Exhibit 4.1
CERTIFICATE OF DESIGNATION
OF
SERIES B CONVERTIBLE PREFERRED STOCK
$0.001 Par Value
SUMMIT LIFE CORPORATION
Pursuant to Section 1032G of the
General Corporation Act of the State of Oklahoma
Pursuant to Section 1032 of the General Corporation Law of the State of
Oklahoma, the undersigned hereby certifies that the following resolution was
adopted by the Board of Directors of Summit Life Corporation, an Oklahoma
corporation (the "Company"), pursuant to a duly called meeting of the Board of
Directors on September 29, 2000:
RESOLVED, that pursuant to authority conferred on the Board of
Directors of the Company by its Amended and Restated Certificate of
Incorporation, a series of Preferred Stock, par value $.001 per share, is
created and the designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereof, are as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated "Series B Convertible Preferred Stock" (the "Series B Preferred
Stock") and the number of shares constituting such series shall be 1,000,000
shares of Series B Preferred Stock, with a par value of $.001 per share. There
has previously been created from the Five Million (5,000,000) shares of
preferred stock, par value $0.001, authorized under the Certificate of
Incorporation, a series of preferred stock designated as Series A Cumulative
Preferred Stock, par value $.001 per share (the "Series A Preferred Stock"),
pursuant to a Certificate of Designation filed with the Oklahoma Secretary of
State on May 11, 1999 (the "Series A Certificate of Designation").
SECTION 2. RANKING. As long as any shares of the Series B Preferred
Stock are outstanding, the Series B Preferred Stock will rank senior to the
Corporation's common stock, par value $0.01 (the "Common Stock") as to the
payment of dividends and senior to the Common Stock as to the payment of
distributions upon the Company's liquidation, winding-up and dissolution, and
will rank junior to the Series A Preferred Stock with respect to the payment of
dividends, and will rank pari passu to the Series A Preferred Stock with respect
to the payment of distributions upon the Company's liquidation, winding-up and
dissolution, subject, however, to the liquidation values stated in this
Certificate of Designation and the Series A Certificate of Designation.
SECTION 3. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of Senior
Dividend Stock (as defined in Section 13 hereof), each holder of Series B
Preferred Stock shall be entitled to receive, and shall so receive, dividends as
may be fixed by the board of directors pursuant to law, which shall be
noncumulative, and which shall be set aside and paid before any dividend shall
be set aside or paid upon the Junior Stock (as defined in Section 13 hereof).
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(B) The Board of Directors may fix a record date for the determination
of holders of shares of Series B Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
SECTION 4. VOTING RIGHTS. The holders of shares of Series B Preferred
Stock shall have no voting rights, except as provided by Section 11 hereof or as
may be specifically reserved to such holders by the Oklahoma General Corporation
Act:
SECTION 5. CERTAIN RESTRICTIONS.
(A) Until all declared and unpaid dividends and distributions on
outstanding shares of Series B Preferred Stock shall have been paid in full, the
Company shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of Junior Stock, PROVIDED, HOWEVER, that the Company may at any
time redeem, purchase or otherwise acquire shares of any such Junior
Stock in exchange for shares of any other Junior Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of Dividend Parity Stock (as defined in
Section 13 hereof), except dividends paid ratably on shares of Series B
Preferred Stock and shares of all such Dividend Parity Stock on which
dividends are payable or in arrears in proportion to the total amounts
to which the holders of such Series B Preferred Stock and all such
shares then entitled;
(iii) purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock or any shares of Dividend Parity
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 5,
purchase or otherwise acquire such shares at such time and in such manner.
SECTION 6. RETIRED SHARES. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued preferred stock and
may be reissued as part of a new series of preferred stock subject to the
conditions and restrictions on issuance set forth in the Certificate of
Incorporation of the Company creating a series of preferred stock or any similar
shares or as otherwise required by law.
SECTION 7. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Company, no
distributions shall be made (i) to the holders of shares of Junior Stock unless
the holders of Series B Preferred Stock shall have received $1 per share plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment. If, upon such liquidation,
dissolution or winding up, the amounts available for distribution to the holders
of Series B Preferred Stock and all Liquidation Parity Stock, shall be
insufficient to permit the payment in full to such holders of the preferential
amounts to which they are entitled, then such amounts shall be paid ratably
among the shares of Series B Preferred Stock and Liquidation Parity Stock in
accordance with the respective preferential amounts (including unpaid cumulative
dividends, if any) payable with respect thereto if paid in full.
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A consolidation or merger of the Company with or into any other
corporation or corporations, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation, or a sale of all or substantially all of the assets of the
Company, shall be deemed to be a liquidation, dissolution, or winding up of the
Company.
SECTION 8. REDEMPTION. The shares of Series B Preferred Stock shall be
redeemable, in whole or in part, at the option of the Company at any time after
a default by the holder(s) of the Series B Preferred Stock of any of such
holder(s)'s obligations under the Subscription Agreement relating to such
holder(s)'s subscription for the shares of Series B Preferred Stock (the
"Subscription Agreement").
SECTION 9. CONVERSION.
(A) Each share of Series B Preferred Stock may be converted, at any
time after March 31, 2003, into fully paid and nonassessable whole shares of
Common Stock of the Company on a 1-for-1 basis; provided, however, that no
conversion right shall exist if the holder of the Series B Preferred Stock
sought to be converted shall be in default of any of his obligations under the
Subscription Agreement; provided, further, that until the payment in full of the
promissory note executed by a holder of the Series B Preferred Stock pursuant to
the terms of his Subscription Agreement, the conversion right with respect to
such holder shall only be exercisable with respect to that number of shares of
Series B Preferred Stock as shall equal the product obtained by multiplying (x)
the total number of shares of Series B Preferred Stock subscribed by such holder
by (y) a fraction, the numerator shall be the amount of monies actually received
by the Company in payment of the aggregate principal subscription amount for the
Series B Preferred Stock subscribed by such holder (exclusive of any interest
paid with respect to such principal), and the denominator of which shall be the
total amount subscribed for by such holder.
