<PAGE>
As filed with the Securities and Exchange Commission on July 2, 1998
Registration No. 333-____
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ENERGY SEARCH, INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
TENNESSEE 280 FORT SANDERS WEST BLVD., SUITE 200 62-1423071
(State or Other KNOXVILLE, TN 37922 (I.R.S. Employer
Jurisdiction of (423) 531-6562 Identification Number)
Incorporation or
Organization)
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
RICHARD S. COOPER Copies of PATRICK R. SUGHROUE, ESQ.
ENERGY SEARCH, INCORPORATED Communications to: PATRICK R. SUGHROUE, P.C.
280 FORT SANDERS WEST BLVD., SUITE 200 3777 SPARKS DRIVE, SUITE 130
KNOXVILLE, TENNESSEE 37922 GRAND RAPIDS, MICHIGAN 49546
(423) 531-6562 (616) 940-3399
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
___________________
<PAGE>
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] ___________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Proposed Proposed
Shares Amount Maximum Maximum Amount of
to be to be Aggregate Price Aggregate Registration
Registered Registered Per Unit<F1> Offering Price<F1> Fee<F1>
<S> <C> <C> <C> <C>
Common Stock, 1,834,235 $9.00 $16,508,115 $4,869.89
no par value
<FN>
<F1> Pursuant to Rule 457(c), the price is estimated solely for the purpose
of calculating the registration fee and is based on the average of
high and low reported sales prices of the Common Stock of the
Registrant on The Nasdaq SmallCap Market on June 30, 1998.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE AN AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a)
OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION
8(a), MAY DETERMINE.
==============================================================================
<PAGE>
PROSPECTUS
[ENERGY SEARCH INCORPORATED LOGO]
1,834,235 Shares
ENERGY SEARCH, INCORPORATED
COMMON STOCK (NO PAR VALUE)
OFFERED BY CERTAIN SELLING SHAREHOLDERS
This Prospectus covers the offering for resale of 1,834,235
shares (the "Shares") of common stock, no par value (the "Common
Stock"), of Energy Search, Incorporated, a Tennessee corporation (the
"Company"), that are to be offered from time to time for the account
of certain shareholders of the Company named in this Prospectus under
"Selling Shareholders." These shares consist of shares of Common Stock
previously issued in certain private placement transactions, shares of
Common Stock issuable, if at all, upon the exercise of common stock
purchase warrants (the "Private Placement Warrants") issued by the
Company to placement and selling agents in connection with the private
placements, shares of Common Stock which were converted at the
Company's initial public offering from formerly outstanding Class A
and Class B preferred stock (the "Preferred Stock") of the Company and
shares of Common Stock granted to certain employees and agents of the
Company in consideration for services provided to the Company.
As of the date of this Prospectus, the Selling Shareholders own
approximately 1,834,235 shares of Common Stock or warrants to purchase
Common Stock, which represents approximately 49% of the shares of
Common Stock of the Company outstanding on the date of this
Prospectus. All of the 1,834,235 shares are registered for sale under
this Prospectus. The Company will receive no part of the proceeds of
sales of Shares made under this Prospectus. All expenses of
registration incurred in connection with an offering of the Shares are
being borne by the Company, except for any brokerage commission or
discounts and fees, expenses and disbursements of a Selling
Shareholder's counsel.
The Common Stock is quoted on The Nasdaq SmallCap Market under
the symbol "EGAS" and is listed on the Boston Stock Exchange under the
symbol "EYS." On June 30, 1998, the closing sale price of the Common
Stock on The Nasdaq SmallCap Market was $9.00 per share.
The Shares may be offered by the Selling Shareholders for sale
through underwriters or dealers or from time to time on The Nasdaq
<PAGE>
SmallCap Market, Boston Stock Exchange or otherwise, at prices then
obtainable. The Selling Shareholders and any broker executing selling
orders on behalf of the Selling Shareholders may be deemed to be
underwriters within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). Commissions received by underwriters
or by any such broker may be deemed to be underwriting commissions
under the Securities Act. See "Plan of Distribution."
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE MATTERS
DISCUSSED UNDER "RISK FACTORS" BEGINNING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 2, 1998
<PAGE>
AVAILABLE INFORMATION
Energy Search, Incorporated (the "Company") filed a Registration
Statement on Form S-3 to register with the Securities and Exchange
Commission (the "SEC") the Common Stock to be sold under this
Prospectus. This Prospectus is a part of that Registration Statement.
As allowed by SEC rules, this Prospectus does not contain all the
information you can find in the Registration Statement or the exhibits
to the Registration Statement.
In addition, the Company files annual, quarterly and special
reports, proxy statements, and other information with the SEC. You
may read and copy any reports, statements or other information the
Company files at the SEC's public reference rooms located at Judiciary
Plaza, 450 Fifth Street N.W., Room 1024, Washington, D.C.; Seven World
Trade Center, Suite 1300, New York, New York, and 500 W. Madison
Street, Suite 1400, Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.
The Company's SEC filings also are available to the public from
commercial document retrieval services and at the web site maintained
by the SEC at "http://www.sec.gov." The Company's proxy statements
and other information also can be inspected at the offices of Nasdaq,
1735 K. Street, Washington, D.C. 20006.
The Company's Common Stock is reported on The Nasdaq SmallCap
Market under the symbol "EGAS."
INCORPORATION BY REFERENCE
The SEC allows the Company to incorporate by reference certain
information into this Prospectus. This means that the Company can
disclose important information by referring to another document filed
separately with the SEC. The information incorporated by reference is
deemed to be part of this Prospectus, except for any information
superseded by information in this Prospectus. This Prospectus
incorporates by reference the documents set forth below that the
Company previously has filed with the SEC. These documents contain
important information about the Company and its finances.
<TABLE>
THE COMPANY'S SEC FILINGS (FILE NO. 001-12679) PERIOD
--------------------------------------------- ------
<S> <C> <C>
Annual Report on Form 10-KSB Year ended December 31, 1997
Registration Statement on Form 8-A Filed on January 22, 1997
</TABLE>
The Company also incorporates by reference the additional
documents that it files with the SEC under the Securities Exchange Act
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<PAGE>
of 1934, as amended (the "Exchange Act") between the date of this
Prospectus and the date that this offering terminates.
Documents incorporated by reference are available from the
Company without charge, excluding exhibits, unless the Company
specifically has incorporated by reference an exhibit in this
Prospectus. You may obtain documents incorporated by reference in this
Prospectus by requesting them in writing or by telephone at the
following address: Energy Search, Incorporated, Attention:
Secretary, 280 Fort Sanders West Boulevard, Suite 200, Knoxville,
Tennessee 37922; (800) 551-5810. To ensure timely delivery, any
request should be made five business days in advance.
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<PAGE>
THE COMPANY
Energy Search, Incorporated (the "Company") is an independent oil
and gas company engaged in the exploration, development, production,
and acquisition of oil and natural gas properties primarily in the
Appalachian basin area, including southeastern Ohio and southern West
Virginia. The Company's revenue is derived primarily from (i) the
drilling of oil and gas wells on a contract basis, (ii) the sale of
natural gas and crude oil from wells in which it has a working
interest, (iii) the transmission of natural gas through a pipeline and
gathering system owned by an affiliated partnership in which the
Company has an ownership interest, (iv) the management and operation
of oil and gas wells, and (v) the formation and management of oil and
gas partnerships ("Affiliated Drilling Partnerships").
In 1997, the Company shifted its focus from drilling primarily
for Affiliated Drilling Partnerships to developing reserves for its
own account. The Company financed the shift in its primary
operational focus with funds raised through its initial public
offering in January 1997 and private placements.
The Company's wholly owned subsidiary, Equity Financial
Corporation, provides investment advice and brokers and deals in
stocks, bonds and other securities in the East Tennessee Region. From
time to time, Equity Financial Corporation serves as placement agent
or participating selling agent with respect to the private placement
of the Company's securities.
The Company was organized as a Tennessee corporation in 1990.
Its principal executive offices are located at 280 Fort Sanders West
Boulevard, Suite 200, Knoxville, Tennessee 37922. The Company's
telephone number is (800) 551-5810.
RISK FACTORS
AN INVESTMENT IN SHARES OF COMMON STOCK OFFERED BY THIS
PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CONSIDER THE
FOLLOWING FACTORS IN ADDITION TO THE OTHER INFORMATION SET FORTH IN
THIS PROSPECTUS BEFORE MAKING A DECISION CONCERNING THE PURCHASE OF
THE SHARES.
RISKS ASSOCIATED WITH THE COMPANY
DEVELOPMENT OF ADDITIONAL RESERVES. The Company's future success
depends upon its ability to find or acquire additional natural gas and
oil reserves that are economically recoverable. Except to the extent
that the Company conducts successful exploration or development
activities or acquires properties containing proved reserves, the
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<PAGE>
proved reserves of the Company will generally decline as reserves are
produced. There can be no assurance that the Company will be able to
discover and exploit additional commercial quantities of oil and gas,
or that the Company will have success drilling productive wells or
acquiring underdeveloped properties at low finding costs.
NEED FOR ADDITIONAL CAPITAL OR FINANCING. The Company's present
funds may not be sufficient to develop fully the Company's oil and gas
properties or otherwise carry out the Company's business plan.
Development of the Company's oil and gas properties and execution of
the Company's business plan may require capital resources greater than
the resources currently available to the Company. The Company's
current arrangement for additional sources of capital is limited to
its working capital revolving line of credit and any extensions
thereof with Bank One, Texas, N.A. (the "Bank One Credit Facility").
There can be no assurance that this, or any other, sources of capital
will be available to the Company on acceptable terms, or at all, in
the future. The inability to obtain additional financing could have a
material adverse effect on the Company.
The capital needs of the Company have increased materially since
its inception. Before the Company's initial public offering on
January 24, 1997, substantially all of the Company's drilling capital
was raised through the offering of investment interests in affiliated
drilling partnerships to private investors (the "Affiliated Drilling
Partnerships"). These Affiliated Drilling Partnerships have been
sponsored by principals of the Company, as well as by the Company, and
have been marketed by Equity Financial Corporation ("EFC"), an NASD-member
broker-dealer and wholly owned subsidiary of the Company. It
is anticipated that a small portion of the Company's drilling capital
may in the future continue to be raised by the offering of investment
interests, on a private placement basis, in future Affiliated Drilling
Partnerships. To the extent the Company may depend on capitalization
through syndication of future Affiliated Drilling Partnerships, there
can be no assurance that future offerings will be successful or will
raise adequate capital for desired Company activities. Also, there is
no assurance that any other sources of capital will be available to
the Company.
DEPENDENCE ON KEY PERSONNEL. The Company depends to a large
extent on the abilities and continued participation of certain key
employees, including Charles P. Torrey, Jr., its chief executive
officer, Richard S. Cooper, its president, Robert L. Remine, its chief
financial officer, John M. Johnston, its vice president - exploration
and production and Mike W. Mooney, its chief operating officer. The
loss of any of these officers or other key employees could have a
material adverse effect on the Company's business. The Company has
arranged for $500,000 of "key man" term life insurance policies on the
lives of each of Messrs. Torrey, Remine and Cooper, and a $300,000
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<PAGE>
policy on the life of Mr. Johnston and has entered into written
employment contracts with Messrs. Torrey, Remine, Cooper, Johnston and
Mooney.
UNDEVELOPED ACREAGE MAY BE LOST. The Company's oil and gas
leases typically require the drilling of wells, payment of minimum
royalties or delay rentals or the continued production of oil or gas
in commercial quantities for the leases to remain valid and not lapse.
Typically, once a well is drilled and becomes commercially productive,
as long as commercial production from such lease continues, the lease
will not lapse and is deemed to be "held by production." The
termination of leases could have a material adverse effect on the
Company and its future prospects.
GEOLOGIST'S ESTIMATES OF RESERVES AND FUTURE NET REVENUE. There
are numerous uncertainties inherent in estimating quantities of proved
reserves and in projecting rates of production and timing of
development expenditures, including many factors beyond the control of
the producer. In addition, the estimates of future net revenues from
proved reserves of the Company and the present value thereof are based
on certain assumptions about future production levels, prices, and
costs that may not prove to be correct over time. The rate of
production from oil and gas properties declines as reserves are
depleted. Except to the extent the Company acquires additional
properties containing proved reserves, conducts successful exploration
and development activities or, through engineering studies, identifies
additional behind-pipe zones or secondary recovery reserves, the
proved reserves of the Company will decline as reserves are produced.
Future oil and gas production is therefore highly dependent upon the
Company's level of success in acquiring or finding additional
reserves. Actual future revenues, development expenditures, operating
expenses and quantities of recoverable natural gas and oil reserves
may vary substantially from the estimates. In addition, the Company's
reserves may be subject to downward or upward revision, based on
production history, results of future exploration and development,
prevailing oil and gas prices and other factors.
CONFLICTS OF INTEREST. The nature of the Company's activities in
the oil and gas business results in many situations in which conflicts
of interest may arise. In general, conflicts of interest are inherent
in oil and gas drilling programs involving non-industry participants
because transactions are entered into without arms-length negotiation.
The interests of the investors, on one hand, and those of the Company,
as managing general partner and driller-operator, on the other hand,
may be inconsistent in some respects or in certain instances. Failure
to adequately resolve such conflicts of interest appropriately could
result in liability or other adverse consequences to the Company.
The Company presently has no formal procedure to deal with conflicts
of interest but instead handles the evaluation and resolution of them
on a case-by-case basis taking into account all relevant facts and
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<PAGE>
circumstances. The Company owes a standard fiduciary duty to each
Affiliated Drilling Partnership, Energy Search Natural Gas Pipeline
Income L.P. (the "Pipeline Income Partnership"), the ESI Pipeline
Operating LP (the "Pipeline Operating Partnership"), and any future
partnership for which the Company is the managing general partner, or
serves in a similar capacity. Accordingly, the Company has been, and
will continue to be, obligated to exercise good faith, reasonable
business judgment and integrity in handling each such Partnership's
business and funds. If the Company were to violate its above-described duties,
the Company could be subject to legal redress that
could result in liability.
