Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-021210.htm |
| EX-99.1 - PRESS RELEASE - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9901.htm |
| EX-99.2 - PRO FORMA FINANCIAL INFORMATION - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9902.htm |
EXHIBIT 3.1
CERTIFICATE
OF DESIGNATION
OF
RIGHTS, PREFERENCES AND LIMITATIONS OF THE
SERIES
B REDEEMABLE CONVERTIBLE PREFERRED STOCK
OF
MAGNUM
HUNTER RESOURCES CORPORATION
_______________
Magnum
Hunter Resources Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with Sections
151 of the Delaware General Corporation Law, DOES HEREBY CERTIFY:
FIRST:
The name of the corporation is Magnum Hunter Resources Corporation (formerly
known as Petro Resources Corporation and Kid Critter U.S.A., Inc., the “Corporation”).
SECOND:
The original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on June 4, 1997.
THIRD:
This Certificate of Designation for the Corporation’s Series B Redeemable
Convertible Preferred Stock (the “Series B Preferred Stock”) was
duly adopted by the affirmative vote of the Corporation’s Board of Directors
(the “Board of
Directors”) on February 10, 2010, and is as follows:
1. Designation, Amount and Par
Value. The series of Preferred Stock shall be designated as the
Corporation’s Series B Redeemable Convertible Preferred Stock, and the number of
shares so designated shall be 5,000,000 (which number includes 1,000,000 shares
of Series B Redeemable Convertible Preferred Stock reserved exclusively for the
payment of dividends in kind). Each share of Series B Preferred Stock shall
have a par value of $0.01 and a stated value equal to $3.75 (the “Stated Value”).
2. Definitions. In
addition to the terms defined elsewhere in this Certificate of Designation,
the following terms have the meanings indicated:
“Business Day” means any day
other than Saturday, Sunday and any day on which banks are required or
authorized by law to be closed in the State of Texas.
“Commission” means the
Securities and Exchange Commission.
“Common Stock” means the common
stock of the Corporation, par value $0.01 per share.
“Dividend Rate” means 2.75% per
annum of the sum of (i) the Stated Value per share of Series B Preferred Stock
plus (ii) all accrued but unpaid dividends on such share of Series B Preferred
Stock that remain unpaid following the Dividend Payment Date when due, in each
case as adjusted for any stock split, stock dividend, stock combination or other
similar transactions with respect to the Series B Preferred Stock.
“Eligible Market” means any of
the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the
NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin
Board.
“Fair Market Value” of any
property means the fair market value thereof as determined in good faith by the
Board of Directors, which determination must be set forth in a written
resolution of the Board of Directors, in accordance with the following
rules:
(i) for a
security traded or quoted on a national securities exchange or automated
quotation system, the Fair Market Value will be the average of the closing
prices of such security on such exchange or quotation system over a 20-trading
day period ending on the trading day immediately prior to the date of
determination;
(ii) for Common
Stock that is not so traded or quoted, the Fair Market Value shall be
determined: (x) mutually by the Board of Directors and the Holders of
at least a majority of the then outstanding shares of Series B Preferred Stock,
(y) by the Board of Directors based on a valuation of the Corporation not less
than the implied valuation of the Common Stock based on an arms’-length sale of
equity securities to a non-affiliate third-party within six months prior to the
date of determination, or (z) by a nationally recognized investment banking or
accounting firm (whose fees and expenses will be paid by the Corporation)
selected by mutual agreement between the Board of Directors and the Holders
representing a majority of the then outstanding shares of Series B Preferred
Stock; or
(iii) for any other
property, the Fair Market Value shall be determined by the Board of Directors
assuming a willing buyer and a willing seller in an arm’s-length
transaction;
provided that if
Holders representing a majority of the then outstanding shares of Series B
Preferred Stock object to a determination of the Board of Directors made
pursuant to clause (ii)(y) or clause (iii), then the Fair Market Value of such
property will be as determined by a nationally recognized investment banking or
accounting firm (whose fees and expenses will be paid by the Corporation)
selected by mutual agreement between the Board of Directors and the Holders
representing a majority of the then outstanding shares of Series B Preferred
Stock.
