporation into or with any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, nor the reduction of the capital stock of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section (b).
(c) VOTING. Except as otherwise required by law, the holders of Series
1993
<PAGE>
Preferred Stock shall be entitled to participate in all actions of any nature
taken by the Corporation or the shareholders thereof and shall be entitled to
receive notice of any meeting of the shareholders of the Corporation. Each share
of Series 1993 Preferred Stock issued and outstanding, from time to time, shall
be entitled to four (4) votes.
In addition, so long as any shares of the Series 1993 Preferred Stock
remain outstanding, the affirmative vote or consent of the holders of at least a
majority of the shares of the Series 1993 Preferred Stock outstanding at the
time, given in person or by proxy, either in writing or at a meeting (voting as
a class with the holders of all other series of Series 1993 Preferred Stock
ranking on a parity with the Series 1993 Preferred Stock upon a liquidation,
dissolution or winding up of Corporation), will be necessary to permit, effect
or validate: (i) the authorization, creation or issuance, or any increase in
authorized or issued amount, of any class or series of stock ranking equal or
prior to the Series 1993 Preferred Stock with respect to the payment of
dividends, rights to redemption or the distribution of assets on liquidation,
dissolution or winding up of Corporation; (ii) the amendment, alteration or
repeal of any of the provisions of the Certificate of Incorporation, as amended,
which would materially or adversely affect any right, preference or privilege of
the Series 1993 Preferred Stock or of the holders thereof; or (iii) authorize
the merger or consolidation of Corporation if the effect of such merger or
consolidation would be to materially alter or change the powers, preference or
rights given to the holders of any shares of the Preferred Stock; provided,
however, the issuance of additional shares of Common Stock or the creation and
issuance of other series of Preferred Stock, ranking junior to the Series 1993
Preferred Stock with respect to dividends or the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences or privileges.
(d) CONVERSION.
1. GENERAL. Subject to adjustment as set forth in subsection 4
hereof, each share of the Series 1993 Preferred Stock shall be convertible, at
the option of the holder thereof, at any time after the date of issuance of such
share at the office of this Corporation or any transfer agent for the Series
1993 Preferred Stock, into one (1) share of fully paid and nonassessable shares
of Common Stock.
2. CONVERSION PRICE. The Conversion Price per share at which shares
of Common Stock shall be initially issuable upon conversion of any shares of
Series 1993 Preferred Stock shall be $.01, subject to adjustment as provided in
paragraph 4 hereof.
3. MECHANICS OF CONVERSION. Before any holder of Series 1993
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the
Series 1993 Preferred Stock, and shall give written notice by mail, postage
prepaid, to the Corporation at its principal corporate office, of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of
<PAGE>
Common Stock are to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series 1993
Preferred Stock or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of Series
1993 Preferred stock to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date. If the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities Act of
1993, the conversion may, at the option of any holder tendering Series 1993
Preferred Stock for conversion, be conditioned upon the closing with the
underwriter of the sale of securities pursuant to such offering, in which event
the person(s) entitled to receive the Common Stock issuable upon such conversion
of the Preferred Stock shall not be deemed to have converted such Series 1993
Preferred Stock until immediately prior to the closing of such sale of
securities.