RISKS ASSOCIATED WITH THE OIL AND GAS INDUSTRY
RISKS OF OIL AND GAS ACTIVITIES. Significant risks are inherent
in the natural gas and oil business, including the drilling of dry and
unsuccessful wells, operating hazards and uninsured risks, intense
competition for attractive properties, governmental regulations,
volatile prices and other uncontrollable factors. Furthermore, oil
and gas drilling is speculative. The possibility always exists that
wells drilled will be non-productive. Even wells that are completed
may not produce enough natural gas or oil to pay out. Natural gas and
oil operations present risks of environmental contamination from
drilling operations and leakage from oil field storage or
transportation facilities. Spills of oil and other liquids could
occur that could create material liability to the Company for clean-up
expenses.
CURRENT OIL AND GAS MARKETS. There is substantial uncertainty as
to the prices at which natural gas and oil produced by the Company may
be sold, and it is possible that under some market conditions the
production and sale of oil and gas from some or all of the Company's
wells may not be economical. The availability of a ready market for
oil and gas and the prices obtained for oil and gas depend upon
numerous factors beyond the control of the Company, including
competition from other natural gas and oil suppliers and national and
international economic and political developments. The Company is not
subject to any gas price controls.
EXPLORATION AND DEVELOPMENT RISKS. Exploration and development
drilling activities are subject to greater risks of failure than those
associated with the ownership of producing properties. The drilling of
exploratory wells involves the greatest risks, since such wells are
located in unproved areas. The drilling of development wells, although
generally consisting of drilling in proven areas, may result in dry
holes or the failure to produce natural gas and oil in commercial
quantities. The drilling of development wells and exploratory wells
also involves the risk that unusual or unexpected formations and
pressures will be encountered, and other conditions will exist, that
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<PAGE>
could result in the Company incurring substantial losses as well as
liabilities to third parties or governmental entities.
PRICE VOLATILITY. Natural gas and oil prices may be quite
volatile, depending on numerous factors, including steps taken by the
Organization of Petroleum Exporting Countries, tensions in the Middle
East and weather conditions. The average gas prices received by the
Company were $2.34, $2.97 and $3.08 per Mcf in 1995, 1996 and 1997,
respectively, prior to reduction for royalties, severance taxes and
gathering and transportation charges. The average oil prices received
by the Company were $16.48, $19.26 and $18.06 per Bbl in 1995, 1996
and 1997, respectively.
OPERATING HAZARDS AND UNINSURED RISKS. Drilling activities are
subject to many risks, including the risk that no commercially
productive reservoirs will be encountered. There can be no assurance
that new wells drilled by the Company will be productive or that the
Company will recover all or any portion of its investment. Drilling
for oil and natural gas may involve unprofitable efforts, not only
from dry wells, but from wells that are productive but do not produce
sufficient net revenues to return a profit after drilling, operating
and other costs. The cost of drilling, completing and operating wells
is often uncertain. The Company's drilling operations may be
curtailed, delayed or canceled as a result of numerous factors, many
of which are beyond the Company's control, including title problems,
weather conditions, compliance with governmental requirements and
shortages or delays in the delivery of equipment and services. The
Company's future drilling activities may not be successful and, if
unsuccessful, may have a material adverse effect on the Company's
future results of operations and financial condition.
The Company's operations are subject to hazards and risks
inherent in drilling for and producing and transporting oil and
natural gas, such as fires, natural disasters, explosions,
encountering formations with abnormal pressures, blowouts, craterings,
pipeline ruptures and spills, uncontrollable flows of oil, natural gas
or well fluids, any of which can result in the loss of hydrocarbons,
environmental pollution, personal injury claims and other damage to
properties of the Company and others. The Company maintains insurance
against some but not necessarily all of the risks described above. In
particular, the insurance maintained by the Company does not cover
claims relating to failure of title to oil and natural gas leases,
trespass during survey acquisition or surface change attributable to
seismic operations and, except in limited circumstances, losses due to
business interruption. The Company may elect to self-insure if
management believes that the cost of insurance, although available, is
excessive relative to the risks presented. In addition, pollution and
environmental risks generally are not fully insurable. The occurrence
of an event that is not covered, or not fully covered, by insurance
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<PAGE>
could have a material adverse effect on the Company's business,
financial condition and results of operations.
COMPETITION AND MARKETS. The oil and natural gas industry is
highly competitive in all of its phases. The Company competes with
many other companies in the search for and acquisition of oil and
natural gas properties and leases for exploration and development, and
also competes with other companies in its activities as drilling
contractor and natural gas marketers. The Company's competitors
include numerous independent oil and natural gas companies, major
integrated oil and natural gas companies, individuals and drilling and
income programs. Many of these companies have substantially greater
financial, technical and other resources than the Company and have
been engaged in the exploration and production business for a much
longer time than the Company. Such companies may be able to pay more
for leases on oil and natural gas properties and exploratory
prospects, as well as to define, evaluate, bid for or purchase a
greater number of properties and prospects than the Company's
financial or human resources would permit. The Company will be
required to maintain and enhance its ability to conduct its
operations, to evaluate and select suitable properties and to
consummate transactions in a highly competitive environment.
Competition among oil and gas companies for favorable oil and natural
gas prospects can be expected to continue. It is anticipated that the
cost of acquiring oil and natural gas properties may increase
appreciably.
The Company competes with a number of other companies which offer
interests in drilling partnerships with a wide range of investment
objectives and program structures. Competition for investment capital
for both public and private drilling programs is intense.
COMPETITION FROM ALTERNATIVE ENERGY SOURCES. Substantially all
of the Company's reserves are natural gas reserves. Natural gas
competes with coal, oil, propane, butane, nuclear power and other
fuels in the heating and energy generation markets. Numerous factors,
all difficult to predict, affect the relative desirability or demand
at any point in time for any given fuel. The extent to which public
or legislative initiatives to develop and use alternative fuels will,
in the future, affect the demand for oil or natural gas cannot be
predicted at this time.
INDUSTRY CONDITIONS. In recent decades, there have been periods
of worldwide overproduction and underproduction of hydrocarbons as
well as periods of increased and relaxed energy conservation efforts.
Such conditions have resulted in periods of excess supply of, and
reduced demand for, crude oil on a worldwide basis and natural gas on
a domestic basis. These periods have been followed by periods of short
supply of, and increased demand for, crude oil and, to a lesser
extent, natural gas. The excess or short supply of crude oil and
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natural gas has placed pressures on prices and has resulted in
dramatic price fluctuations.
SHUT-IN WELLS AND CURTAILED PRODUCTION. In the past, production
from oil and natural gas wells (particularly gas wells) in many
geographic areas of the United States had been curtailed due to lack
of market demand, and it is possible that such curtailments may resume
in the future. Therefore, it is possible that the Company's wells may
have to be shut-in or that oil or gas produced from the wells may have
to be sold at less than favorable prices. Production also may be
delayed or wells shut-in in the event there is difficulty in securing
markets for production, logistical problems develop in the
transportation of natural gas from the wells or there are title
problems associated with the drillsites. Although it is anticipated
that a substantial amount of natural gas from the Company's Ohio wells
will be sold to the Pipeline Operating Partnership, an affiliate of
the Company, the agreement regarding the gathering and marketing of
natural gas between the Company, for itself and on behalf of
Affiliated Drilling Partnerships, and the Pipeline Operating
Partnership governing such arrangement will not protect the Company
from market or price risks.
REGULATION AND ENVIRONMENTAL MATTERS
GENERAL REGULATION. Oil and natural gas exploration, production
and related operations are subject to extensive rules and regulations
promulgated by federal, state and local agencies. Failure to comply
with such rules and regulations can result in substantial penalties.
The regulatory burden on the oil and gas industry increases the
Company's cost of doing business and affects its profitability.
Although the Company believes it is in substantial compliance with all
applicable laws and regulations, because such rules and regulations
frequently are amended or interpreted, the Company is unable to
predict the future cost or impact of complying with such laws.
Environmental enforcement efforts with respect to natural gas and
oil operations recently have increased and it can be anticipated that
such regulation will expand and have a greater impact on future
natural gas and oil operations. There is no assurance that laws and
regulations enacted in the future will not adversely affect the
Company's exploration for, and production and transmission of, oil and
natural gas. Such legislation and/or actions of local, state and
federal governments may have a material effect on the Company in the
future. To the best knowledge of management, the Company has complied
in all material respects with applicable regulatory requirements of
the states in which it operates. To date, the Company has received no
material notice of violation or complaint concerning its compliance
with federal, state or local laws respecting the environment. There
can be no assurance, however, that the Company's business operations
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will not result in violations of environmental laws or related
liabilities in the future.
STATE REGULATION. Natural gas and oil operations are regulated
by an agency of state government in every state of the United States.
Many state authorities require permits for drilling operations,
drilling bonds and reports concerning operation and impose other
requirements relating to the exploration and production of oil and
gas. Some states also have statutes or regulations addressing
conservation matters, including provisions for the pooling of oil and
gas properties, the establishment of maximum rates of production from
oil and gas wells and the regulation of spacing, plugging and
abandonment of such wells. The statutes and regulations also may
limit the rate at which oil and gas can be produced from certain
properties. In Ohio and West Virginia, where most of the Company's
natural gas and oil properties are located, such regulation is by the
Ohio Department of Natural Resources and the West Virginia Division of
Environmental Protection Office of Oil and Gas, respectively. Each of
these agencies has been granted broad regulatory and enforcement
powers which are likely to create additional financial and operational
burdens on natural gas and oil operations like those of the Company.
Ohio and West Virginia also have in place other pollution and
environmental control laws which have become increasingly burdensome
in recent years.
FEDERAL REGULATION. The Company's sales of natural gas are
affected by the availability, terms and cost of transportation. The
price and terms for access to pipeline transportation are subject to
extensive regulation. The Federal Energy Regulatory Commission
("FERC") regulates the transportation and sale for resale of natural
gas in interstate commerce pursuant to the Natural Gas Act of 1938 and
the Natural Gas Policy Act of 1978. In the past, the federal
government has regulated the prices at which oil and natural gas can
be sold. While sales by producers of natural gas, and all sales of
oil and natural gas liquids currently can be made at uncontrolled
market prices, Congress could reenact price controls in the future.
In recent years, FERC has undertaken various initiatives to
increase competition within the natural gas industry. As a result of
initiatives like FERC Order 636, issued in April 1992 and its progeny,
the interstate natural gas transportation and marketing system has
been substantially restructured to remove various barriers and
practices that historically limited non-pipeline natural gas sellers,
including producers, from effectively competing with interstate
pipelines for sales to local distribution companies and large
industrial and commercial customers. The most significant provisions
of Order No. 636 require that interstate pipelines provide
transportation separate or "unbundled" from their sales service, and
require that pipelines provide firm and interruptible transportation
service on an open access basis that is equal for all natural gas
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supplies. In many instances, the result of Order No. 636 and related
initiatives has been to substantially reduce or eliminate the
interstate pipelines' traditional role as wholesalers of natural gas
in favor of providing only storage and transportation services.
Although Order No. 636 has largely been upheld on appeal, several
appeals remain pending in related restructuring proceedings. It is
difficult to predict when these remaining appeals will be completed or
their impact on the Company.
FERC has announced several important transportation-related
policy statements and proposed rule changes, including a statement of
policy and a request for comments concerning alternatives to its
traditional cost-of-service ratemaking methodology to establish the
rates interstate pipelines may charge for their services. A number of
pipelines have obtained FERC authorization to charge negotiated rates
as one such alternative. In February 1997, FERC announced a broad
inquiry into issues facing the natural gas industry to assist FERC in
establishing regulatory goals and priorities in the post-Order No. 636
environment. While the changes being considered by federal and state
regulators would affect the Company only indirectly, they are intended
to further enhance competition in natural gas markets. Additional
proposals and proceedings that might affect the natural gas industry
are pending before Congress, FERC, state commissions and the courts.
The natural gas industry historically has been very heavily regulated;
therefore, there is no assurance that the less stringent regulatory
approach recently pursued by FERC and Congress will continue.
The price the Company receives from the sale of oil and natural
gas liquids is affected by the cost of transporting products to
markets. Effective January 1, 1995, FERC implemented regulations
establishing an indexing system for transportation rates for oil
pipelines, which, generally, would index such rates to inflation,
subject to certain conditions and limitations. The Company is not
able to predict with certainty the effect, if any, of these
regulations on its operations. However, the regulations may increase
transportation costs or reduce well head prices for oil and natural
gas liquids.
ENVIRONMENTAL REGULATION. The Company's operations and
properties are subject to extensive and changing federal, state and
local laws and regulations relating to environmental protection,
including the generation, storage, handling, emission, transportation
and discharge of materials into the environment, and relating to
safety and health. The recent trend in environmental legislation and
regulation generally is toward stricter standards, and this trend
likely will continue. These laws and regulations may require the
acquisition of a permit or other authorization before construction or
drilling commences; restrict the types, quantities and concentration
of various substances that can be released into the environment in
connection with drilling and production activities; limit or prohibit
-12-
<PAGE>
construction, drilling and other activities on certain lands lying
within wilderness, wetlands and other protected areas; require
remedial measures to mitigate pollution from former operations such as
plugging abandoned wells; and impose substantial liabilities for
pollution resulting from the Company's operations. The permits
required for various of the Company's operations are subject to
revocation, modification and renewal by issuing authorities.
Governmental authorities have the power to enforce compliance with
their regulations, and violators are subject to civil and criminal
penalties or injunction. Management believes that the Company is in
substantial compliance with current applicable environmental laws and
regulations, and that the Company has no material commitments for
capital expenditures to comply with existing environmental
requirements. Nevertheless, changes in existing environmental laws
and regulations or in interpretations thereof could have a significant
impact on the Company, as well as the oil and gas industry in general
and thus the Company is unable to predict the ultimate cost and
effects of such continued compliance in the future.
The Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") and comparable state statutes impose strict,
joint and several liability on certain classes of persons who are
considered to have contributed to the release of a "hazardous
substance" into the environment. These persons include the owner or
operator of a disposal site or sites where a release occurred and
companies that disposed or arranged for the disposal of the hazardous
substances released at the site. Under CERCLA such persons or
companies may be liable for the costs of cleaning up the hazardous
substances that have been released into the environment and for
damages to natural resources, and it is not uncommon for the
neighboring land owners and other third parties to file claims for
personal injury, property damage and recovery of response costs
allegedly caused by the hazardous substances released into the
environment. The Resource Conservation and Recovery Act ("RCRA") and
comparable state statutes govern the disposal of "solid waste" and
"hazardous waste" and authorize imposition of substantial civil and
criminal penalties for noncompliance. Although CERCLA currently
excludes petroleum from its definition of "hazardous substance," state
laws affecting the Company's operations impose clean-up liability
relating to petroleum and petroleum-related products. In addition,
although RCRA classifies certain oil field wastes as "non-hazardous,"
such exploration and production wastes could be reclassified as
hazardous wastes thereby making such wastes subject to more stringent
handling and disposal requirements.
The Company has acquired leasehold interests in numerous
properties that for many years have produced oil and natural gas.
Although the Company believes that the previous owners of these
interests used operating and disposal practices that were standard in
the industry at the time, hydrocarbons or other wastes may have been
-13-
<PAGE>
disposed of or released on or under the properties. In addition, most
of the Company's properties are operated by third parties whose
treatment and disposal or release of hydrocarbons or other wastes is
not under the Company's control. These properties and the wastes
disposed thereon may be subject to CERCLA, RCRA and analogous state
laws. Notwithstanding the Company's lack of control over properties
operated by others, the failure of the operator to comply with
applicable environmental regulations may, in certain circumstances,
adversely impact the Company.
The Federal Clean Water Act and analogous state laws require
permits to be obtained to authorize discharge into surface waters or
to construct facilities in wetland areas. With respect to certain of
its operations, the Company is required to maintain such permits or
meet general permit requirements. The Environmental Protection Agency
("EPA") has adopted regulations concerning discharges of storm water
runoff. This program requires covered facilities to obtain individual
permits, participate in a group or seek coverage under an EPA general
permit. The Company believes that it will be able to obtain, or be
included under, such permits, where necessary, and to make minor
modifications to existing facilities and operations that would not
have a material effect on the Company.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of (i) 25,000,000
shares of Common Stock, no par value; and (ii) 5,000,000 shares of
Preferred Stock, no par value, with such relative rights and
preferences as may be established by resolution of the board of
directors. As of June 17, 1998, 3,773,241 shares of Common Stock were
issued and outstanding and no shares of Preferred Stock were issued
and outstanding. For further information about the Company's
authorized capital stock, you should refer to the Company's reports
incorporated in this Prospectus by reference, as described above under
the caption"Incorporation by Reference."
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
the Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
The table sets forth certain information provided to the Company
by the following "Selling Shareholders" as of April 24, 1998, none of
whom is an executive officer or director of the Company, nor a
-14-
<PAGE>
beneficial owner of 5% or more of the Company's Common Stock. The
Company cannot determine the number of shares of Common Stock offered
by this Prospectus nor the post-sale percentage ownership of Common
Stock for each Selling Shareholder because sales, if any, will be
conducted based on a number of factors, including the price of the
Company's Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AS OF
NAME OF SELLING SHAREHOLDER APRIL 24, 1998<F1><F2>
- --------------------------------------------- --------------------
<S> <C>
Wheat First Securities CSDN Ben S. Adams IRA
A/C #1024-4987 6,000
Constance M. Adams 24,000
Allergy & Asthma Affiliates P/S/P Donald Ellenburg
TTEE U/A DTD 1-1-94 A/C #1101-1722 5,000
Robert B. Alley, DDS, TTEE Robert B. Alley, DDS,
PA Employees Pension & P/S Trust 10,000
Robert B. Alley DDS, TTEE 10,000
Robert B. Alley DDS PA Pension Plan & Profit
Sharing & Trust, Robert B. Alley Trustee 3,000
Robert C. Alley 2,000
Apel Steel Corp. 55,000
Hank R. Apel 2,000
Ronald H. Apel 30,000
Ronald H. Apel FBO Kurt Apel 10,000
R. Bruce Avery, MD, PC, P/S Plan Trust St. Company of
Knoxville, TTEE FBO R. Very, MD, PC, P/S
Plan A/C #5023-3066 10,000
Shirley B. Avery, MD, PC P/S Plan Trust UST Company
of Knoxville, TTEE FBO S.H. Very, MD, PC, P/S
Plan A/C #5023-3014 10,000
Tracy S. Ayala 500
-15-
<PAGE>
Paul A. Back 3,000
John Robert Baker 5,000
Howe Barnes Investments Inc. CSDN H. Arthur Woaler
IRA #888859791 3,000
Stephen T. Barron & Karen A. Eberle Jt Ten 4,000
David A. Barry Jr. & Gayle L. Barry Jt Ten 2,000
Delaware Charter Trust FBO Steven M. Bathgate Keogh 10,000
Steven M. Bathgate & Margaret M. Bathgate Jt Ten 10,000
Marjorie K. Bayer TTEE FBO Marjorie K. Bayer Trust
DTD 12/31/91 3,000
Beauchamp Family Trust 1,500
Roger E. Becker 3,000
Donald J. Bench Trust, Donald J. Bench Trustee 5,000
John T. Bible 112,000
Robert J. Bible 5,000
Tim Bible & Patricia Bible Jt Ten 6,000
Frank M. Boberek & Shirley A. Boberek Jt Ten 2,000
Timothy A. Boggess 600
Carl J. Brakebill, III 6,000
David G. Brown 3,000
Charles C. Bruner 11,000
Don Bunch 15,000
Daniel P. Cafazzo 5,000
Cambridge Holdings Ltd. 7,000
Carl E. Campbell & Ethel B. Campbell Jt Ten 4,000
J. Ed Campbell III 4,000
-16-
<PAGE>
J. Ed Campbell, Jr. 6,000
Philip D. Campbell 3,000
Caribou Bridge Fund LLC 14,286
Michael K. Carney 9,000
Judy Lee Carpenter 1,500
John E. Carrier, Jr. 1,500
Donald W. Carter 1,000
C & G Properties 3,000
A.R. Cantinella 26,000
A.R. & Marjorie Chandler TTEES FBO Chandler Revocable
Trust 3,000
Chucks Contract Labor Service 7,000
Jeffrey A. Collart TTEE FBO MPPP 1,500
Jeffrey A. Collart TTEE FBO Profit Sharing & Trust 1,500
Jeffrey A. Collart, DDS 16,000
Andrew S. Combs 5,000
Kathy B. Combs 10,000
Consult & Assist Ltd. Georg Lingenbrink 30,000
Wheat First Securities CSDN FBO Henry H. Cooper
IRA A/C #2428-0875 3,000
Daniel W. Cotton, MD 3,000
Charles H. Coward 2,000
Maynard D. Crowell & Viola S. Crowell Jt Ten 3,000
D & V Lousberg Co. 10,000
Arthur L. Davis & Shirley J. Davis Jt Ten 3,000
Jon C. Davis & Julie A. Caltrider Jt Ten 2,000
-17-
<PAGE>
Randy C. Davis 5,000
John E. Depersio, MD 29,000
Roy Downing TTEE FBO Downing Family Trust 3,000
Dale Michael Drury 11,000
James J. Dudley 10,000
Robert T. Durnell 3,000
Daniel S. Edmunds 9,482
Wheat First Securities CSDN FBO Carolyn S. Ellenburg
IRA A/C #3025-7215 1,800
Wheat First Securities CSDN FBO Donald T. Ellenburg IRA
A/C #3025-7218 9,400
Donald T. Ellenburg, MD 11,400
Henry T. Ellenburg and Faye Ellenburg 3,000
Henry T. Ellenburg & Faye Ellenburg Jt Ten 5,000
Blaine Enderson, Trustee University General & Trauma
Surgery P/S Plan 15,000
Karl Fillauer CSDN FBO David T. Fillauer 1,000
Karl D. Fillauer 11,000
Karl Michael Fillauer 1,000
William J. Finn 3,000
Alma L. Fluetsch 1,200
Louise Frankland & Anthony Shawn Frankland Jt Ten 3,000
Alphonse J. Furino 4,300
Robert G. Gass 5,000
Laverne H. Giger 10,000
Lois L. Gipson TTEE UA 6/21/79 Lois L. Gipson Trust #4170 3,000
-18-
<PAGE>
Elizabeth G. Goodrich TTEE FBO Elizabeth G. Goodrich
Trust DTD 8/23/89 6,000
Tim Gowder, TTEE OBGYN Associates P/S 10,000
Thomas C. Graber 3,000
Raymond L. Gray 2,000
Wheat First Securities CSDN FBO Bruce Green IRA
A/C #3680-3304 10,000
Bruce Q. Green & Betti H. Green Jt Ten 10,000
Betty M. Greene 2,000
James G. Grier & Patricia P. Grier Jt Ten 10,000
James Eldon Hall & Brenda L. Hall Jt Ten 3,000
Lincoln Trust Company CSDN FBO Charles Harbaugh
IRA A/C #60317985 4,600
Charles Harbaugh 5,000
Virgil L. Harville 6,000
James R. Harry 800
Elden Heinz, Jr. 3,000
Charles Herington TTEE FBO Zenith Lighting Money Purchase
Pension Plan 3,000
Charles E. Herington 1,500
Wheat First Securities CSDN FBO Hubert Hill IRA
A/C #4130-6175 2,500
Jerry C. Hill 20,000
Rick Hines 20,000
Gregory P. Holeman 3,000
Charles W. Holland & Shirley T. Holland Jt Ten 2,000
William S. Holmes 2,000
-19-
<PAGE>
G. Scott Howard 1,500
Ameritrade Inc. FBO George J. Hubsmith IRA
Rollover #288 018336 3,000
David Hultquist 26,000
Kent Thomas Hultquist 5,000
Wheat First Securities CSDN FBO Bobby L.