“Holder” means any holder of
Series B Preferred Stock.
“Junior Securities” means (i)
the Common Stock and all other outstanding equity or equity equivalent
securities of the Corporation, including but not limited to the Corporation’s
10.25% Series C Cumulative Perpetual Preferred Stock (the “Series C Stock”), and (ii) all
equity or equity equivalent securities issued by the Corporation after the
Original Issue Date that do not rank senior to or pari passu with the Series B
Preferred Stock.
“Original Issue Date” means the
date of the first issuance of any shares of the Series B Preferred Stock
regardless of the number of transfers of any particular shares of Series B
Preferred Stock and regardless of the number of certificates that may be issued
to evidence such Series B Preferred Stock.
“Person” means any individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture or other non-corporate business enterprise, limited liability
company, joint stock company, trust, organization, business, labor union or
government (or an agency or subdivision thereof) or any court or other federal,
state, local or other governmental authority or other entity of any
kind.
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3. Voting
Rights.
Except as
otherwise required by law, the Series B Preferred Stock shall have no voting
rights; provided, however, that so long as shares of Series B Preferred Stock
are outstanding, the Corporation shall not, without the prior approval of the
Holders of at least a majority of the then issued and outstanding shares of
Series B Preferred Stock, voting as a separate class: (1) authorize or
increase the authorized number of shares of Series B Preferred Stock or any
shares of capital stock of the Corporation having any right, preference or
priority ranking senior to or pari passu with Series B Preferred Stock,
(2) authorize, adopt or approve any amendment to the Certificate of
Incorporation, the Bylaws or this Certificate of Designation that would increase
or decrease the par value or the Stated Value of the shares of the Series B
Preferred Stock, alter or change the powers, preferences or rights of the shares
of Series B Preferred Stock or alter or change the powers, preferences or rights
of any other capital stock of the Corporation if after such alteration or change
such capital stock would be senior to or pari passu with Series B Preferred
Stock, (3) amend, alter or repeal the Certificate of Incorporation, the
Bylaws or this Certificate of Designation so as to affect the shares of Series B
Preferred Stock adversely, or (4) authorize or issue any security
convertible into, exchangeable for or evidencing the right to purchase or
otherwise receive any shares of any class or classes of capital stock of the
Corporation having any right, preference or priority ranking senior to or pari
passu with Series B Preferred Stock.
The
Holder of each share of Series B Preferred Stock shall be entitled to one vote
per share of Series B Preferred Stock at the record date for determination of
the stockholders entitled to vote on such matters, or, if no record date is
established, at the date such vote is taken or the effective date of any written
consent.
4. Dividends.
(a) Holders shall
be entitled to receive, out of funds legally available therefor, and the
Corporation shall pay, cumulative dividends on the Series B Preferred Stock at
the Dividend Rate per share. Dividends on the Series B Preferred Stock shall
accrue daily commencing as of the Original Issue Date at the Dividend Rate then
in effect, and shall be deemed to accrue from the Original Issue Date whether or
not earned or declared and whether or not there are profits, surplus or other
funds of the Corporation legally available for the payment of dividends.
Dividends on the Series B Preferred Stock shall (i) be calculated on the
basis of a 360-day year, and (ii) commencing on the Original Issue Date, be
payable quarterly in arrears on each March 31, June 30, September 30,
and December 31, except if such date is not a Business Day, such dividend shall
be payable on the next succeeding Business Day (each, a “Dividend Payment
Date”).