(B) The Company shall issue new certificates representing such
converted securities as soon as reasonably practicable after receipt of duly
executed forms, with signatures guaranteed if required by the Company, effecting
such conversion. In case the number of shares of Series B Preferred Stock
represented by the certificate or certificates surrendered exceeds the number of
shares converted, the Company shall, upon such conversion, execute and deliver
to the holder thereof, at the expense of the Company, a new certificate or
certificates for the number of shares of Series B Preferred Stock represented by
the certificate or certificates surrendered which are not to be converted.
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(C) If the Company subdivides or combines the outstanding shares of
Common Stock into a greater or lesser number of shares of such Common Stock (and
a similar adjustment has not been made in respect of the Series B Preferred
Stock), the number of shares of Common Stock issuable upon conversion of each
share of Series B Preferred Stock shall be proportionately increased in case of
a subdivision or decreased in case of a combination, effective in all cases at
the close of business on the record date for each subdivision or combination. In
the event there is a recapitalization of the Company involving Common Stock or
Preferred Stock, or if the Company is consolidated with or merged into any other
Company or if it sells or disposes of all or substantially all of its assets to
any other person, provision shall be made as part of the terms of such
recapitalization, consolidation, merger, sale, or disposition such that each
holder of Series B Preferred Stock shall be entitled to receive the same kind
and amount of securities or assets as he would have received upon such
recapitalization, consolidation, merger, sale, or disposition if he had
converted his shares of Series B Preferred Stock into shares of Common Stock of
the Company immediately prior to the record date for such transaction. No
payment or adjustment shall be made upon any conversion on account of any cash
dividends on the Common Stock or Series B Preferred Stock which would be
delivered upon any such conversion, the Company, may at its sole option, in lieu
of delivering the fractional share thereof, pay to the holder surrendering
shares of the Series B Preferred Stock for conversion an amount in cash equal to
the current market price of such fractional interest as determined in good faith
by the Board of Directors of the Company.
SECTION 10. PIGGYBACK REGISTRATION RIGHTS. At any time after March 31,
2003, whenever the Company proposes to register any Common Stock for its own or
the account of others under the Securities Act of 1933, as amended, for a public
offering, other than (i) any shelf registration of shares to be used as
consideration for acquisitions of additional businesses by the Company and (ii)
registrations relating to employee benefit plans, the Company shall give each
holder of the Series B Preferred Stock prompt written notice of its intent to do
so. Upon the written request of any holder given within 15 business days after
receipt of such notice, the Company shall cause to be included in such
registration all shares of Common Stock into which the Series B Preferred Stock
is convertible (the "Conversion Securities" (including any shares of Common
Stock issued as a dividend or other distribution with respect to, or in exchange
for, or in replacement of such Conversion Securities) which any holder requests;
provided, however, if the Company is advised in writing in good faith by any
managing underwriter of an underwritten offering of the securities being offered
pursuant to any registration statement under this Section 10 that the number of
shares to be sold by persons other than the Company is greater than the number
of such shares which can be offered without adversely affecting the offering,
the Company may reduce pro rata the number of shares offered for the accounts of
such persons (based upon the number of shares held by such person) to a number
deemed satisfactory by such managing underwriter.
SECTION 11. AMENDMENT. The provisions of this Certificate of
Designation shall not hereafter be amended, either directly or indirectly, or
through merger or consolidation with another Company, in any manner that would
alter or change the powers, preferences or special rights of the Series B
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of at least a majority of the outstanding shares of Series B
Preferred Stock, voting separately as a class.
SECTION 12. FRACTIONAL SHARES. The Series B Preferred Stock may be
issued in fractions of a share, which fractions shall entitle the holder, in
proportion to such holder's fractional shares, to receive dividends, participate
in distributions, and to have the benefit of all other rights of holders of
Series B Preferred Stock.
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SECTION 13. CERTAIN DEFINITIONS. As used herein with respect to the
Series B Preferred Stock, the following terms shall have the following meanings:
(A) The term "Dividend Parity Stock" as used herein with respect to
Series B Preferred Stock shall be deemed to mean all other stock of the Company
ranking equally with the Series B Preferred Stock as to the payment of
dividends.
(B) The term "Junior Stock" as used herein with respect to Series B
Preferred Stock shall be deemed to mean the Common Stock and all other stock of
the Company ranking junior to the Series B Preferred Stock as to the payment of
dividends and the distribution of assets upon liquidation.
(C) The term "Liquidation Parity Stock" as used herein with respect to
Series B Preferred Stock shall be deemed to mean the Series A Preferred Stock
and all other stock of the Company ranking equally therewith as to distribution
of assets upon liquidation.
(D) The term "Senior Dividend Stock" as used herein with respect to
Series B Preferred Stock shall be deemed to mean the Series A Preferred Stock
and all other stock of the Company ranking senior to the Series B Preferred
Stock as to the payment of dividends.
IN WITNESS WHEREOF, Summit Life Corporation has caused this Certificate
to be signed and attested on this ___ day of September, 2000.
SUMMIT LIFE CORPORATION
By:_______________________________
Charles L. Smith, President
ATTEST:
By:________________________________
Quinton Hiebert, Secretary
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