Humphreys, Jr. IRA A/C #4345-8482 2,000
William L. Hunter, III, TTEE William L. Hunter P/S Plan 20,000
William L. Hunter, III 40,000
Harlan G. Irmler & Connie S. Irmler Jt Ten 7,500
Ben G. Jarnagin 2,000
Elizabeth B. Jaynes 10,000
National Investor Services Corp. FBO Mark P. Jendrek 3,000
Elizabeth M. Jenkins CSDN FBO Caroline B. Jenkins 2,500
Elizabeth M. Jenkins 3,000
Allen Jenneman 6,500
Wheat First Securities CSDN Edgar H. Jessee
IRA A/C #4506-5743 9,200
H. Kenneth Johnson II & Carol B. Johnson Jt Ten 6,000
Delaware Charter Guarantee & Trust, TTEE FBO
Patricia L. Julian IRA A/C #4636-9659 4,600
Wheat First Securities CSDN FBO Richard Julian
IRA A/C #4637-0236 4,000
Richard E. Jung 1,500
Wheat First Securities CSDN FBO Virginia C. Kasper
IRA A/C #46672316 3,000
Dorothy C. Kehr TTEE FBO The Kehr Family Trust
DTD 7/16/91 5,000
-20-
<PAGE>
Keith M. Kimbrell, TTEE Cumberland Radiological Group, PC 10,000
Kerbs Law Properties 10,000
Terry L. Kerbs & Pamela L. Kerbs Jt Ten 10,000
Max Kindler & Anna Kindler Jt Ten 3,600
Terry King 3,000
Mitzi Kopotic 200
John F. Kotsianas 3,000
Gerd O. Krohn 6,000
Sidney H. Law 2,000
David S. Leever & Gary W. Leever & Forrest L. Leever
Jt Ten 3,000
Roy A. Lemasters 1,000
Victoria S. Lichtman 6,000
Wheat First Securities CSDN FBO Marion F. Love
IRA A/C #5169-6586 15,000
Ameritrade Inc. CSDN FBO Timothy G. Lundy IRA
Rollover #288 010217 3,000
Ralph C. Mahin TTEE FBO Lisa R. Champlain Trust
DTD 9/28/89 10,000
AG Edwards & Sons Inc. Custodian for
Jane C. Marquiss Sep IRA Account 15,000
Debra A. Martin 400
Tara G. Martin 1,500
Joe Mont McAfee 6,000
James F. McCloud & Mildred T. McCloud Jt Ten 5,000
Delaware Charter Trust CSDN FBO Eugene C. McColley IRA 3,000
Eugene C. McColley 5,000
James M. McCoy, MD 3,000
-21-
<PAGE>
Donald A. McElvaney & Mignon McElvaney Jt Ten 3,000
Alfred F. McFee 4,000
George B. McGuffin 10,000
Dashiell P. McKay 3,000
James T. McKay 35,150
Wheat First Securities CSDN FBO James T. McKay Sep IRA
A/C #5516-6065 3,000
T.E. McMaster 3,000
Thomas H. Metcalf TTEE OBGYN Associates of Oak Ridge 6,000
James E. Milas IRA Rollover Trust Old Kent Bank, TTEE
U/A/D 9/12/94 6,000
George E. Miller & Karen E. Miller Jt Ten 1,500
Frederick H. & Wanda F. Minks TTEES FBO The Minks
Family Revocable Living Trust DTD 12/1/92 5,000
Roswell & Wanda Monroe Family Trust DTD 1/31/90
Roswell & Wanda Monroe TTEES 3,000
Niel Montagino 4,000
Jack C. Moore 1,500
J. Henry Morgan 6,000
William R. Morton & Mary Lynn Morton 2,500
Thomas N. Murphy 3,000
Wheat First Securities CSDN FBO Glen E. Needham IRA
A/C #5930-3495 2,000
Eugene L. Neidiger 11,500
Regina L. Neidiger 2,900
Gary Neill 3,000
NI Securities Corp. 1,200
Michael L. Nixon & Ginger S. Nixon Jt Ten 3,000
-22-
<PAGE>
William J. Nooney 3,000
John C. Nowell 27,000
Tom Owens & Phyllis J. Owens Jt Ten 3,000
Oyen Family Joint Trust William Oyen & Coralyn S. Oyen
Trustees 6,000
Andrew S. Pakes 400
Palm States Equities 9,625
Robert L. Parrish 8,000
Perfection Chain Products, Inc. 6,000
Wheat First Securities, CSDN FBO Edward V. Pershing IRA
A/C #6297-5767 4,000
Natasha Persons 3,000
Ameritrade Inc. CSDN FBO Roy Persons IRA #288 002884 8,000
Scott W. Peters, MD 2,500
John Christian Peterson 3,000
Anthony B. Petrelli 11,000
Albert M. Petty & Cathy E. Petty Jt Ten 10,000
Will T. Pflanze, MD 2,000
Wheat First Securities CSDN FBO Barbara M. Phillips
IRA A/C #6327-4580 5,000
Ameritrade Inc. CSDN FBO David G. Phillips
IRA Rollover #288 013527 3,000
Wheat First Securities CSDN FBO William E. Phillips
IRA A/C #6341-5805 5,600
Richard J. Piccoli 3,000
Thomas F. Pierson PC 1,500
Ameritrade Inc. CSDN FBO Beverly A. Pitman IRA
Rollover #288 016363 3,000
-23-
<PAGE>
G. Keith Purkey 10,000
AG Edwards & Sons Inc. C/F Keith Purkey IRA
A/C #669 002459 030 1,000
AG Edwards & Son Inc. C/F Treva H. Purkey IRA
A/C #669 002475 030 1,000
Stanley Ranch 4,000
David B. Reath, Trustee, David B. Reath Retirement Plan 9,000
Fuad Reveiz 6,000
Vincent E. Rook 3,000
John M. Royer, MD 10,000
Claude L. Royston 6,000
Lawrence H. Saumers TTEE FBO Lawrence H. Saumers Trust
DTD 12/31/91 6,000
David Saylor & Jackie Saylor Jt Ten 6,000
George W. Schanen TTEE FBO George W. Schanen Revocable
Trust 4,000
James K. Scruggs 5,000
William A. (Pat) Scruggs 21,000
Janet M. Searl 3,000
Walter R. Secosky 3,000
Walter R. Secosky TTEE Secosky & Johnson PA PSP & Trust 6,000
Walter R. Secosky, DDS 6,000
Lincoln Trust Company CSDN FBO Dick Sena IRA
A/C 60057159 1,175
Dick L. Sena 3,000
Douglas Shoffner & Glenda Shoffner Jt Ten 20,000
Kenneth B. Smith & Rowena W. Smith Jt Ten 3,000
Robert G. Smith 10,000
-24-
<PAGE>
Nelson Edward Snellenberger II 4,000
Larrimett J. Spies 5,000
Nancy E. Sprague TTEE FBO Nancy E. Sprague Trust
DTD 5/26/93 7,000
Karen M. Stanhope TTEE FBO Karen M. Stanhope Revocable
Trust DTD 5/13/92 7,000
Carla G. Stewart 7,000
Wheat First Securities CSDN FBO Cory T. Strobel
IRA A/C #7599-1786 6,200
Patrick R. Sughroue 10,000
Brenda B. Suttles 400
Wheat First Securities CSDN FBO David H. Sutton
Sep/IRA A/C #7639-2712 2,000
Richard A. Swanson & Marilyn E. Swanson Jt Ten 10,000
Michael W. Swift & Leslie C. Swift Jt Ten 3,000
Alan L. Talesnick 3,000
Darrell Thomas & Beth Thomas Jt Ten 3,000
William F. Thomas & Bonnie M. Thomas Jt Ten 3,000
Wheat First Securities CSDN Roy M. Thompson IRA U/A
DTD 12/11/96 A/C #7800-9429 4,000
Derry M. Thompson 69,291
Dina Ticktin 3,000
Harold Ticktin TTEE FBO Harold Ticktin Second Restated
Living Trust 10,000
Robert Ticktin 5,000
Harold Ticktin TTEE FBO Harold Ticktin Second Restated
Living Trust 6,000
Beverly A. Tripple & Harvey D. Tripple Jt Ten 3,000
Frank S. Tsakeres 5,000
-25-
<PAGE>
Robert C. Tucker, Jr. 2,000
John J. Turk, Jr. 1,626
David L. Tuttle 1,000
Wheat First Securities CSDN FBO Darlene H. Vickers
IRA A/C 8038-7728 6,000
Wheat First Securities CSDN FBO Marvin H. Vickers
IRA A/C #8039-2774 8,000
Frank W. Visciano & Lorraine Visciano Jt Ten 3,000
Paul Wakefield 4,000
Paul H. Wakefield, MD 6,000
Margaret Walker 10,000
William W. Walker 1,500
Elizabeth Wall 10,000
Wheat First Securities CSDN Joseph Wallace IRA
A/C #6297-5748 5,000
Wheat First Securities CSDN FBO Robert E. Ward
IRA A/C #8155-7863 3,000
Robert E. Warner & Patricia J. Warner Jt Ten 1,500
Todd Wedel 10,000
Wheat First Securities CSDN FBO Willie Welch IRA
A/C #8256-4058 2,000
Robert Charles Werts & Patricia Schultz Werts Jt Ten 4,000
David W. Whalen and Sherry Ann Heater 2,000
Wheat First Securities CSDN Edgar H. Jessee IRA
R/O A/C #4506-5743 800
Ward S. Whelchel 6,000
Alan Whiton, MD, TTEE Alan Whiton MD PS Plan 5,000
O. Lee Wilson, III 2,000
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<PAGE>
Carol Wimberly 6,000
Gregg A. Woodall & Sherrye L. Woodall Jt Ten 2,000
Delaware Charter Guaranty & Trust TTEE FBO Douglas A.
Yoakley IRA A/C #8638-0530 2,000
Michael J. Zurhellen 5,000
Total 1,834,235
__________________
<FN>
<F1> Pursuant to SEC regulations, shares are deemed to be
"beneficially owned" by a person if such person, directly or
indirectly, has or shares the power to vote or dispose of such
shares or the right to acquire the power to vote or dispose of
such shares within 60 days, including any right to acquire shares
through the exercise of any option, warrant or right, regardless
of whether such person has any economic interest in such shares.
<F2> The above table represents shares believed by the Company, after
reasonable investigation, to be "beneficially owned" by the
persons indicated. It is possible that certain persons listed
above beneficially own additional shares held in street name.
The Company believes that none of the above persons beneficially
own more than 5% of the outstanding common stock of the Company.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
GENERAL. The Company anticipates that sales, if any, will be
made through normal market transactions. While not anticipated,
Selling Shareholders are not prohibited from selling shares from time
to time, in one or more transactions, that may involve block
transactions, on The Nasdaq SmallCap Market, the Boston Stock Exchange
or otherwise, at market prices prevailing at the time of sale, at
negotiated prices, or at fixed prices, that may be changed. Such sales
may be effected by the Selling Shareholders directly or through
brokers, agents, underwriters or dealers.
The Selling Shareholders are not restricted as to the number of
or price at which Shares may be sold at any one time. It is possible
that a significant number of Shares could be sold at the same time,
which may have an adverse effect on the market price of the Common
Stock. There are no contractual arrangements between any Selling
Shareholder and the Company with regard to the sale of the Shares.
Each Selling Shareholder will be subject to the applicable provisions
of the Exchange Act and the rules and regulations thereunder, as well
as applicable state securities laws.
-27-
<PAGE>
PROSPECTUS SUPPLEMENT. Upon being notified by a Selling
Shareholder that a particular offer to sell Shares is made where the
Selling Shareholder has made a material arrangement with a broker-dealer
for the sale of the Shares through a block trade, special
offer, exchange distribution, secondary distribution or any block
trade has taken place, to the extent required pursuant to Rule 424
under the Securities Act, the Company will file a Prospectus
Supplement with the SEC. The Prospectus Supplement will set forth (i)
the name of each Selling Shareholder; (ii) the number of shares
involved; (iii) the price at which the shares were sold; (iv) the
names of any participating brokers, dealers, agents or member firms
involved; (v) any discounts, commissions and other items paid as
compensation from, and the resulting net proceeds to, the Selling
Shareholder; and (vi) other facts material to the transaction.
DIRECT SALES BY SELLING SHAREHOLDERS. The Company anticipates
that the Selling Shareholders will sell shares over an extended period
of time through customary brokerage channels in which a broker
solicits purchasers. The Shares may be sold directly by the Selling
Shareholder to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act with respect
to any resale thereof. To the extent required by the Securities Act
and upon notification by the Selling Shareholder, the terms of any
such sales, including the terms of any bidding or auction process,
will be described in a Prospectus Supplement relating to such sale.
SALES BY UNDERWRITERS. If a Selling Shareholder utilizes
underwriters in a sale, the offered shares may be acquired by the
underwriters for their own account and resold from time to time in one
or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of
sale. The shares may be offered to the public either through
underwriting syndicates represented by one or more managing
underwriters or directly by one or more firms acting as underwriters.
The underwriter or underwriters with respect to a particular
underwritten offering to be named in a Prospectus Supplement relating
to such offering and, if an underwriting syndicate is used, the
managing underwriter or underwriters, will be set forth on the cover
of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to
conditions precedent and the underwriters will be obligated to
purchase all of the Offered Securities if any are purchased.
SALES BY DEALERS. If a Selling Shareholder utilizes dealers in
the sale of Shares in respect of which this Prospectus is delivered,
the Selling Shareholder will sell such Shares to the dealers as
principals. The dealers may then resell such Shares to the public at
varying prices to be determined by such dealers at the time of resale.
-28-
<PAGE>
The names of the dealers and the terms of the transaction will be set
forth in a Prospectus Supplement relating thereto. The Selling
Shareholder also may loan or pledge the Shares to a broker-dealer and
the broker-dealer may sell the Shares so loaned or upon a default the
broker-dealer may effect sales of the pledged Shares pursuant to this
Prospectus.
SALES BY AGENTS. Other than in normal market transactions, if a
Selling Shareholder uses an agent, the agent will be named, and the
terms of the agency and any commissions will be set forth, in a
Prospectus Supplement relating thereto. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
EXPENSES. The Company will bear all costs and expenses of the
registration of the Shares under the Securities Act and certain state
securities laws, other than fees of counsel for the Selling
Shareholder and any discounts or commissions payable with respect to
sales of the Shares. The Selling Shareholder will pay any transaction
costs associated with effecting any sales that occur.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for
the Company by Patrick R. Sughroue, P.C., of Grand Rapids, Michigan.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference from the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1997, have been audited by Plante
& Moran, LLP, independent public accountants, as stated in their
report that also is incorporated in this Prospectus by reference and
have been so incorporated in reliance upon the reports of such firm
given upon its authority as experts in accounting and auditing.
INDEMNIFICATION
The Company's Charter provides that a director shall not be
personally liable to the Company or its shareholders for monetary
damages for breach of the director's fiduciary duties. However,
monetary damages may not be eliminated for (i) breaches of the
director's duty of loyalty to the Company or its shareholders, (ii)
acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, or (iii) liability under the
Tennessee Business Corporation Act.
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<PAGE>
The Company's Bylaws provide that the Company is required to
indemnify directors and officers of the Company to the full extent
permitted by the laws of the State of Tennessee. The board of
directors is authorized to cause the Company to indemnify individuals
who are not officers and directors of the Company. The Company's
Bylaws further permit the board of directors to advance expenses of
defense to directors and officers of the Company.
Pursuant to the Placement Agent Agreement, dated September 10,
1997, as amended, between the Company and Neidiger, Tucker, Bruner,
Inc., the Company has agreed to indemnify each Selling Shareholder
against all loss, claim, damage, expense or liability to which each
Selling Shareholder may become subject under the Securities Act, the
Exchange Act or otherwise, arising from the Registration Statement, of
which this Prospectus is a part. Similarly, each Selling Shareholder
has agreed to severally, but not jointly, indemnify the Company, its
officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, or
Section 20(a) of the Exchange Act, against all loss, claim, damage or
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to
which they may become subject under the Securities Act, the Exchange
Act or otherwise, arising from information furnished in writing by the
Selling Shareholder or on the Selling Shareholder's behalf for
specific inclusion in the Registration Statement.
In connection with the Company's initial public offering, the
Company agreed to indemnify the underwriters against certain civil
liabilities, including liabilities under the federal securities laws.
If such indemnification is unavailable or insufficient, the Company
and the underwriters agreed to damage contribution arrangements based
upon the relative benefits received from the initial public offering
and the relative fault resulting in damages. In addition, certain
representatives of the underwriters who received warrants in the
initial public offering are entitled to indemnification from the
Company against certain civil liabilities, including liabilities under
the federal securities laws.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the opinion of
the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is therefore
unenforceable.
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<PAGE>
==============================================================================
No person has been authorized
to give any information or to
make any representation other
than as contained or
incorporated by reference in
this Prospectus in connection
with the securities offered
hereby. If given, such
information or representation
should not be relied upon as
having been authorized.
This Prospectus does not
constitute an offer of any
securities other than those
described on the cover page or
an offer to sell or a
solicitation of an offer to
buy within any jurisdiction to
any person to whom it is
unlawful to make such offer or
solicitation within such
jurisdiction. Neither the
delivery of this Prospectus
nor any sales made pursuant to
this Prospectus shall under
any circumstances create any
implication that there has
been no change in the
information contained herein
or in the affairs of Energy
Search, Incorporated since the
date of this Prospectus.