(b) The
Corporation may pay required dividends (i) in shares of Series B Preferred Stock
or (ii) subject to the receipt of any consent required under the Corporation’s
senior secured credit facility as from time to time in effect, in cash;
provided, however, the Corporation shall not pay any cash dividends on its
Common Stock, or any other Junior Securities other than the Series C Stock,
within a 180-day period before or after a Dividend Payment Date upon which the
Corporation has paid in kind, rather than cash, dividends on the Series B
Preferred Stock. In the event that the Corporation elects to pay dividends in
shares of Series B Preferred Stock, the number of shares of Series B Preferred
Stock to be issued to each Holder in respect of such dividend shall be
determined by dividing the total dividend then payable to such Holder by the
Stated Value, and rounding up to the nearest whole share, and the Corporation
shall, on or before the fifth Business Day following the applicable Dividend
Payment Date, issue and deliver to such Holder a certificate, registered in the
name of the Holder or its designee, for the number of shares of Series B
Preferred Stock to which the Holder shall be entitled. Notwithstanding any other
provision of this Certificate of Designation, the Corporation shall not be
entitled to pay dividends by issuing Series B Preferred Stock unless the
Corporation has obtained stockholder approval, if required, for the issuance in
accordance with the applicable rules and regulations of the Eligible
Market.
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(c) Notwithstanding any
other provision of this Certificate of Designation, the Corporation shall not
pay any dividends on, or make any distributions with respect to, in cash or in
kind or otherwise, its Common Stock or any other Junior Securities when accrued
and unpaid dividends are owed to the Holders.
5. Registration of Series B
Preferred Stock. The Corporation shall register shares of the Series B
Preferred Stock, upon records to be maintained by the Corporation for that
purpose (the “Series B
Preferred Stock Register”), in the name of the record Holders thereof
from time to time. The Corporation may deem and treat the registered Holder of
shares of Series B Preferred Stock as the absolute owner thereof for the purpose
of any conversion or redemption thereof or any distribution to such Holder, and
for all other purposes, absent actual written notice to the contrary from the
registered Holder.
6. Registration of
Transfers. The Corporation shall register the transfer of any shares of
Series B Preferred Stock in the Series B Preferred Stock Register, upon
surrender of certificates evidencing such shares to the Corporation at its
address specified herein. Upon any such registration or transfer, a new
certificate evidencing the shares of Series B Preferred Stock so transferred
shall be issued to the transferee and a new certificate evidencing the remaining
portion of the shares not so transferred, if any, shall be issued to the
transferring Holder.
7. Liquidation.
(a) In the event
of any liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary (a “Liquidation Event”), which
shall be deemed to include (i) the acquisition of the Corporation by another
person or affiliated group of persons by means of any transaction or series of
related transactions (including, without limitation, any reorganization, merger,
consolidation, issuance of new securities or transfer of issued and outstanding
securities) where less than a majority of the voting power of the acquiring or
surviving person or group immediately following such acquisition is held by
persons or entities who were stockholders of the Corporation immediately prior
to such acquisition, (ii) a sale or other disposition of all or substantially
all of the assets of the Corporation and (iii) a sale or other disposition of
assets that results in funds being available for distribution to stockholders
that are in excess of those necessary or appropriate for the Corporation to
conduct its business operations (including repayment of its outstanding
liabilities) and execute its business plan and that are sufficient to pay the
Series B Stock Liquidation Preference in full (as defined below), as determined
by the Board of Directors, the Holders of Series B Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of any of the
assets or surplus funds of the Corporation to the holders of Junior Securities
by reason of their ownership thereof, an amount per share in cash equal to the
greater of (x) the Stated Value for each share of Series B Preferred Stock then
held by them (as adjusted for any stock split, stock dividend, stock combination
or other similar transactions with respect to the Series B Preferred Stock),
plus all accrued and unpaid dividends on such Series B Preferred Stock as of the
date of such event, or (y) the amount payable per share of Common Stock which
such Holder of Series B Preferred Stock would have received if such Holder had
converted to Common Stock immediately prior to the Liquidation Event all of the
shares of Series B Preferred Stock then held by such Holder together with all
accrued but unpaid dividends on such Series B Preferred Stock as of the date of
such event (the “Series B Stock
Liquidation Preference”). If, upon the occurrence of a Liquidation Event,
the funds thus distributed among the Holders of the Series B Preferred Stock
shall be insufficient to permit the payment to such Holders of the full Series B
Stock Liquidation Preference, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among the Holders of the Series B Preferred Stock in proportion to the aggregate
Series B Stock Liquidation Preference that would otherwise be payable to each of
such Holders.