4. ADJUSTMENT PROVISIONS. The number of shares of Common Stock
issuable upon the conversion of the Preferred Stock and the Conversion Price
shall be subject to adjustment as follows:
(i) In case the Corporation shall (i) pay a dividend in Common Stock
or securities convertible into, exchangeable for or otherwise entitling a holder
thereof to receive Common Stock (other than payments of Common Stock as interest
under the Plan), (ii) declare a dividend payable in cash on its Common Stock and
at substantially the same time shall offer its shareholders a right to purchase
new Common Stock (or securities convertible into, exchangeable for or other
entitling a holder thereof to receive Common Stock) from the proceeds of such
dividend all Common Stock so issued shall be deemed to have been issued as a
stock dividend, (iii) subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock, (iv) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, (v) issue by
reclassification of its Common Stock any shares of the Corporation, the number
of shares of Common Stock issuable upon conversion of the Series 1993 Preferred
Stock immediately prior thereto shall be adjusted so that the Holder of the
Series 1993 Preferred Stock shall be entitled to receive after the happening of
any of the events described above had such Series 1993 Preferred Stock been
converted immediately prior to the happening of such event or any record date
with respect thereto. Further, the number of shares of Common Stock payable in
dividends pursuant to Section (a) of Article Fourth hereof shall be subject to
adjustment as set forth in this subsection (4)(i) if the Corporation shall (x)
subdivide its outstanding shares of Common Stock into a greater number of shares
of Common Stock or (y) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock. Any adjustment made pursuant to this
subdivision shall become effective immediately after the record date in the case
of a stock dividend and shall become effective immediately after the effective
date in the case of a stock split, subdivision, combination or reclassification.
(ii) In case the Corporation shall distribute, without receiving
consideration
<PAGE>
therefor, to all holders of its Common Stock evidence of its indebtedness or
assets (excluding cash dividends other than as described in Subsection 4(i)),
then, in each such case, the number of shares of Common Stock thereafter
issuable upon the conversion of each Share of Series 1993 Preferred Stock shall
be determined by multiplying the number of shares of Common Stock theretofore
issuable upon the conversion of each Share of Series 1993 Preferred Stock, by a
fraction, of which the numerator shall be the then current market price per
share of Common Stock on the record date for such distribution, and of which the
denominator shall be such current market price per share of Common Stock less
the then fair value (as determined by the Board of Directors of the Corporation,
whose determination shall be conclusive) of the portion of the assets or
evidences of indebtedness so distributed per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date for the determination of
Stockholders entitled to receive such distribution.
(iii) Any adjustment in the number of shares of Common Stock
issuable hereunder otherwise required to be made by this Subsection 4(iii) will
not have to be adjusted If such adjustment would not require an increase or
decrease of one percent (1%) or more in the number of shares of Common Stock
issuable upon conversion of the Series 1993 Preferred Stock.
(iv) Whenever the number of shares of Common Stock issuable upon the
conversion of the Series 1993 Preferred Stock is adjusted, as herein provided,
the Conversion Price shall be adjusted (to the nearest cent) by multiplying such
Conversion Price immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of shares of Common Stock issuable upon the
exercise of each share of Series 1993 Preferred Stock immediately prior to such
adjustment, and of which the denominator shall be the number of shares of Common
Stock so issuable immediately thereafter.
(v) Whenever the number of shares of Common Stock issuable upon the
Conversion of the Preferred to the Conversion Price is adjusted as herein
provided, the Corporation shall, no less than ten (10) days prior to the event
requiring such adjustment, mail by first class mail, postage prepaid, to each
holder of the Series 1993 Preferred Stock written notice of such adjustment or
adjustments.
5. NO IMPAIRMENT. This Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
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
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section (d) and in taking of all such action as may
be necessary or appropriate in order to protect the Conversion Rights of the
holders of Series 1993 Preferred Stock against impairment.
<PAGE>
6. NO FRACTIONAL SHARES AND CERTIFICATES AS TO ADJUSTMENTS.
(i) No fractional shares shall be issued upon conversion of the
Series 1993 Preferred Stock or as dividends payable under the Series 1993
Preferred Stock, and the number of shares of Common Stock to be issued shall be
rounded to the nearest whole share. Whether or not fractional shares are
issuable upon such conversion shall be determined on the basis of the total
number of shares of Series 1993 Preferred Stock the holder is at the time
converting to Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or readjustment of the
Conversion Price of Series 1993 Preferred Stock pursuant to this Section (d)
this Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of such Series 1993 Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. This Corporation shall, upon written
request at any time of any holder of such Series 1993 Preferred Stock, furnish
or cause to be furnished to such holder a like certificate setting forth (A)
such adjustment or readjustment, (B) the Conversion Price at the time in effect,
and (C) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of a share of
Series 1993 Preferred Stock.