TABLE OF CONTENTS
Available Information. . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Description of Capital Stock . . . . . . . . . . . . . . . . . . . .11
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . .11
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . .11
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . .24
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . .26
<PAGE>
[ENERGY SEARCH INCORPORATED LOGO]
1,834,235 Shares of
Common Stock
==============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses payable by the Company in connection with the
issuance and distribution of the securities being registered are
estimated to be:
<TABLE>
<CAPTION>
<S> <C> <C>
Registration Fee . . . . . . . . . . . . . . $ 4,870.00
Legal Fees and Expenses. . . . . . . . . . . 4,000.00
Accountant's Fees and Expenses . . . . . . . 500.00
Printing Fees and Expenses . . . . . . . . . 500.00
TOTAL. . . . . . . . . . . . . . . . . . . . $ 9,870.00
</TABLE>
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Charter and Bylaws generally require the Company to
indemnify its directors and officers to the fullest extent permissible
under Tennessee law against all expenses (including attorneys' fees)
incurred in any proceeding (whether or not such proceeding was by or
in the right of the Company, a subsidiary or otherwise) in which they
were a party because of their position as a director or officer of the
Company or because they served at the request of the Company as a
director, officer, employee or agent of another corporation or entity.
The provision also provides for the advancement of litigation expenses
at the request of a director or officer under certain circumstances.
Tennessee law generally permits indemnification of expenses
incurred in the defense or settlement of a derivative or third-party
action, provided that there is a determination by a majority vote of
(a) a quorum of disinterested directors, or (b) if a quorum cannot be
obtained, by a majority vote of a committee of the board which
consists of at least two disinterested directors, or (c) if there are
no such directors or committee or if such directors or committee so
directs, by independent special legal counsel in a written opinion or
(d) by the shareholders, but shares owned by or voted under the
control of directors who are parties to the proceeding may not vote on
the determination, that the person seeking indemnification acted in
good faith and in a manner the person reasonably believed to be in (in
the case of action in an official capacity) or not opposed to (in the
case of action other than in an official capacity) the best interests
of the corporation. Without court approval, however, no
II-1
<PAGE>
indemnification may be made in respect of any derivative action in
which the person is adjudged liable to the corporation. Tennessee law
requires indemnification of expenses when the individual being
indemnified has successfully defended the action on the merits or
otherwise.
Item 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
3.1 Amended and Restated Charter of the Registrant
3.2 Bylaws of the Registrant
4.1 Specimen of Common Stock Certificate<F1>
4.2 Specimen of Redeemable Series A Common Stock Purchase
Warrant Certificate<F1>
4.3 Specimen of Underwriters' Warrant Certificate<F1>
4.4 Charter (See Exhibit 3.1)
4.5 Bylaws (See Exhibit 3.2)
5 Opinion of Patrick R. Sughroue, P.C.
23.1 Consent of Independent Accountant, Plante & Moran, LLP, CPA
23.2 Consent of Independent Petroleum Consultant, Wright &
Company, Inc.<F2>
23.3 Consent of Patrick R. Sughroue, P.C. (included in Exhibit 5.1)
- ----------------
[FN]
<F1> Previously filed with the Company's Registration Statement on
Form SB-2 (Registration No. 333-12755) filed with the Securities and
Exchange Commission, and here incorporated by reference.
<F2> Previously filed with the Company's Form 10-KSB Annual Report for
the fiscal year ended December 31, 1997, and incorporated herein by
reference.
</FN>
Item 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to
this registrant statement;
(i) To include any prospectus required by
Section 10(a) (3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the
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<PAGE>
aggregate, represent a fundamental change in the
information set forth in the registrant statement; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement
or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial BONA FIDE
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on July 2, 1998
ENERGY SEARCH, INCORPORATED
By /S/ RICHARD S. COOPER
Richard S. Cooper
Its President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
July 2, 1998 /S/ CHARLES P. TORREY, JR.
Charles P. Torrey, Jr.
Chief Executive Officer (Principal
Executive Officer) and Director
July 2, 1998 /S/ RICHARD S. COOPER
Richard S. Cooper
President and Director
July 2, 1998 /S/ ROBERT L. REMINE
Robert L. Remine
Secretary, Treasurer (Principal
Financial and Accounting Officer),
and Director
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<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED CHARTER
OF
ENERGY SEARCH, INCORPORATED
This Amended and Restated Charter has been duly adopted by the
shareholders of Energy Search, Incorporated, on June 17, 1998. The Amended
and Restated Charter supersedes the original Charter as amended and shall
be the Charter of the corporation. Pursuant to the provisions of Section
48-20-107 of the Tennessee Business Corporation Act, the undersigned
Corporation hereby submits this Amended and Restated Charter and states as
follows:
1. NAME. The name of the Corporation is Energy Search,
Incorporated.
2. ADDRESS. The complete address of the principal office of the
Corporation is: 280 Fort Sanders West Boulevard, Suite 200, Knoxville, Knox
County, Tennessee 37922.
3. REGISTERED AGENT. The complete name and address of the
registered agent of the Corporation is: Robert L. Remine, 280 Fort Sanders
West Boulevard, Suite 200, Knoxville, Knox County, Tennessee 37922.
4. AMENDMENTS. This Amended and Restated Charter contains the
following amendments to the Original Charter, as amended: (1) paragraphs
(a) and (b) of Article 5 have been amended in certain technical respects,
(2) paragraph (c) of Article 5 has been added, (3) paragraph (a) of Article
8 has been added, (4) paragraph (b) of Article 8 has been added, (5)
paragraph (c) of Article 8 has been added, (6) paragraph (d) of Article 8
has been added, (7) paragraph (e) of Article 8 has been added, (8) Article
9 has been amended, (9) Article 10 has been added and (10) Article 11 has
been added. The foregoing amendments required shareholder approval and
were duly adopted by the shareholders of the Corporation on June 17, 1998.
5. CAPITAL STOCK. Following is the description of the authorized
capital stock of the Corporation:
(a) COMMON STOCK
(i) GENERAL. The Corporation shall be authorized to issue
25,000,000 Common Shares. The Common Shares will have no par
value. The Common Shares will be equal in all respects. There
will be no preemptive rights, conversion rights, redemption
privileges or sinking funds with respect to the Common Shares.
Dividends on Common Shares may be paid if, as and when declared
by the Board of Directors out of funds legally available for
distributions and subject to the prior rights of holders of the
Preferred Shares, if any.
<PAGE>
(ii) VOTING RIGHTS. Holders of Common Shares will be
entitled to one vote for each issued and outstanding share held
of record at each meeting of Common Shareholders. There will be
no cumulative voting for the election of Directors.
(iii) LIQUIDATION. In any liquidation or distribution
of assets of the Corporation, whether voluntary or involuntary,
holders of the Common Shares will be entitled to receive pro rata
the assets remaining after creditors have been paid in full and
holders of the Corporation's Preferred Shares, if any, have
received their full liquidation preferences.
(b) PREFERRED STOCK. The Board of Directors is expressly
authorized at any time, and from time to time, to provide for the
issuance of up to 5,000,000 shares of preferred stock in one or more
series, each with such voting powers, full or limited, or without
voting powers, and with such designations, preferences and relative,
participating, conversion, optional or other rights, and such
qualifications, limitations or restrictions thereof, as shall be
stated in the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors, and as are not stated in
these Articles, or any amendments thereto, including (but without
limiting the generality of the foregoing) the following:
(i) The distinctive designation and number of shares
comprising such series, which number may (except where otherwise
provided by the Board of Directors in creating such 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.
(ii) The dividend rate or rates on the shares of such series
and the relation which such dividends shall bear to the dividends
payable on any other class of capital stock or on any other
series of preferred stock, the terms and conditions upon which
and the periods in respect of which dividends shall be payable,
whether and upon what conditions such dividends shall be
cumulative and, if cumulative, the date or dates from which
dividends shall accumulate.
(iii) Whether the shares of such series shall be
redeemable, and, if redeemable, whether redeemable for cash,
property or rights, including securities of any other
corporation, and whether redeemable at the option of the holder
or the Corporation or upon the happening of a specified event,
the limitations and restrictions with respect to such redemption,
the time or times when, the price or prices or rate or rates at
which, the adjustments with which and the manner in which such
shares shall be redeemable, including the manner of selecting
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<PAGE>
shares of such series for redemption if less than all shares are
to be redeemed.
(iv) The rights to which the holders of shares of such
series shall be entitled, and the preferences, if any, over any
other series (or of any other series over such series), upon the
voluntary or involuntary liquidation, dissolution, which rights
may vary depending on whether such liquidation, dissolution,
distribution or winding up is voluntary or involuntary, and, if
voluntary, may vary at different dates.
(v) Whether the shares of such series shall be subject to
the operation of a purchase, retirement or sinking fund and, if
so, whether and upon what conditions such fund shall be
cumulative or noncumulative, the extent to which and the manner
in which such fund shall be applied to the purchase or redemption
of the shares of such series for retirement or to other
corporation purposes and the terms and provisions relative to the
operation thereof.
(vi) Whether the shares of such series shall be convertible
into or exchangeable for shares of any other class or of any
other series of any class of capital stock of the Corporation,
and, if so convertible or exchangeable, the price or prices or
the rate or rates of conversion or exchange and the method, if
any, of adjusting the same, and any other terms and conditions of
such conversion or exchange.
(vii) The voting powers, full and/or limited, if any, of
the shares of such series, and whether and under what conditions
the shares of such series (alone or together with the shares of
one or more other series having similar provisions) shall be
entitled to vote separately as a single class, for the election
of one or more additional Directors of the Corporation in case of
dividend arrearages or other specified events, or upon other
matters.
(viii) Whether the issuance of any additional shares of
such series, or of any shares of any other series, shall be
subject to restrictions as to issuance, or as to the powers,
preferences or rights of any such other series.
(ix) Any other preferences, privileges and powers and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of such series, as
the Board of Directors may deem advisable and as shall not be
inconsistent with the provisions of these Articles.
6. FOR PROFIT CORPORATION. The Corporation is for profit.
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<PAGE>
7. PURPOSES. The purpose of the Corporation is to explore,
prospect, drill for, produce, market, sell, and deal in and with petroleum,
mineral animal, vegetable, and other oils, asphaltum, natural gas,
gasoline, naphthalene, hydrocarbons, oil shales, sulfur, salt, clay, coal,
minerals, mineral substances, metals, ores of every kind or other mineral
or non-mineral, liquid, solid, or volatile substances and products,
by-products, combinations and derivatives thereof, and to buy, lease, hire,
contract for, invest in, and otherwise acquire, and to own, hold, maintain,
equip, operate, manage, mortgage, create security interests in, deal in and
with, and to sell, lease, exchange, and otherwise dispose of oil gas,
mineral, and mining lands, wells, mines, quarries, rights, royalties,
overriding royalties, oil payments, and other oil, gas, and mineral
interests, claims, locations, patents, concessions, easements,
rights-of-way, franchises, real and personal property, and all interests
therein, tanks, reservoirs warehouses storage facilities, elevators,
terminals, markets, docks, piers, wharves, dry-docks, bulkheads,
pipelines pumping stations, tank cars, trains, automobiles, trucks, cars
tankers, ships, tugs, barges, boats, vessels, aircraft, and other vehicles,
crafts, or machinery for use on land, water, or air, for prospecting,
exploring, and drilling for, producing, gathering, manufacturing, refining,
purchasing, leasing, exchanging, or otherwise acquiring, selling,
exchanging, trading for, or otherwise disposing of such mineral and
non-mineral substances; and to do engineering and contracting and to
design, construct, drill, bore, sink, develop, improve, extend, maintain,
operate, and repair wells, mines, plants, works, machinery, appliances,
rigging, casing, tools, storage, and transportation lines and systems for
this Corporation and other persons, associations, or corporations. To
establish and maintain a drilling business with authority to own and
operate drilling rigs, machinery, tools, or apparatus necessary in the
boring or otherwise sinking of wells for the production of oil, gas, or
water; to construct or acquire by lease or otherwise and to maintain and
operate pipelines for the conveyance of oil and natural gas, oil storage
tanks and reservoirs, and tank cars of all kinds tank steamers, and other
vessels, wharves, docks, warehouses, storage houses, loading racks, and all
other convenient instrumentalities for the shipping and transportation of
crude or refined petroleum or natural gas and all other volatile, solid, or
liquid mineral substances in any and all forms; to manufacture, buy, sell,
lease, let, and hire machines and machinery, equipment tools, implements,
and appliances, and all other property, real and personal, useful or
available in prospecting for an in producing, transporting, storing,
refining, or preparing for market, petroleum and natural gas and all other
volatile and mineral substances and their products and by-products and of
all articles and materials in any way resulting from or connected
therewith; to purchase, lease construct, or otherwise acquire, exchange,
sell, let, or otherwise dispose of, own, maintain, develop, and improve any
and property, real or personal, plants, refineries, factories, warehouses,
stores, and buildings of all kinds useful in connection with the business
of the Corporation including the drilling for oil and gas wells or mining
in any manner or by any method permitted by law on such real property; and
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<PAGE>
to conduct any other business enterprises not contrary to the laws of the
state of Tennessee.
8. DIRECTORS. Members of the Board of Directors of the Corporation
shall be selected, replaced, and removed as follows:
(a) NUMBER OF DIRECTORS. The number of the Directors of the
Corporation shall be fixed from time to time by resolution adopted by
the affirmative vote of at least two-thirds (2/3) of the entire Board
of Directors but shall not be less than three.
(b) CLASSIFICATION. The Board of Directors shall be divided
into three classes as nearly equal in number as possible, with the
term of office of one class expiring each year. At each annual
meeting of the shareholders, the successors of the class of Directors
whose term expires at that meeting shall be elected to hold office for
a term expiring at the annual meeting of shareholders held in the
third year following the year of their election.