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(b) In the event
of a Liquidation Event, following completion of the distributions required by
the first sentence of paragraph (a) of this Section 7, if assets or surplus
funds remain in the Corporation, the holders of the Junior Securities shall
share in all remaining assets of the Corporation, in accordance with the General
Corporation Law of Delaware and the Certificate of Incorporation of the
Corporation, as amended.
(c) The
Corporation shall give each Holder written notice of any Liquidation Event no
less than 30 days prior to the occurrence thereof.
8. Conversion.
(a) At the option
of any Holder, from time to time, all or any portion of the Series B Preferred
Stock held by such Holder may be converted into one share of duly authorized,
validly issued, fully-paid and non-assessable share of Common Stock (each an
“Underlying Share”) per
share of Series B Preferred Stock to be converted by such Holder, as adjusted
for any stock dividends, splits, combinations or similar events. The
number of Underlying Shares into which each share of Series B Preferred Stock is
convertible, as adjusted from time to time in accordance with this Section 8, is
referred to herein as the “Conversion
Number.” A Holder may convert Series B Preferred Stock into
Common Stock pursuant to this paragraph at any time, and from time to time,
after the Original Issue Date until the date that is 20 years following the
Original Issue Date, by delivering to the Corporation (i) a Conversion Notice,
in the form attached hereto as Exhibit “A”, appropriately completed and duly
signed, and (ii) the original certificate(s) evidencing the Series B Preferred
Stock being converted. The date any such Conversion Notice and original
certificate(s) are delivered to the Corporation (as determined in accordance
with the notice provisions hereof) is a “Conversion Date.”
(b) Adjustments to Conversion
Number.
(i) Stock Splits and
Combinations. If the outstanding shares of Common Stock are
split into a greater number of shares, the Conversion Number will be
proportionately increased. If the outstanding shares of Common Stock
are combined into a smaller number of shares, the Conversion Number then in
effect immediately before such combination will be proportionately
decreased. These adjustments will be effective at the close of
business on the date the split or combination becomes effective.
(ii) Dividends and Other
Distributions in Shares of Common Stock. If the Corporation
declares or makes a dividend or other distribution payable in shares of Common
Stock to holders of Common Stock, then the Conversion Number will be increased,
effective at the close of business on the date of issuance of the shares of
Common Stock paid as a dividend or distribution (the “Measurement Date”), to a
number determined by multiplying such Conversion Number by a
fraction:
(A) the numerator
of which will be sum of (x) the number of shares of Common Stock outstanding
immediately prior to the Measurement Date plus (y) the number of shares of
Common Stock issued in payment of such dividend or distribution,
and
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(B) the
denominator of which will be the number of shares of Common Stock outstanding,
on a fully diluted basis, immediately prior to the Measurement
Date.
(iii) Dividends and Distributions
Other Than In Shares of Common Stock. If the Corporation
declares or makes a dividend or other distribution to holders of Common Stock
payable in capital stock, other securities or other property (including but not
limited to cash and evidences of indebtedness) other than shares of Common
Stock, then the Corporation shall provide that the Holders of Series B Preferred
Stock will receive upon conversion thereof, in addition to the number of shares
of Common Stock receivable thereupon, such capital stock, other securities or
other property (including but not limited to cash and evidences of indebtedness)
that they would have received had their shares of Series B Preferred Stock been
converted into Common Stock on the date of such event and had retained such
capital stock, other securities or other property (including but not limited to
cash and evidences of indebtedness) receivable from the date of such event until
the Conversion Date.
(iv) Rules of Calculation;
Treasury Stock. The number of shares of Common Stock
outstanding will be calculated on the basis of the number of issued and
outstanding shares of Common Stock on the applicable date, not including shares
held in the treasury of the Corporation. The Corporation shall not
pay any dividend on or make any distribution to shares of Common Stock held in
treasury.