7. RESERVATION OF COMMON STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of effecting the
conversions of the shares of Series 1993 Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series 1993 Preferred Stock. If at any
time the number of authorized but unissued shares of Common Stock, in addition
to such other remedies as shall be available to the holder of Series 1993
Preferred Stock, this Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.
8. STATUS OF CONVERTED STOCK. In the event any shares of Series 1993
Preferred Stock shall be converted pursuant to Section (d) hereof, the shares so
converted shall be cancelled and shall not be issuable by the Corporation. The
Certificate of Incorporation of this Corporation shall be appropriately amended
to effect the corresponding reduction in the Corporation's authorized capital
stock.
(c) NOTICES
1. UPON CORPORATION. Any notice pursuant to the terms hereof to be
given or made by a holder of shares of Preferred Stock or upon the Corporation
shall be sufficiently given or made if sent by certified or registered mail,
postage prepaid, addressed (until another
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address is sent by the Corporation to the holder) as follows:
American Resources, Inc.
950 North Finance Center Drive
Suite 270
Tucson, Arizona 85710
2. UPON SERIES 1993 PREFERRED STOCK HOLDERS. Any notice pursuant to
the terms hereof to be given or made by the Corporation to or upon any holder of
shares of Series 1993 Preferred Stock shall be sufficiently given or made if
sent by certified or registered mail, postage prepaid, addressed (until another
address is sent by the holder to the Corporation) to the address of such holder
on the records of the Corporation.
3. REGISTRATION OF TRANSFER. The Corporation shall keep at its
principal office (or such other place as the Corporation reasonably designates)
a register for the registration of shares of Series 1993 Preferred Stock. Upon
the surrender of any certificate representing Series 1993 Preferred Stock at
such place, the Corporation shall, at the request of the registered holder of
such certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares of Series 1993 Preferred Stock represented by the
surrendered certificate (and the Corporation forthwith shall cancel such
surrendered certificate), subject to the requirements of applicable securities
laws. Each such new certificate shall be registered in such name and shall
represent such number of shares of Series 1993 Preferred Stock as shall be
requested by the holder of the surrendered certificate, shall be substantially
identical in form to the surrendered certificate, and the shares of Series 1993
Preferred Stock represented by such new certificate shall be entitled to
dividends from the date to which dividends shall have been paid on the shares
represented by the surrendered certificate at the rate and in the manner
applicable to such certificate.
II. OTHER PREFERRED STOCK
(a) ISSUANCE IN CLASS AND SERIES. Shares of Preferred Stock (other than
the Series 1993 Preferred Stock) may be issued in one or more classes or series
at such time or times as the Board of Directors may determine. All shares of any
one series shall have preferences, limitations and relative rights identical
with those of other shares of the same series and, except to the extent
otherwise provided in the description of such series, with those of other shares
of Preferred Stock.
(b) AUTHORITY OF BOARD FOR ISSUANCE. Authority is hereby expressly granted
to the Board of Directors to fix from time to time, by resolution or resolutions
providing for the establishment and/or issuance of any class or series of
Preferred Stock (other than the Series 1993 Preferred Stock), the designation of
such classes and series and the powers, preferences, and rights of the shares of
such classes and series, and the qualifications, limitations or restrictions
thereof, including the following:
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1. The distinctive designation and number of shares comprising such
class or series, which number may (except where otherwise provided by the Board
of Directors in creating such class or series) be increased or decreased (but
not below the number of shares then outstanding) from time to time by action of
the Board of Directors;
2. The rate of dividends, if any, on the shares of that class or
series, whether dividends shall be cumulative and, if so, from which date or
dates, whether dividends shall be payable in cash, property or rights, or in
shares of the Corporation, capital stock, and the relative rights of priority,
if any, of payment of dividends on shares of that class or series over shares of
any other class or series;
3. Whether the shares of that series shall be redeemable and, if so,
the terms and conditions of such redemption, including the date or dates upon or