(c) NOMINATIONS OF DIRECTOR CANDIDATES.
(i) Nominations of candidates for election for Directors of
the Corporation at any meeting of shareholders called for
election of Directors (an "Election Meeting") may be made by the
Board of Directors or by any shareholder entitled to vote at such
Election Meeting.
(ii) Nominations made by the Board of Directors shall be
made at a meeting of the Board of Directors, or by written
consent of the Directors in lieu of a meeting, not less than 20
days prior to the date of the Election Meeting, and such
nominations shall be reflected in the minute books of the
Corporation as of the date made.
(iii) Any shareholder who intends to make a nomination
at the Election Meeting shall deliver, not less than 120 days
prior to the date of the Election Meeting in the case of an
annual meeting, and not more than 7 days following the date of
notice of the meeting in the case of a special meeting, a notice
to the Secretary of the Corporation setting forth (A) the name,
age, business address and residence address of each nominee
proposed in such notice; (B) the principal occupation or
employment of each such nominee; (C) the number of shares of
capital stock of the Corporation which are beneficially owned by
each such nominee; (D) a statement that each such nominee is
willing to be nominated; and (E) such other information
concerning each such nominee as would be required under the rules
of the Securities and Exchange Commission in a proxy statement
soliciting proxies for the election of such nominees.
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<PAGE>
(iv) If the chairman of the Election Meeting determines that
a nomination was not made in accordance with the foregoing
procedures, such nomination shall be void and, upon the
chairman's instruction, all votes cast in favor of a person so
nominated shall be disregarded.
(d) VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Subject to the
rights of the holders of any series of preferred stock then
outstanding, any vacancy occurring in the Board of Directors caused by
resignation, removal, death, disqualification, or other incapacity,
and any newly created directorships resulting from an increase in the
number of Directors, shall be filled by a majority vote of Directors
then in office, whether or not a quorum. Each Director chosen to fill
a vacancy or a newly created directorship shall hold office until the
next election of Directors by the shareholders. When the number of
Directors is changed, any newly created or eliminated directorships
shall be so apportioned by the Board of Directors among the classes as
to make all classes as nearly equal in number as possible. No
decrease in the number of Directors constituting the Board of
Directors shall shorten the term of any incumbent Director.
(e) REMOVAL. Any Director may be removed from office at any
time, but only for cause, and only if removal is approved as set forth
below.
Except as may be provided otherwise by law, cause for removal
shall be construed to exist only if: (i) the Director whose removal is
proposed has been convicted of a felony by a court of competent
jurisdiction and such conviction is no longer subject to direct
appeal; (ii) such Director has been adjudicated by a court of
competent jurisdiction to be liable for negligence or misconduct in
the performance of his duty to the Corporation in a matter of
substantial importance to the Corporation and such adjudication is no
longer subject to direct appeal; (iii) such Director has become
mentally incompetent, whether or not so adjudicated, which mental
incompetency directly affects his ability as a Director of the
Corporation; or (iv) such Director's actions or failure to act are
deemed by the Board of Directors to be in derogation of the Director's
duties.
9. INDEMNIFICATION. Directors of the Corporation shall be
indemnified as of right to the fullest extent now or hereafter permitted by
law in connection with any actual or threatened civil, criminal,
administrative or investigative action, suit or proceeding (whether brought
by or in the name of the Corporation, a subsidiary, or otherwise) arising
out of their service as a Director or in any other capacity to the
Corporation or a subsidiary, or to another organization at the request of
the Corporation or a subsidiary. Persons who are not Directors of the
Corporation may be similarly indemnified in respect of such service to the
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<PAGE>
extent authorized at any time by the Board of Directors of the Corporation.
The Corporation may purchase and maintain insurance to protect itself and
any such Director or other person against any liability asserted against
him and incurred by him in respect of such service whether or not the
Corporation would have the power to indemnify him against such liability by
law or under the provisions of this paragraph. The provisions of this
Article 9 shall be applicable to actions, suits or proceedings, whether
arising from acts or omissions occurring before or after the adoption
hereof, and to Directors and other persons who have ceased to render such
service, and shall inure to the benefit of the heirs and personal
representatives of the Directors, and other persons referred to in this
paragraph.
10. LIMITATION OF DIRECTOR LIABILITY. No Director of the Corporation
shall be personally liable to the Corporation or its shareholders for
monetary damages for breach of the Director's fiduciary duty. However,
this Article 10 shall not eliminate or limit the liability of a Director
for any breach of duty, act or omission for which the elimination or
limitation of liability is not permitted by the Tennessee Business
Corporation Act, as amended from time to time. No amendment, alteration,
modification or repeal of this Article 10 shall have any effect on the
liability of any Director of the Corporation with respect to any act or
omission of such Director occurring prior to such amendment, alteration,
modification or repeal.
11. BUSINESS COMBINATIONS. The Board of Directors shall not
initiate, approve, adopt, or recommend any offer of any party other than
the Corporation to make a tender or exchange offer for any equity security
of the Corporation, or to engage in any Business Combination, as defined in
paragraph (b) below, unless and until it shall have first evaluated the
proposed offer and determined in its judgment that the proposed offer would
be in compliance with all applicable laws. In evaluating a proposed offer
to determine whether it would be in compliance with law, the Board of
Directors shall consider all aspects of the proposed offer, including the
manner in which the offer is proposed to be made, the documents proposed
for the communication of the offer, and the effects and consequences of the
offer if consummated, in light of the laws of the United States of America
and affected states and foreign countries. In connection with this
evaluation, the Board may seek and rely upon the opinion of independent
legal counsel, and may test the legality of the proposed offer in any
state, federal or foreign court or before any state, federal or foreign
administrative agency which may have jurisdiction. If the Board of
Directors determines in its judgment that a proposed offer would be in
compliance with all applicable laws, the Board of Directors shall then
evaluate the proposed offer and determine whether the proposed offer is in
the best interests of the Corporation and its shareholders, and the Board
of Directors shall not initiate, approve, adopt or recommend any such offer
which in its judgment would not be in the best interests of the Corporation
and its shareholders.
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<PAGE>
(a) FACTORS. In evaluating a proposed offer to determine
whether it would be in the best interests of the Corporation and its
shareholders, the Board of Directors shall consider all factors which
it deems relevant including:
(i) The adequacy and fairness of the consideration to be
received by the Corporation and its shareholders under the
proposed offer, taking into account the trading price of the
Corporation's stock immediately prior to the announcement of the
proposed offer, the historical trading prices of the
Corporation's stock, the price that might be achieved in a
negotiated sale of the Corporation as a whole, premiums over the
trading price of their securities which have been proposed or
offered to other companies in the past in connection with similar
offers, and the future prospects of the Corporation;
(ii) The possible social and economic impact of the proposed
offer and its consummation on the Corporation and its employees,
customers and suppliers;
(iii) The possible social and economic impact of the
proposed offer and its consummation on the communities in which
the Corporation and its subsidiaries operate or are located;
(iv) The business and financial conditions and earning
prospects of the offering party, including, but not limited to,
debt service and other existing or likely financial obligations
of the offering party;
(v) The competence, experience and integrity of the
offering party and its management; and
(vi) The intentions of the offering party regarding the use
of the assets of the Corporation to finance the transaction.
(b) DEFINITION OF BUSINESS COMBINATION. For purposes of this
Article, the term "Business Combination" shall mean:
(i) Any merger or consolidation of the Corporation with or
into another person or entity;
(ii) The sale, exchange, lease, mortgage, pledge, transfer
or other disposition (in a single transaction or a series of
related transactions) of all or substantially all of the assets
of the Corporation;
(iii) The adoption of any plan or proposal for the
liquidation or dissolution of the Corporation;
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(iv) Any transactions or series of related transactions
having, directly or indirectly, the same effect as any of the
foregoing;
(v) Any agreement, contract or other arrangement providing
for any of the transactions described in this definition of
Business Combination.
12. This Amended and Restated Charter supersedes the original Charter
of the Corporation and all prior amendments and restatements thereto.
I, the President of Engergy Search, Incorporated, sign my name this
this ______ day of _____________, 1998.
ENERGY SEARCH, INCORPORATED
/s/Richard S. Cooper
Richard S. Cooper
President
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EXHIBIT 3.2
BYLAWS
OF
ENERGY SEARCH, INCORPORATED
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office of the
corporation shall be in the City of Knoxville, County of Knox, State of
Tennessee.
SECTION 2. OTHER OFFICES. The corporation may have offices at
such places, both within and without the State of Tennessee, as the Board
of Directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. TIMES AND PLACES OF MEETINGS. All meetings of the
shareholders shall be held, except as otherwise provided by statute, the
Charter or these Bylaws, at such time and place as may be fixed from time
to time by the Board of Directors. Meetings of shareholders may be held
within or without the State of Tennessee as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. ANNUAL MEETINGS. Annual meetings of the shareholders
shall be held each year at such time and on such day as may be designated
by the Board of Directors. Annual meetings shall be held to elect, by a
plurality vote, successors to those members of the Board of Directors whose
terms expire at the meeting and to transact only such other business as may
be properly brought before the meeting in accordance with these Bylaws.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders
may be called by the Board of Directors or the Chief Executive Officer.
SECTION 4. WRITTEN NOTICE. Written notice of all meetings of
shareholders, stating the place, date and time, and in the case of a
special meeting, the purpose or purposes thereof, shall be given to each
shareholder entitled to vote thereat, not less than 10 days nor more than
two months before the date fixed for the meeting.
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SECTION 5. WAIVER OF NOTICE. Whenever notice is required to be
given under the provisions of the statutes, the Charter or these Bylaws, a
written waiver, signed by the person entitled to notice, whether before or
after the time stated therein, shall be deemed equivalent to notice.
Attendance of a shareholder at a meeting shall constitute a waiver of
notice of such meeting and a waiver of consideration of any particular
matter at the meeting that is not within the particular purpose stated in
the notice of such meeting, unless the shareholder attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to
holding the meeting or transacting any business because the meeting is not
lawfully called or convened.
SECTION 6. SHAREHOLDER LIST. The officer who has charge of the
stock ledger of the corporation shall prepare a complete list of the
shareholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each shareholder and the number of shares
registered in the name of each shareholder as reflected in the records of
the corporation. Such list shall be available for inspection by any
shareholder, for any purpose germane to the meeting, during ordinary
business hours, beginning two days after notice of the annual or special
meeting is given and continuing through the meeting, either at the
corporation's principal office or a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting.
The list shall be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any shareholder who
is present.
SECTION 7. QUORUM. The holders of a majority of the stock issued
and outstanding and entitled to be cast thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business, except as otherwise provided
by statute or by the Charter. If, however, such quorum shall not be
present or represented at any meeting of the shareholders, the officer of
the corporation presiding as chairman of the meeting shall have the power
to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meetings at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
SECTION 8. FIXING OF RECORD DATE BY BOARD. For the purpose of
determining the shareholders entitled to notice of or to vote at any
meeting of shareholders, or any adjournment thereof or for the purpose of
determining shareholders entitled to receive payments of any dividend or
the distribution or allotment of any rights or evidences of interests
arising out of any change, conversion or exchange of capital stock, or for
the purpose of any other action, the Board of Directors may fix, in
advance, a date as the record date for any such determination of
shareholders. Such date shall not be more than 70 days before the date of
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any such meeting, nor more than 70 days before effectuation of any other
action proposed to be taken. Only shareholders of record on a record date
so fixed shall be entitled to notice of and to vote at such meeting or to
receive payment of any dividend or the distribution or allotment of any
rights or evidences of interests arising out of any change, conversion or
exchange of capital stock.
SECTION 9. ADJOURNMENTS. When a determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders has
been made as provided in this Article, the determination applies to any
adjournment of the meeting, unless the Board fixes a new record date for
the adjourned meeting.
SECTION 10. VOTE REQUIRED. When a quorum is present at any
meeting, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by
express provision of the statutes or the Charter a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
SECTION 11. VOTING RIGHTS. Except as otherwise provided in the
Charter or the resolution or resolutions of the Board of Directors creating
any class of stock, each holder of issued and outstanding shares of stock
shall, at every meeting of shareholders, be entitled to one vote in person
or by proxy for each share of the issued and outstanding stock having
voting power held by such shareholder.
SECTION 12. ACTION WITHOUT A MEETING. Unless otherwise provided by
law, no action required or permitted to be taken at any annual or special
meeting of shareholders of the corporation may be taken by written consents
without a meeting.
SECTION 13. CONDUCT OF MEETINGS. Meetings of shareholders
generally shall be subject to the following:
(a) The Chairman of the meeting shall have absolute authority
over matters of procedure and there shall be no appeal from the ruling
of the Chairman. If, in his or her absolute discretion, the Chairman
deems it advisable to dispense with the rules of procedure as to any
one meeting of shareholders or part thereof, the Chairman shall so
state and clearly shall state the rules under which the meeting or
appropriate part thereof shall be conducted.
(b) If disorder should arise which, in the absolute discretion
of the Chairman, prevents the continuation of the legitimate business
of the meeting, the Chairman may quit the chair and announce the
adjournment of the meeting; and upon his or her so doing, the meeting
immediately is adjourned without the necessity of any vote or further
action of the shareholders.
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(c) The Chairman may ask or require anyone not a bona fide
shareholder of record on the record date, or a validly appointed proxy
of such a shareholder, to leave the meeting.
(d) The Chairman may introduce nominations, resolutions or
motions submitted by the Board of Directors for consideration by the
shareholders without a motion or second.
(e) Except as the Chairman shall direct, a resolution or motion
not submitted by the Board of Directors shall be considered for vote
only if proposed by a shareholder of record on the record date or a
validly appointed proxy of such a shareholder and seconded by such a
shareholder or proxy other than the individual who proposed the
resolution or motion.
