SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14c of the Securities Exchange Act of
1934
Check for appropriate box:
|X| Preliminary Information Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive Information Statement
BLACK WARRIOR WIRELINE CORP.
(Name of Registrant As Specified In Charter)
Payment of Filing Fee. (Check the appropriate box):
|X| No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
Common Stock, par value $0.0005 per share
2) Aggregate number of securities to which transaction applies:
23,414,664 shares of Common Stock
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total Fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
BLACK WARRIOR WIRELINE CORP.
100 ROSECREST LANE
COLUMBUS, MISSISSIPPI 39701
INFORMATION STATEMENT
Pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and
Regulation 14C and Schedule 14C Thereunder
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
INTRODUCTION
This notice and information statement (the "Information Statement") was mailed
on or about December [___], 2005 to our stockholders of record as of November
23, 2005 pursuant to Section 14C of the Exchange Act of 1934, as amended, to
inform our stockholders that the holders of a majority of our outstanding shares
of Common Stock executed written consents dated November 21, 2005 through
November 23, 2005 (the "Consent") providing for the following amendments (the
"Amendments") to our Restated Certificate of Incorporation, as amended (our
"Certificate of Incorporation"):
o reducing our issued and outstanding shares of Common Stock through a one
for ten reverse stock split,
o reducing the number of shares of Common Stock we are authorized to issue
from 175,00,000 shares to 35,000,000 shares,
o granting to our Board of Directors the authority to issue the 2,500,000
shares of Preferred Stock we are authorized to issue under our
Certificate of Incorporation in one or more series, without further
approval of stockholders and to establish the rights and terms of each
series,
o providing that, except as otherwise required by law or provided by the
terms of any series of our Preferred Stock, special meetings of our
stockholders for any purpose may be called at any time only by a majority
of our Board of Directors or the Chairman of our Board or our President,
and
o providing that, except as otherwise required by law or provided by the
terms of any series of our Preferred Stock, stockholders may not take any
action by written consent, unless such action is taken by unanimous
written consent.
This notice and information statement attached hereto shall be considered the
notice required under Section 228(e) of the Delaware General Corporation Law
(the "DGCL").
Our Board of Directors has unanimously approved the Amendments and holders of a
majority of our issued and outstanding shares of Common Stock have signed the
Consent. Accordingly, your approval is not required and is not being sought.
The solicitation relating to the Consent was made by us and the expenses of such
solicitation were borne by us. As of November 23, 2005, we had 23,414,664 shares
of Common Stock issued and outstanding. Each share of Common Stock was entitled
to one vote by written consent.
1
Please read this notice carefully. It describes the essential terms of the
Amendments and contains certain information concerning the Amendments. The terms
of the Amendments are attached to this Information Statement as Exhibits A, B
and C.
Our principal executive office is located at 100 Rosecrest Lane, Columbus,
Mississippi 39701.
2
This is Not a Notice of a Meeting of Stockholders and No Stockholders' Meeting
Will Be Held to Consider Any Matter Described Herein
BLACK WARRIOR WIRELINE CORP.
100 ROSECREST LANE
COLUMBUS, MISSISSIPPI 39701
Information Statement
Pursuant to Section 14 of the Securities Exchange Act of 1934
And Regulation 14C and Schedule 14C Thereunder
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the following action was taken pursuant to the
Consent to amend our Certificate of Incorporation:
1. To effect a one-for-ten reverse stock split, to be effective as of
the filing of the amendment to our Certificate of Incorporation
with the Delaware Secretary of State,
2. To reduce the number of shares of Common Stock we are authorized to
issue from 175,000,000 shares to 35,000,000 shares,
3. To grant the authority to our Board of Directors to issue the
2,500,000 shares of Preferred Stock we are authorized to issue
under our Certificate of Incorporation in one or more series,
without further approval of stockholders and to establish the
rights and terms of each series,
4. To provide that, except as otherwise required by law or provided by
the terms of any series of our Preferred Stock, special meetings of
stockholders for any purpose may be called at any time only by a
majority of our Board of Directors or the Chairman of our Board or
our President, and
5. To provide that, except as otherwise required by law or provided by
the terms of any series of our Preferred Stock, stockholders may
not take any action by written consent, unless such action is taken
by unanimous written consent.
Stockholders of record as of November 23, 2005, the date the holders of a
majority of our issued and outstanding shares of Common Stock sufficient to
amend our Restated Certificate of Incorporation signed the Consents, are
entitled to Notice of the foregoing.
We have asked brokers and other custodians, nominees and fiduciaries to forward
this Information Statement to the beneficial owners of the Common Stock held of
record by such persons and will reimburse such persons for out-of-pocket
expenses incurred in forwarding such material.
3
This Information Statement will serve as written Notice to stockholders pursuant
to Section 228(e) of the DGCL.