after which they shall be redeemable, the event or events upon or after which
they shall be redeemable, whether they shall be redeemable at the option of the
Corporation, the stockholder or another person, the amount per share payable in
case of redemption (which amount may vary under different conditions and at
different redemption dates), whether such amount shall be a designated amount or
an amount determined in accordance with a designated formula or by reference to
extrinsic data or events and whether such amount shall be paid in cash,
indebtedness, securities or other property or rights, including securities of
any other corporation;
4. Whether that class or series shall have a sinking fund for the
redemption or purchase of shares of that class or series and, if so, the terms
and amounts payable into such sinking fund;
5. The rights to which the holders of the shares of that class or
series shall be entitled in the event of voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the Corporation, relative
rights of priority, if any, of payment of shares of that class or series over
shares of any other series or class;
6. Whether the shares of that series shall be convertible into or
exchangeable for cash, shares of stock of any other class or any other series,
indebtedness, or other property or rights, including securities of another
corporation, and, if so, the terms and conditions of such conversion or
exchange, including the rate or rates of conversion or exchange, and whether
such rate shall be a designated amount or an amount determined in accordance
with a designated formula or by reference to extrinsic data or events, the date
or dates upon or after which they shall be convertible or exchangeable, the
duration for which they shall be convertible or exchangeable, the event or
events upon or after which they shall be convertible or exchangeable, and
whether they shall be convertible or exchangeable at the option of the
Corporation, the stockholder or another person, and the method (if any) of
adjusting the rate of conversion or exchange in the event of a stock split,
stock dividend, combination of shares or similar event;
7. Whether the issuance of any additional shares of such class or
series, or of any shares of any other class or series, shall be subject to
restrictions as to issuance, or as to the
<PAGE>
powers, preferences or rights of any such other class or series; and
8. Any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions of such class or series, as the Board of Directors may deem
advisable and as shall not be inconsistent with the provisions of the
Corporation's Charter, as from time to time amended, and to the full extent now
or hereinafter permitted by the laws of the State of Delaware.
(c) DIVIDENDS. Payment of dividends shall be as follows on Preferred Stock
other than the Series 1993 Preferred Stock;
1. The holders of Preferred Stock of each class or series, in
preference to the holders of Common Stock, shall be entitled to receive, as and
when declared by the Board of Directors out of funds legally available therefor,
all dividends, at the rate for such class or series fixed in accordance with the
provisions of this Article Fourth and no more;
2. Dividends may be paid upon, or declared or set aside for, any
class or series of Preferred Stock in preference to the holders of any other
class or series of Preferred Stock in the manner determined by the resolutions
of the Board of Directors authorizing and creating such class or series;
3. So long as any shares of Preferred Stock shall be outstanding, in
no event shall any dividend, whether in cash or in property, be paid or declared
nor shall any distribution be made, on the Common Stock, nor shall any shares of
Common Stock be purchased, redeemed or otherwise acquired for value by the
Corporation, unless all dividends on all cumulative classes and series of
Preferred Stock with respect to all past dividend periods, and unless all
dividends on all classes and series of Preferred Stock for the then current
dividend period shall have been paid or declared, and provided for, and unless
the Corporation shall not be in default with respect to any of its obligations
with respect to any sinking fund for any class or series of Preferred Stock. The
foregoing provisions of this subparagraph (3) shall not, however, apply to any
dividend payable in Common Stock;
4. No dividend shall be deemed to have accrued on any share of
Preferred Stock of any class or series with respect to any period prior to the
date of the original issue of such share or the dividend payment date
immediately proceeding or following such date of the original issue, as may be
provided in the resolutions of the Board of Directors creating such class or
series. Preferred Stock shall not be entitled to participate in any dividends
declared and paid on Common Stock, whether payable in cash, stock or otherwise.
Accruals of dividends shall not pay interest.