(v) Waiver. Notwithstanding
the foregoing, the Conversion Number will not be increased if the Corporation
receives, prior to the Measurement Date, written notice from the Holders
representing at least a majority of the then outstanding shares of Series B
Preferred Stock, voting together as a separate class, that no adjustment is to
be made as the result of a dividend or other distribution on shares of Common
Stock. This waiver will be limited in scope and will not be valid for
any dividend or other distribution on shares of Common Stock not specifically
provided for in such notice.
9. Mechanics of
Conversion. Upon conversion of any share of Series B Preferred
Stock, the Corporation shall promptly (but in no event later than three Business
Days after the Conversion Date) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate a certificate for the Underlying Shares issuable
upon such conversion. The Holder, or any Person so designated by the Holder to
receive Underlying Shares, shall be deemed to have become the holder of record
of such Underlying Shares as of the Conversion Date. Upon surrender of a
certificate following one or more partial conversions, the Corporation shall
promptly deliver to the Holder a new certificate representing the remaining
shares of Series B Preferred Stock.
10. Redemption
Rights.
(a) Redemption by the
Corporation. The Corporation shall have the right to
repurchase (a “Corporation
Redemption”) all or any portion of the then outstanding shares of Series
B Preferred Stock at a price, in cash, equal to the Stated Value per share, plus
all accrued but unpaid dividends thereon to the date of payment (the “Corporation Redemption
Price”), (i) at any time following the two-year anniversary of the
Original Issue Date, or (ii) if the average trading price of the Common Stock as
traded or quoted on the applicable Eligible Exchange equals or exceeds $4.74 per
share (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like, with respect to such shares) (the “Corporation Redemption Trading
Price”) for five consecutive trading days.
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(b) Notice for Corporation
Redemption. The Corporation must deliver notice of a Corporation
Redemption to the Holders at least 20 calendar days prior to the date of such
Corporation Redemption (the “Corporation Redemption Date”).
Such notice shall state the date of the Corporation Redemption Date, the
Corporation Redemption Price, the number of shares of Series B Preferred Stock
to be redeemed, and that the Holder is to surrender to the Corporation, at the
place or places where certificates for shares of Series B Preferred Stock are to
be surrendered for redemption, in the manner and at the price designated, the
certificate or certificates representing the shares of Series B Preferred Stock
to be redeemed. Upon receipt of notice of a Corporation Redemption, each Holder
shall have the option to convert any Series B Preferred Stock held by such
Holder into Common Stock, in accordance with Sections 8 and 9 hereof, at
any time on or prior to the Corporation Redemption Date.
(c) Redemption by the
Holder. At any time following the two-year anniversary of Original Issue
Date and prior to the 20-year anniversary of the Original Issue Date, upon the
written request of the Holder, the Series B Preferred Stock shall be redeemed by
the Corporation in cash for a redemption price of $3.75 (as adjusted for any
stock split, stock dividend, stock combination or other similar transactions
with respect to the Series B Preferred Stock) per share of Series B Preferred
Stock (the “Holder Redemption
Price”). Such redemption is referred to herein as a “Holder
Redemption.”
(d) Notice for Holder
Redemption. A Holder may request the redemption of its Series
B Preferred Stock in cash pursuant to this paragraph at any time following the
two-year anniversary of the Original Issue Date until the date that is 20 years
following the Original Issue Date, by delivering to the Corporation (i) a notice
requesting the redemption of its Series B Preferred Stock pursuant to this
Section 10(b), and (ii) the original certificate(s) evidencing the Series B
Preferred Stock being redeemed.
(e) Mechanics of
Redemption. Upon receipt of the original certificate(s) evidencing the
Series B Preferred Stock being redeemed, the Corporation shall promptly deliver
the Corporation Redemption Price or the Holder Redemption Price, as applicable,
to the Holders of the Series B Preferred Stock.