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS' MEETING
WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
By order of the Board of Directors
/s/ William L. Jenkins
---------------------------
William L. Jenkins
President
December [___], 2005
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THE AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION
BACKGROUND
Our management has been working with its financial and other advisors
over a considerable period of months seeking a means to implement a plan to
maximize our value to our securityholders. The improvement over the past months
in the market prices for oil and natural gas and the related improvement in the
oil and natural gas well service sector of the oil and natural gas industry has
had a favorable impact on our operating results. These conditions have caused
our management to believe that a restructuring of our company's equity
capitalization should lead to the realization of an enhanced value for the
benefit of our securityholders.
Prior to agreements we entered into on October 6, 2005, we had
outstanding a substantial amount of derivative securities, including our
Convertible Promissory Notes ("Convertible Notes") and warrants ("Warrants"),
when compared with the number of our outstanding shares of Common Stock. These
Convertible Notes and Warrants, if converted or exercised at their conversion
and exercise prices of $0.75 per share, would have resulted in the issuance of
an aggregate of 127,398,388 shares of our Common Stock, as of September 30,
2005. By way of comparison, as of the same date, we had 12,499,528 shares of
Common Stock issued and outstanding. We refer to these outstanding derivative
securities potentially convertible into or exercisable for shares of our Common
Stock as an "overhang." We believe that the overhang severely impedes our
ability to complete an equity financing and improve the equity market's
acceptance of our Common Stock and capital structure.
In early October 2005, we commenced our efforts to restructure our
equity capitalization by taking steps to cause our outstanding Warrants to be
exchanged for shares of our Common Stock. In connection with those efforts, on
October 6, 2005, we entered into agreements (the "October 6 Agreements") with
the holders of 52,693,685 of our 70,761,185 Warrants then outstanding. These
agreements entered into with Charles E. Underbrink and his family and related
entities (collectively, the "Underbrink Family Entities") and St. James Capital
Partners, L.P. and SJMB, L.P. (collectively, the "St. James Partnerships")
provide, among other things, for the exchange by the holders of the Warrants for
shares of our Common Stock at an exchange ratio of three Warrants for one share
of Common Stock. Of the 52,693,685 Warrants that are the subject of these
agreements, 11,938,409 Warrants held by the Underbrink Family Entities were
exchanged effective October 6, 2005 for 3,979,467 shares of Common Stock and
40,755,276 Warrants held by the St. James Partnerships will be exchanged for
13,585,091 shares no later than June 30, 2006, unless sold to us prior to then
under the terms of our October 6 Agreement with the St. James Partnerships.
The October 6 Agreements further provide that the Underbrink Family
Entities will convert the principal and all accrued interest on the Convertible
Notes they hold, which amounted to $3,082,604 as of September 30, 2005, into
shares of Common Stock and sell to us those shares subject to and at the closing
of a proposed underwritten public offering of shares of our Common Stock
discussed below along with the 3,979,467 shares of Common Stock issued in
exchange for their Warrants. The shares will be sold to us at the net price per
share we receive in the offering, provided the price is not less than $0.75 per
share (subject to adjustment for stock splits, divisions, reverse stock splits
or share combinations). Also in the October 6 Agreements, the St. James
Partnerships agreed to sell to us at the closing of the underwritten public
offering all of the Warrants they hold at a price, for each three Warrants they
sell, equal to the net price per share we receive in the underwritten offering
for one share of Common Stock, provided the price is not less than $0.75 for
each three Warrants sold (subject to adjustment for stock splits, divisions,
reverse stock splits or share combinations). In the event the underwritten
public offering has not been completed by June 30, 2006, the St. James
Partnerships agreed to exchange their Warrants for shares of Common Stock at an
exchange ratio of three Warrants for one share of Common Stock. The St. James
Partnerships also agreed to convert the principal and all accrued interest on
the Convertible Notes they hold, which amounted to $34,306,173 as of September
30, 2005, into shares of Common Stock and sell to us those shares, as well as
5,017,481 shares of Common Stock held by SJMB, L.P. issued to it in December
2000 on conversion of principal and accrued interest on the Convertible Notes it
holds, subject to and at the closing of the proposed underwritten public
offering.
5
On October 7, 2005, we commenced an offer (the "Exchange Offer") to the
39 holders of the remaining 18,067,500 Warrants to exchange their Warrants for
shares of Common Stock at the same exchange ratio of three Warrants for one
share of Common Stock. That exchange offer, as extended, terminated on November
14, 2005. The holders tendered 15,095,000 Warrants for exchange for 5,031,667
shares of Common Stock.