(d) DISSOLUTION OR LIQUIDATION. In the event of any voluntary or
involuntary liquidation, dissolution of assets or winding up of the Corporation,
the holders of the shares of each class and series of Preferred Stock then
outstanding shall be entitled to receive out of the net assets of the
Corporation, but only in accordance with the preferences, if any, provided for
such
<PAGE>
class or series, before any distribution or payment shall be made to the holders
of Common Stock, the amount per share fixed by the resolution or resolutions of
the Board of Directors to be received by the holder of each such share on such
voluntary or involuntary liquidation, dissolution, distribution of assets or
winding up, as the case may be. If such payment shall have been made in full to
the holders of all outstanding Preferred Stock of all classes and series, or
duly provided for, the remaining assets of the Corporation shall be available
for distribution among the holders of Common Stock as provided in this Article
Fourth. If upon any such liquidation, dissolution, distribution of assets or
winding up, the net assets of the Corporation available for distribution among
the holders of any one or more classes or series of Preferred Stock which (i)
are entitled to a preference over the holders of Common Stock upon such
liquidation, dissolution, distribution of assets or winding up, and (ii) rank
equally in connection therewith, shall be insufficient to make payment for the
preferential amount to which the holders of such shares shall be entitled, then
such assets shall be distributed among the holders of each such series of
Preferred Stock ratably according to the respective amounts to which they would
be entitled in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
Neither the consolidation nor merger of the Corporation, nor the exchange,
sale, lease or conveyance (whether for cash, securities, or other property) of
all, substantially all or any part of its assets, shall be deemed a liquidation,
dissolution, distribution of assets or winding up of the Corporation within the
meaning of this provision.
(e) VOTING RIGHTS. Except to the extent otherwise required by law or
provided in the resolution of the Board of Directors adopted pursuant to
authority granted in this Article Fourth, the shares of Preferred Stock shall
have no voting power with respect to any matter whatsoever. The Board of
Directors may determine whether the shares of any class or series shall have
limited, contingent, full or no voting rights, in addition to the voting rights
provided by law and, if so, the terms of such voting rights. In no event shall
the Preferred Stock be entitled to more than one vote in respect of each share
of such stock.
ARTICLE FIVE
The following provisions are inserted for the management of the business
and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
1. The directors in their discretion may submit any contract or act
for approval or ratification at any annual meeting of the stockholders or at any
meeting of the stockholders called for the purpose of considering any such act
or contract and any contract or act that shall be approved or be ratified by the
vote of the holders of a majority of the stock of the Corporation which is
represented in person or by proxy at such meeting and entitled to vote thereat
(provided that a lawful quorum of stockholders be there represented in person or
by proxy shall be as valid and as binding upon the Corporation and upon all the
stockholders as though it had been
<PAGE>
approved or ratified by every stockholder of the Corporation, whether or not the
contract or act would otherwise be open to legal attack because of director's
interest, or for any other reason.
2. In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation; subject, nevertheless, to the provisions of the
statutes of Delaware, of this certificate, and to the By-Laws.
ARTICLE SIX
The Corporation may, to the full extent permitted by Section 145 of the
Delaware General Corporation Law, as amended from time to time, indemnify all
persons whom it may indemnify pursuant thereto.
ARTICLE SEVEN
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware, may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provision of section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this Corporation, as the case
may be, and also of this Corporation.
ARTICLE EIGHT
Election of directors need not be by written ballot unless the Bylaws of
the Corporation so provide.
ARTICLE NINE
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) 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 Bylaws of the Corporation.
ARTICLE TEN
<PAGE>
The Corporation, by its Board of Directors, reserves the right to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by law, and all rights
and powers conferred herein on stockholders, directors and officers are subject
to this reserved power.
ARTICLE ELEVEN
To the fullest extent permitted by the Delaware General Corporation Law as
the same exists or hereafter may be amended, no director of the corporation
shall be liable to this corporation or to its stockholders for monetary damages
for breach of fiduciary duty as a director.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed in its name and on its behalf by its duly authorized officer as of the
8th day of December, 1999.
AMERICAN RESOURCES OFFSHORE, INC.
By: /s/ G. BRIAN LLOYD
G. Brian Lloyd
Vice President and Treasurer
ATTEST:
/s/ JOHN P. ATWOOD
John P. Atwood
Secretary