11. Reservation of Common
Stock. The Corporation shall at all times reserve and keep available for
issuance upon the conversion of shares of Series B Preferred Stock, such number
of its authorized but unissued shares of Common Stock as will from time to time
be sufficient to permit the conversion of all outstanding shares of Series B
Preferred Stock (including any shares of Series B Preferred Stock paid by the
Corporation as in kind dividends on the Series B Preferred Stock), and shall
take all action to increase the authorized number of shares of Common Stock if
at any time there shall be insufficient authorized but unissued shares of Common
Stock to permit such reservation or to permit the conversion of all outstanding
shares of Series B Preferred Stock; provided, that the
Holders approve any such action that requires a vote of the Holders in
accordance with Section 3.
12. Charges, Taxes and
Expenses. The issuance of certificates for shares of Series B Preferred
Stock and for Underlying Shares issued upon conversion of (or otherwise in
respect of) the Series B Preferred Stock shall be made without charge to the
Holders for any issue or transfer tax, withholding tax, transfer agent fee or
other incidental tax or expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Corporation; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the registration of any certificates for Common
Stock or Series B Preferred Stock in a name other than that of the Holder. The
Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring the Series B Preferred Stock or receiving
Underlying Shares in respect of the Series B Preferred Stock.
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13. Replacement
Certificates. If any certificate evidencing Series B Preferred Stock or
Underlying Shares is mutilated, lost, stolen or destroyed, the Corporation shall
issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution for such certificate, a new
certificate, but only upon receipt of evidence reasonably satisfactory to the
Corporation of such loss, theft or destruction and customary and reasonable
indemnity, if requested. Applicants for a new certificate under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Corporation
may prescribe.
14. Certain Adjustments.
The Corporation Redemption Trading Price is subject to adjustment from time to
time as set forth in this Section 14.
(a) Stock Dividends and
Splits. If the Corporation, at any time while any shares of Series B
Preferred Stock are outstanding, (i) pays a stock dividend on its Common Stock
or otherwise makes a distribution on any class of capital stock that is payable
in shares of Common Stock, (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, or (iii) combines outstanding shares
of Common Stock into a smaller number of shares, then in each such case the
Corporation Redemption Trading Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately following the close of business on the effective
date of such subdivision or combination.
(b) Fundamental
Transactions. If, at any time while any shares of Series B Preferred
Stock are outstanding, the Corporation consummates a Fundamental Transaction (as
defined below) set forth in subsections (i) or (iii) thereof, then (i) if such
transaction is for equity consideration, the Corporation Redemption Trading
Price shall be divided by the exchange ratio applicable in such transaction to
shares of Common Stock, (ii) if such transaction is for cash consideration, the
Corporation Redemption Trading Price shall be multiplied by a fraction of which
the numerator shall be the Fair Market Value of a share of the common stock of
the acquiring entity and the denominator shall be the Fair Market Value of a
share of Common Stock, and (iii) if such transaction is for a combination of
equity and cash consideration, the methods set forth in (i) and (ii) above shall
be used proportionately to determine the adjusted Corporation Redemption Trading
Price.
(c) Calculations. All
calculations under this Section 14 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.
(d) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 14, the Corporation at its expense will promptly compute such adjustment
in accordance with the terms hereof and prepare a certificate describing in
reasonable detail such adjustment and the transactions giving rise thereto,
including all facts upon which such adjustment is based. Upon written request,
the Corporation will promptly deliver a copy of each such certificate to each
Holder.
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15. Fundamental
Transactions. If, at any time while any shares of Series B Preferred
Stock are outstanding, (i) the Corporation effects any merger of the Corporation
into or consolidation of the Corporation with another Person, (ii) the
Corporation effects any sale of all or substantially all of its assets in one or
a series of related transactions, or (iii) the Corporation effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 14(a)) (in any such
case, a “Fundamental
Transaction”), then, to the extent such Fundamental Transaction does not
constitute a Liquidation Event, upon any subsequent conversion of Series B
Preferred Stock, each Holder shall have the right to receive, for each
Underlying Share that would have been issuable upon such conversion absent such
Fundamental Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the record holder of such Underlying Shares immediately prior to
such record date (the “Alternate
Consideration”).