SECTION 14. INSPECTORS OF ELECTION. The Board of Directors or, if
they shall not have so acted, the Chief Executive Officer may appoint,
before any meeting of shareholders, one or more inspectors (who may be
directors and/or employees of the corporation) to act at the meeting and
make a written report thereof. The corporation may designate one or more
persons as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate is able to act at a meeting of shareholders,
the person presiding at the meeting shall appoint one or more inspectors to
act at the meeting. Each inspector, before entering upon the discharge of
his or her duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the best of
the inspector's ability.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM OF DIRECTORS. The number of directors
which shall constitute the whole Board shall be not less than three and
shall be fixed or changed from time to time by, and only by, resolution
adopted by the affirmative vote of not less than two-thirds of the entire
Board of Directors. The directors shall be divided into three classes, as
nearly equal in number as possible, with the term of office of one class
expiring each year. At each annual meeting of the shareholders, the
successors of the class of directors whose term expires at that meeting
shall be elected to hold office for a term expiring at the annual meeting
of shareholders held in the third year following the year of their
election. Directors need not be shareholders.
SECTION 2. POWERS. The business of the corporation shall be
managed by its Board of Directors, which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by
statute, the Charter or these Bylaws directed or required to be exercised
or done by the shareholders.
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SECTION 3. VACANCIES. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors shall be
filled as provided in the Charter.
SECTION 4. RESIGNATION AND REMOVAL. Any director may resign at
any time and such resignation shall take effect upon receipt by the
corporation of the written notice, or at such later time as set forth in
the notice of resignation. Any or all of the directors may be removed, but
only for cause, as provided in the Charter.
SECTION 5. COMPENSATION OF DIRECTORS. Unless otherwise restricted
by the Charter, the Board of Directors shall have the authority to fix the
compensation of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be
paid a fixed sum for attendance at each meeting of the Board or a stated
salary as director. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
SECTION 6. PLACE OF MEETINGS. The Board of Directors of the
corporation may hold meetings, both regular and special, either within or
without the State of Tennessee.
SECTION 7. FIRST MEETING OF NEWLY ELECTED BOARD. The first
meeting of each newly elected Board of Directors shall be held following
the annual meeting of shareholders and no notice of such meeting shall be
necessary to the newly elected directors legally to constitute the meeting,
provided a quorum shall be present. In the event such meeting is not held
immediately following the annual meeting of shareholders, the meeting may
be held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors or as
shall be specified in a written waiver signed by all of the directors.
SECTION 8. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and place as shall from
time to time be determined by the Board.
SECTION 9. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, Chief Executive
Officer or Secretary on one days' notice to each director, personally, by
telegram, facsimile transmission or electronic mail, or on three day's
notice to each director by mail.
SECTION 10. PURPOSE NEED NOT BE STATED. Neither the business to be
transacted at nor the purpose of any regular or special meeting of the
Board of Directors need be specified in the notice of such meeting.
SECTION 11. QUORUM. At all meetings of the Board of Directors a
majority of the directors shall constitute a quorum for the transaction of
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business and the acts of a majority of the directors present at any meeting
at which there is a quorum shall be acts of the Board of Directors except
as may be otherwise specifically provided by statute or the Charter. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall
be present.
SECTION 12. ACTION WITHOUT A MEETING. 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 a written consent
thereto is signed by all members of the Board or of such committee, as the
case may be, and such written consent is filed with the minutes of the
proceedings of the Board or committee.
SECTION 13. MEETING BY TELEPHONE OR SIMILAR EQUIPMENT. The Board
of Directors or any committee designated by the Board of Directors may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means through which all
persons participating in the meeting simultaneously can hear each other and
participation in a meeting pursuant to this section shall constitute
presence in person at such meeting.
SECTION 14. NOTICE. Notices to directors shall be in writing and
delivered personally or transmitted to the directors at their addresses
appearing on the books of the corporation, except as provided in this
section. Notice by mail shall be deemed to be given at the time when the
same shall be mailed. Notice to directors also may be given by telegram,
facsimile transmission or electronic mail, which shall be deemed given at
the time when the same shall be sent to addresses provided by directors
from time to time. Oral notice given by the Chairman of the Board, the
Chief Executive Officer, the Secretary or any person delegated by them
shall be effective if such officers deem oral notice to be reasonable under
the circumstances. Oral notice shall be effective when communicated in a
comprehensive manner.
SECTION 15. WAIVER OF NOTICE. Whenever notice is required to be
given under the provisions of the statutes, the Charter or these Bylaws, a
written waiver, signed by the person entitled to notice, whether before or
after the time stated therein, shall be deemed equivalent to notice, which
waiver shall be filed with the minutes of the proceedings of the Board or
committee. Attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except when a director attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to holding
the meeting or transacting 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 directors or members of a
committee of directors need be specified in any written waiver of notice.
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ARTICLE IV
COMMITTEES OF DIRECTORS
SECTION 1. EXECUTIVE COMMITTEE. The Board of Directors, by
resolution adopted by a majority of the directors present at any meeting at
which there is a quorum, may appoint an Executive Committee whose
membership shall consist of two or more members of the Board of Directors
as it may deem advisable from time to time to serve at the pleasure of the
Board. The Board of Directors also may appoint directors to serve as
alternates for members of the committee in the absence or disability of
regular members. The Board of Directors may fill any vacancies as they
occur. The Executive Committee shall have and may exercise the full powers
of the Board of Directors in the management of the business affairs and
property of the corporation during the intervals between meetings of the
Board of Directors, subject to law and to such limitations and controls as
the Board of Directors may impose from time to time.
SECTION 2. AUDIT COMMITTEE. The Audit Committee, shall cause a
suitable examination of the financial records and operations of the
corporation and its subsidiaries to be made by the internal auditor of the
corporation. The Audit Committee also shall recommend to the Board of
Directors the employment of independent certified public accountants to
examine the financial statements of the corporation and its subsidiaries,
review examination reports of the corporation and its subsidiaries prepared
by regulatory authorities, review policies and practices regarding
compliance with laws and conflicts of interests and report to the Board of
Directors at least once each calendar year.
SECTION 3. EXECUTIVE MANAGEMENT AND COMPENSATION COMMITTEE. The
Executive Management and Compensation Committee shall recommend individuals
to serve as officers, review the personnel policies, plans and programs of
the corporation, including individual salaries of executive officers, and
submit recommendations to the Board of Directors. The Executive Management
and Compensation Committee shall review and administer the corporation's
stock option and other equity-based incentive plans, make recommendations
related to such plans and review all material plan changes. The Executive
Management and Compensation Committee also shall recommend to the Board of
Directors the retainer and attendance fee for nonemployee directors and
review management's recommended annual budget and the Company's strategic
plans.
SECTION 4. OTHER COMMITTEES. The Board of Directors may designate
such other committees as it may deem appropriate and such committees shall
exercise the authority delegated to them.
SECTION 5. COMMITTEE MEETINGS. Each committee provided for above
shall meet as often as its business may require and may fix a day and time
at intervals for regular meetings, notice of which shall not be required.
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Whenever the day fixed for a meeting shall fall on a holiday, the meeting
shall be held on the business day following or on such other day as the
committee may determine. Special meetings of the committees may be called
by the chairman of the committee in the manner provided in these bylaws for
call of meetings of the Board of Directors. A majority of its members
shall constitute a quorum for the transaction of the business of any
committee. A record of the proceedings of each committee shall be kept and
presented to the Board of Directors.
SECTION 6. SUBSTITUTES. In the absence or disqualification of a
member of a committee, the members thereof present at a meeting and not
disqualified from voting, whether or not they constitute a quorum,
unanimously may appoint another member of the Board to act at a meeting in
place of such absent or disqualified member.
ARTICLE V
OFFICERS AND TITLED POSITIONS
SECTION 1. APPOINTMENT OF OFFICERS. The Board of Directors at its
first meeting after the annual meeting of shareholders, or as soon as
practicable after the election of directors in each year, shall appoint
from their number a Chairman of the Board, President and Secretary. The
Board of Directors also may appoint a Chief Executive Officer, a Chief
Financial Officer, one or more Vice Presidents, a Treasurer or other
officers designated as officers by the Board. The dismissal of an officer,
the appointment of an officer to fill the office of one who has been
dismissed or has ceased for any reason to be an officer, the appointment of
any additional officers and the change of an officer to a different or
additional office, may be made by the Board of Directors at any later
meeting. Any two or more offices may be filled by the same person.
SECTION 2. APPOINTMENTS TO TITLED POSITIONS. The Board may from
time to time appoint individuals to titled positions, including but not
limited to the positions of Assistant Vice President, Assistant Secretary
and Assistant Treasurer, and from time to time also may designate and fill
such other titled positions as they may deem proper. The dismissal of the
holder of a titled position, the appointment of a replacement for the
holder of a titled position to fill the place of one who has been dismissed
or has ceased for any reason to hold a titled position, the appointment of
any additional titled position holders and the change of a titled position
holder to a different or additional position, may be made by the Board of
Directors at any meeting. Any two or more titled positions may be filled
by the same person.
SECTION 3. AUTHORITY OF OFFICERS. The Chairman of the Board, the
President, the Chief Executive Officer, the Chief Financial Officer, any
Vice President, the Secretary, the Treasurer and any other persons
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expressly designated as officers by the Board shall be the only officers of
the corporation. Only the officers of the corporation shall have
discretionary authority to determine the fundamental policies of the
corporation.
SECTION 4. AUTHORITY OF TITLED POSITIONS. Holders of titled
positions shall not by virtue of holding such titled position be deemed to
be officers of the corporation. Holders of titled positions who are not
officers shall not have discretionary authority to determine fundamental
policies of the corporation and shall not, by reason of holding such titled
positions, be entitled to have access to any files, records or other
information relating or pertaining to the corporation, its business and
finances, or to attend or receive the minutes of any meetings of the Board
of Directors or any committee of the corporation, except as and to the
extent expressly authorized and permitted by the Board of Directors or the
Chief Executive Officer.
SECTION 5. TERM OF SERVICE. Each officer and holder of a titled
position shall serve at the pleasure of the Board. The Board of Directors
may remove any officer or holder of a titled position from that office or
position with or without cause. Any officer or holder of a titled position
may resign his or her office or position at any time, such resignation to
take effect upon receipt of written notice thereof by the corporation
unless otherwise specified in the resignation.
SECTION 6. CHAIRMAN OF THE BOARD. The Chairman of the Board
shall, when present, preside at all meetings of the shareholders and at all
meetings of the Board of Directors and shall have such other duties and
powers as may be imposed or given by the Board of Directors. In the case
of absence or inability to act of the President or Chief Executive Officer,
the Chairman of the Board shall exercise all of the duties and
responsibilities of such officer until the Board of Directors otherwise
shall direct.
SECTION 7. PRESIDENT. The President shall, subject to the
direction of the Board of Directors, see that all orders and resolutions of
the Board of Directors are carried into effect and shall perform all other
duties necessary or appropriate to the President's office, subject,
however, to his or her right (unless otherwise limited by the Board of
Directors) and the right of the directors to delegate any specific powers
to any other officer or officers of the corporation. The President shall
be the Chief Executive Officer unless another person is appointed Chief
Executive Officer by the Board of Directors. In the case of absence or
inability to act of the Chairman of the Board or the Chief Executive
Officer, the President shall exercise all of the duties and
responsibilities of such officer until the Board of Directors otherwise
shall direct.
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SECTION 8. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer,
in addition to duties as Chairman of the Board, President or other officer,
as the case may be, shall have final authority, subject to the control of
the Board of Directors, over the general policy and business of the
corporation and shall have the general control and management of the
business and affairs of the corporation. The Chief Executive Officer shall
have the power, subject to the control of the Board of Directors, to
appoint, suspend or discharge and to prescribe the duties and to fix the
compensation of such agents and employees of the corporation, other than
the officers appointed by the Board, as he or she may deem necessary.
SECTION 9. CHIEF FINANCIAL OFFICER. There may be elected a Chief
Financial Officer who shall, if elected, subject only to the control of the
Board of Directors, have general charge, control and supervision over the
financial policy and administration of the corporation and shall have such
other duties and powers as may be imposed or given by the Board of
Directors. The Chief Financial Officer shall report only and directly to
the Board of Directors.
SECTION 10. CHIEF OPERATING OFFICER. There may be elected a Chief
Operating Officer who shall, if elected, have general charge, control and
supervision over the administration and operations of the corporation and
shall have such other duties and powers as may be imposed or given by the
Board of Directors. If no Chief Operating Officer is elected, the duties
and powers of the Chief Operating Officer shall be performed by the Chief
Executive Officer.
SECTION 11. VICE PRESIDENTS. The Vice President or Vice Presidents
shall perform such duties and have such powers as the Chief Executive
Officer or the Board of Directors may from time to time prescribe. The
Board of Directors may at its discretion designate one or more of the Vice
Presidents to be an Executive Vice President or Senior Vice President. Any
Vice President so designated shall have such duties and responsibilities as
the Board shall prescribe.
SECTION 12. SECRETARY. The Secretary shall attend all meetings of
the shareholders, the Board of Directors and, if there shall be one, the
Executive Committee, and shall preserve in the books of the corporation
true minutes of the proceedings of all such meetings. The Secretary safely
shall keep in his or her custody the seal of the corporation, if any, and
shall have authority to affix the same to all instruments where its use is
required or appropriate. The Secretary shall give all notices required or
appropriate pursuant to statute, Charter, Bylaws or resolution. The
Secretary shall perform such other duties as may be delegated by the Board
of Directors.
SECTION 13. TREASURER. The Treasurer shall have custody of all
corporate funds and securities and shall keep in books belonging to the
corporation full and accurate accounts of all receipts and disbursements.