16. Fractional Shares.
The Corporation shall not be required to issue or cause to be issued fractional
Underlying Shares upon conversion of Series B Preferred Stock. If any fraction
of an Underlying Share would, except for the provisions of this Section, be
issuable upon conversion of Series B Preferred Stock, the number of Underlying
Shares to be issued will be rounded up to the nearest whole share.
17. Notice of Corporate
Events. If the Corporation (i) declares a dividend or any
other distribution of cash, securities or other property in respect of its
Common Stock, including, without limitation, any granting of rights or warrants
to subscribe for or purchase any capital stock of the Corporation or any
subsidiary, or (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Liquidation Event or
Fundamental Transaction then the Corporation shall deliver to each Holder a
notice which shall specify (1) the record date for the purpose of such dividend
or distribution and a description of such dividend or distribution, (2) the date
on which any such Liquidation Event or Fundamental Transaction is expected to
become effective, and (3) the date, if any, that is to be fixed as to when the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon any such Liquidation Event or Fundamental
Transaction.
18. Notices. Any and all
notices or other communications or deliveries hereunder (including without
limitation any Conversion Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section prior to 5:00 p.m. (Houston time) on a Business Day, (ii) the next
Business Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Business Day or later than 5:00 p.m. (Houston time) on any
Business Day, (iii) the Business Day following the date of transmittal, if sent
by nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Corporation, to 777 Post Oak Blvd.,
Suite 910, Houston, Texas 77056, facsimile: (832) 369-6992, attention Chief
Financial Officer, or (ii) if to a Holder, to the address or facsimile number
appearing on the Corporation’s Preferred Stock Register or such other address or
facsimile number as such Holder may provide to the Corporation in accordance
with this Section.
19. Miscellaneous.
(a) The headings
herein are for convenience only, do not constitute a part of this Certificate of
Designation and shall not be deemed to limit or affect any of the provisions
hereof.
(b) No provision
of this Certificate of Designation may be amended, except in a written
instrument signed by the Corporation and Holders of at least a majority of the
shares of Series B Preferred Stock then outstanding.
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(c) The Series B
Preferred Stock (i) is senior to all other equity interests in the Corporation
outstanding as of the Original Issue Date in right of payment, whether with
respect to dividends or upon liquidation or dissolution, or otherwise and (ii)
will be senior to all other equity or equity equivalent securities issued by the
Corporation after the Original Issue Date.
(d) Any of the
rights of the Holders of Series B Preferred Stock set forth herein may be waived
by the affirmative vote of Holders of a majority of the shares of Series B
Preferred Stock then outstanding. No waiver of any default with respect to any
provision, condition or requirement of this Certificate of Designation shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.
[Signature Page
Follows.]
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IN WITNESS WHEREOF, the
Corporation has caused this Certificate of Designation for the Series B
Preferred Stock to be executed by its duly authorized officer on February 10,
2010.
| MAGNUM HUNTER RESOURCES CORPORATION | |||
|
|
By:
|
/s/ Gary C. Evans | |
| Name: Gary C. Evans | |||
| Title: Chairman and Chief Executive Officer | |||
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EXHIBIT
A
FORM
OF CONVERSION NOTICE
(To be
executed by the registered Holder in order to convert shares of Series B
Preferred Stock)
The
undersigned hereby elects to convert the number of shares of Series B Redeemable
Convertible Preferred Stock indicated below into shares of common stock, $0.01
par value per share (the “Common Stock”), of Magnum
Hunter Resources Corporation, a Delaware corporation (the “Corporation”), as of the date
written below.
|
__________________________________________________
|
|
|
Date
to Effect Conversion
|
|
|
__________________________________________________
|
|
|
Number
of shares of Series B Preferred Stock
owned
prior to Conversion
|
|
|
__________________________________________________
|
|
|
Number
of shares of Series B Preferred Stock to be Converted
|
|
|
__________________________________________________
|
|
|
Number
of shares of Common Stock to be Issued
|
|
|
__________________________________________________
|
|
|
Number
of shares of Series B Preferred Stock subsequent
to
Conversion
|
|
|
By:
_______________________________________________
Name
of
Holder:______________________________________
|
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