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The Treasurer shall deposit all moneys, securities and other valuable
effects in the name of the corporation in depositories as may be designated
for that purpose by the Board of Directors. The Treasurer shall disburse
the funds of the corporation as may be ordered by the Board of Directors,
taking proper vouchers for such disbursements, and shall render to the
Chief Executive Officer and directors at the regular meetings of the Board,
and whenever requested by them, an account of all his or her transactions
as Treasurer and of the financial condition of the corporation. If
required by the Board of Directors, the Treasurer shall deliver to the
Chief Executive Officer of the corporation and keep in force a bond in
form, amount and with a surety or sureties satisfactory to the Board of
Directors, conditioned on faithful performance of the duties of his or her
office, and for restoration to the corporation in case of his or her death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and property of whatever kind in his or her possession or
under his or her control belonging to the corporation.
SECTION 14. ASSISTANT SECRETARY AND ASSISTANT TREASURER. There may
be elected an Assistant Secretary and Assistant Treasurer who shall, in the
absence, disability or nonfeasance of the Secretary or Treasurer, perform
the duties and exercise the powers of such persons, respectively.
SECTION 15. OTHER OFFICERS. All other officers, as may from time
to time be appointed by the Board of Directors, shall perform such duties
and exercise such authority as the Board of Directors shall prescribe.
SECTION 16. ABSENCE OF OFFICER. In the case of the absence or
inability to act of any officer, or for any other reason that the Board may
deem sufficient, the Board of Directors or the Chief Executive Officer may
delegate the powers or duties of such officer to any other officer or
director. To the extent that the enumerated powers or duties do not
involve participation in major policy-making functions of the corporation
or the exercise of discretionary authority to that end, said powers or
duties may be delegated to the holder of a titled position, but shall be
exercised under the supervision of an officer.
SECTION 17. ABSENCE OF HOLDER OF TITLED POSITION. In the case of
the absence of the holder of any titled position, or for any other reason
that the Board or Chief Executive Officer may deem sufficient, the Board of
Directors or the Chief Executive Officer may delegate the powers or duties
of such titled position to any officer or director or to the holder of any
other titled position.
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ARTICLE VI
INDEMNIFICATION
SECTION 1. INDEMNIFICATION OTHER THAN IN ACTIONS BY OR IN THE
RIGHT OF THE CORPORATION. Any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
and whether formal or informal, by reason of the fact that the person is or
was a director or officer of the corporation or, is or was a director or
officer of the corporation and is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, limited liability company, joint venture, trust
or other enterprise, whether for profit or not, shall be indemnified by the
corporation against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed to be in
(in the case of action in an official capacity) or not opposed to (in the
case of action other than in an official capacity) the best interests of
the corporation, and with respect to any criminal action or proceeding, had
no reasonable cause to believe such conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not,
of itself, create a presumption that the person did not act in good faith
and in a manner which he or she reasonably believed to be in (in the case
of action in an official capacity) or not opposed to (in the case of action
other than in an official capacity) the best interests of the corporation,
and, with respect to any criminal action or proceeding, that the person had
reasonable cause to believe that such conduct was unlawful. Persons who
are not directors or officers of the corporation similarly may be
indemnified in respect of such service to the extent authorized at any time
by the Board of Directors, except as otherwise provided by law.
SECTION 2. INDEMNIFICATION IN ACTIONS BY OR IN THE RIGHT OF THE
CORPORATION. Any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of
the fact that the person is or was a director or officer of the
corporation, or is or was a director or officer of the corporation and is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, limited liability
company, joint venture, trust or other enterprise, whether for profit or
not, shall be indemnified by the corporation against expenses (including
attorneys' fees) actually and reasonably incurred by the person in
connection with the defense or settlement of such action or suit if he or
she acted in good faith and in a manner he or she reasonably believed to be
in (in the case of action in an official capacity) or not opposed to (in
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the case of action other than in an official capacity) the best interests
of the corporation. Indemnification shall not be made for a claim, issue
or matter in which the person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application, that despite
the adjudication of liability but in view of all the relevant circumstances
of the case, such person is fairly and reasonably entitled to indemnity for
reasonable expenses. Persons who are not directors or officers of a
corporation may be similarly identified in respect of such service to the
extent authorized at any time by the Board of Directors, except as
otherwise provided by law.
SECTION 3. EXPENSES. To the extent that a director, officer or
other person whose indemnification is authorized by the Board of Directors,
has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in Section 1 or 2 of this Article, or in
defense of any claim, issue or matter therein, he or she shall be
indemnified against all expenses (including attorneys fees) actually and
reasonably incurred by him or her in connection therewith.
SECTION 4. DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Sections 1 or 2 of this Article (unless ordered by a
court) shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification is proper in the
circumstances because the person has met the applicable standard of conduct
set forth in Sections 1 and 2. Such determination shall be made (a) by a
majority vote of a quorum of directors who are not parties to such action,
suit or proceeding, or (b) if a quorum cannot be obtained pursuant to (a),
by majority vote of a committee of the Board, which consists of two or more
directors who are not parties to the action, suit or proceeding, or (c) if
there are no such directors or committee, or if such directors or committee
so directs, by independent special legal counsel (who may be the regular
counsel of the corporation) in a written opinion, or (d) by the
shareholders, but shares owned by or voted under the control of directors
who are parties to the action, suit or proceeding may not vote on the
determination.
SECTION 5. ADVANCEMENT OF EXPENSES. Expenses incurred in
defending a civil or criminal action, suit or proceeding described in
Sections 1 or 2 of this Article shall be paid by the corporation in advance
of the final disposition of such action, suit or proceeding as authorized
by the Board of Directors in the manner provided in Section 4 if a
determination is made that the facts then known to those making the
indemnification determination would not preclude indemnification, and upon
receipt of (a) a written affirmation of the director, officer, employee or
agent of his or her good faith belief that he or she has met the applicable
standard of conduct, and (b) a written undertaking by or on behalf of the
director, officer, employee or agent to repay such amount if it is
ultimately determined that he or she is not entitled to indemnification
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SECTION 6. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification and advancement of expenses provided by this Article shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under the
Charter, any Bylaw, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in the person's official
capacity and as to action in another capacity while holding such office and
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators.
SECTION 7. INSURANCE. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise against any liability asserted
against him or her or incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the corporation
would have the power to indemnify him or her against such liability under
the provisions of this Article.
SECTION 8. MERGERS. The provisions of this Article are for the
benefit of directors and officers of this corporation and shall survive
merger or consolidation of this corporation. For the purposes of this
Article, references to the "corporation" include any domestic or foreign
constituent corporations 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 or agent of this corporation, or is or was
serving at the request of this corporation as a director, officer, employee
or agent of another corporation, partnership, limited liability company,
joint venture, trust or other enterprise, whether for profit or not, shall
stand in the same position under the provisions of this Article with
respect to the resulting or surviving corporation.
SECTION 9. SAVINGS CLAUSE. If this Article or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction,
then the corporation nevertheless shall indemnify each director and
officer, or other person whose indemnification is authorized by the Board
of Directors as to expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative,
including a grand jury proceeding and an action by the corporation, to the
full extent permitted by any applicable portion of this Article that shall
not have been invalidated or by any other applicable law.
SECTION 10. CONSTRUCTION. It is the intent of this Article to
grant to the directors and officers of the corporation, and to directors
and officers serving at the request of the corporation as directors,
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officers, employees or agents of another corporation, partnership, joint
venture, trust or other enterprise, the broadest indemnification permitted
under the laws of the State of Tennessee, as the same may be amended from
time to time, and this Article shall be construed liberally to give effect
to such intent. The corporation further intends, acknowledges and agrees
that all directors and officers have undertaken and will undertake the
performance of their duties and obligations in reliance upon the
indemnification provided for in this Article, and accordingly, such rights
of indemnification may not be retroactively reduced or abolished as to any
director and officer, without his or her consent.
ARTICLE VII
SUBSIDIARIES
SECTION 1. SUBSIDIARIES. The Board of Directors, the Chief
Executive Officer or any officer designated by the Board of Directors may
vote the shares of stock owned by the corporation in any subsidiary,
whether wholly or partly owned by the corporation, in such manner as they
may deem in the best interests of the corporation, including, without
limitation, for the election of directors of any subsidiary corporation,
for any amendments to the charter or bylaws of any such subsidiary
corporation or for the liquidation, merger or sale of assets of any such
subsidiary corporation. The Board of Directors, the Chief Executive
Officer or any executive officer designated by the Board of Directors may
cause to be elected to the Board of Directors of any such subsidiary
corporation such persons as they shall designate, any of whom may, but need
not be, directors, executive officers or other employees or agents of the
corporation. The Board of Directors, the Chief Executive Officer or any
executive officer designated by the Board of Directors may instruct the
directors of any such subsidiary corporation as to the manner in which they
are to vote upon any issue properly coming before them as the directors of
such subsidiary corporation and such directors shall have no liability to
the corporation as the result of any action taken in accordance with such
instructions.
SECTION 2. SUBSIDIARY OFFICERS NOT OFFICERS. The officers of any
subsidiary corporation shall not, by virtue of holding such title and
position, be deemed to be officers of the corporation, nor shall any such
officer of a subsidiary corporation, unless such officer also shall be a
director or officer of the corporation, be entitled to have access to any
files, records or other information relating or pertaining to the
corporation, its business and finances or to attend or receive the minutes
of any meetings of the Board of Directors or any committee of the
corporation, except as and to the extent expressly authorized and permitted
by the Board of Directors or the Chief Executive Officer.
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ARTICLE VIII
CERTIFICATES OF STOCK
SECTION 1. FORM. 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 Chief Executive Officer, President or a Vice President
and the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the corporation, certifying the number of shares
owned by such shareholder in the corporation.
SECTION 2. FACSIMILE SIGNATURE. Where a certificate is signed
(a) by a transfer agent or an assistant transfer agent or (b) by a transfer
clerk acting on behalf of the corporation and a registrar, the signature of
any such Chief Executive Officer, President, Vice President, Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary may be a facsimile.
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 the
person were such officer, transfer agent or registrar at the date of issue.
SECTION 3. LOST CERTIFICATES. The corporation may issue a new
certificate or certificates in place of any certificate or certificates
previously issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the
corporation may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or the person's legal representative, to give the
corporation a bond in such sum as it may direct as indemnity against any
claim that may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed.
SECTION 4. TRANSFERS OF STOCK. Upon surrender to the corporation
or the transfer agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation to issue a
new certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.
SECTION 5. REGISTERED SHAREHOLDERS. The corporation shall be
entitled to recognize the exclusive rights of a person registered on its
books as the owner of shares to receive dividends and to vote as such owner
and shall not be bound to recognize any equitable or other claim to or
interest in such share or 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 Tennessee.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 1. DIVIDENDS. Dividends upon the capital stock of the
corporation, subject to the provisions of the Charter, if any, may be
declared by the Board of Directors at any regular or special meeting
pursuant to law. Dividends may be paid in cash, in property or in shares
of capital stock, subject to the provisions of the Charter.
SECTION 2. RESERVES. Before payment of any dividends, there may
be set aside out of any funds of the corporation available for dividends
such sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies,
for equalizing dividends, for repairing or maintaining any property of the
corporation or for such other purpose as the directors shall think
conducive to the interests of the corporation and the directors may modify
or abolish any such reserve in the manner in which it was created.
SECTION 3. CHECKS. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
SECTION 4. FISCAL YEAR. The fiscal year of the corporation shall
be fixed by resolution of the Board of Directors.
SECTION 5. SEAL. The corporate seal, if any, shall have inscribed
thereon the name of the corporation, and the words "Corporate Seal,
Tennessee." The seal may be used by causing it or a facsimile thereof to
be impressed, affixed, reproduced or otherwise.
ARTICLE X
AMENDMENTS
Subject to any provisions of the Charter, these Bylaws may be amended,
altered, changed or repealed at any regular or special meeting of the Board
of Directors. Subject to any revisions of the Charter, these Bylaws also
may be amended, altered, changed or repealed at any regular or special
meeting of shareholders provided that notice of the meeting states that
amendment of the Bylaws is a purpose of the meeting, and the proposed
amendment has been provided to the shareholders as required under
applicable law.
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EXHIBIT 5
PATRICK R. SUGHROUE, P.C.
3777 Sparks Drive S.E.
Suite 130
Grand Rapids, MI 49546
Patrick R. Sughroue
Ethan M. Powsner ------------ Tel: (616) 940-3399
-------------- Fax: (616) 940-3592
Angela J. Pearson, Legal A PRIMERUS LAW FIRM E-mail: [email protected]
Assistant
July 2, 1998
Energy Search, Incorporated
280 Fort Sanders West Boulevard, Suite 200
Knoxville, Tennessee 37922
RE: REGISTRATION STATEMENT OF FORM S-3
1,834,235 SHARES OF COMMON STOCK
Gentlemen:
As counsel to Energy Search, Incorporated, a Tennessee
corporation (the "Company"), I have acted as counsel to the Company in
connection with the Company's Registration Statement of Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to the registration
of 1,834,235 shares (the "Shares") of Common Stock, no par value.
In such capacity I have examined the Company's Charter and Bylaws
and such other corporate records of the Company, documents and certificates
of public officials and others as I have deemed necessary as a basis for
the opinion hereinafter expressed.
Based upon the foregoing and having regard for such legal
considerations as I deem relevant, I am of the opinion that the Shares have
been duly authorized and are validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to my name under the
caption "Legal Matters" therein.
Very truly yours,
PATRICK R. SUGHROUE, PC
/s/Patrick R. Sughroue
Patrick R. Sughroue
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
registration statement on Form S-3 of our report dated February 20, 1998,
on the financial statements of the Company for the years ended December 31,
1996 and December 31, 1997 included in the Company's annual report on Form
10-KSB for the year ended December 31, 1997. We also consent to the
reference to our firm under the caption "Experts" in the Company's
registration statement on Form S-3.
/S/ PLANTE & MORAN, LLP
PLANTE & MORAN, LLP
July 2, 1998
Grand Rapids, Michigan