We intend to further pursue our recapitalization plans by taking the
following additional steps:
o We intend to undertake to complete an underwritten public offering
of shares of our Common Stock. Promptly after the expiration of the
Exchange Offer, we intend to seek to enter into arrangements with
one or more investment banking firms to effect an underwritten
public offering of our shares of Common Stock and intend to use the
net proceeds realized by us primarily for the following purposes:
o to fund the repurchase of the shares of Common Stock held by
or issuable on conversion of the Convertible Notes held by
the Underbrink Family Entities and the St. James
Partnerships, including the 5,017,481 shares held by SJMB,
L.P., conditioned on the net sales price per share being no
less than $0.75 per share (before reflecting stock splits,
divisions, reverse stock splits or share combinations). This
net sales price per share will be after deducting all
underwriting or selling commissions but before deducting our
other offering expenses.
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o to repurchase the shares of Common Stock issued to the
Underbrink Family Entities in exchange for their Warrants and
to repurchase the Warrants held by the St. James
Partnerships, subject to sufficient net proceeds from the
offering being available for such purposes and conditioned on
the net sales price, as applicable, being no less than $0.75
per share and each three Warrants (before reflecting stock
splits, divisions, reverse stock splits or share
combinations).
o repay all principal and accrued interest on any Convertible
Notes not previously converted into shares of Common Stock.
o repay outstanding senior secured indebtedness, including, if
the transaction is completed, a portion of the indebtedness
incurred in connection with our proposed acquisition of
Bobcat Pressure Control, Inc.
o for other general corporate purposes, including working
capital purposes.
THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF OUR
SECURITIES FOR SALE.
Under the terms of a Registration Rights Agreement dated December 17,
1999, the holders of our Convertible Notes and holders of Warrants who accept
our Exchange Offer have the right to include the shares of Common Stock issuable
on conversion of the Convertible Notes they hold and the shares of Common Stock
issued in exchange for their Warrants in the registration statement relating to
our proposed underwritten public offering and sell those shares to the
underwriters at the public offering price per share less underwriting discounts
and commission.
In addition to the reverse split of our outstanding shares and our
underwritten public offering, we intend in connection with the recapitalization
to implement the following:
o Subject to meeting all listing requirements, we intend
to seek to list our shares of Common Stock on the
Nasdaq Stock Market.
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o At or before the closing of the underwritten public
offering and the listing of our shares on the Nasdaq
Stock Market, we intend to reconstitute our Board of
Directors and, in order to meet Nasdaq Stock Market
listing requirements, elect additional members to our
Board of Directors so that a majority of our Board
members will be "independent" Directors, as defined
under Nasdaq rules.
THE REVERSE STOCK SPLIT
Our Board believes that the one for ten reverse split (the "Reverse
Split") is in our company's best interests, principally because our management
expects that it will lead to an increase in the trading price of our Common
Stock. Among the Nasdaq Stock Market qualification requirements we must meet in
order to list our shares of Common Stock for trading is the requirement that our
shares of Common Stock have a minimum bid price of $5.00 per share. Our Board
believes that the current price of our Common Stock impairs an efficient market
in our stock. This is due to several factors that impact lower priced stocks,
such as our Common Stock, including (1) a reluctance among certain institutions
to invest in low priced securities, (2) internal restrictions imposed by many
securities firms on the solicitation of orders for low priced stocks by
stockbrokers, (3) the ineligibility of our Common Stock for margin loans due to
its low share price, (4) a reluctance among analysts to write research reports
on low priced stocks due to the preceding factors, and (5) high transaction
costs relative to share price due to the prevailing rule that commissions
charged on the purchase and sale of stock, as a percentage of share price, are
higher on lower priced stocks. Our Board of Directors believes that the Reverse
Split will have the effect of increasing the market price per share of our
Common Stock and that such increase may, over time, alleviate some or all of the
factors noted above and lead to a more efficient market in our Common Stock. In
addition, an increase in the price of our Common Stock may also generate greater
investor interest in our Common Stock, thereby possibly enhancing the
marketability of our Common Stock to the financial community. In addition, the
resulting reduction in the number of issued and outstanding shares of Common
Stock and shares of Common Stock reserved for issuance on exercise of our
Warrants and conversion of our Convertible Notes can provide us with additional
authorized but un-issued shares which could be utilized for future acquisitions
or mergers or to otherwise carry out our business objectives. As is further
described below, the Amendments also reduce the number of shares of Common Stock
we are authorized to issue from 175,000,000 shares to 35,000,000 shares.
The immediate effect of the Reverse Split will be to reduce the number
of presently issued and outstanding shares of Common Stock from approximately
23,414,664 to approximately 2,341,466. Although the Reverse Split may increase
the market price of the Common Stock, no such increase can be assured or
calculated. The market price of our shares of Common Stock may not rise in
proportion to the reduction in the number of shares outstanding as a result of
the Reverse Split. There can be no assurance that the Reverse Split will lead to
a sustained increase in the market price of the Common Stock or whether the
factors discussed above will be alleviated. Stockholders should also be aware
that the Reverse Split may result in a decrease in the trading volume of the
Common Stock due to the decrease in the number of outstanding shares. The market
price of our Common Stock may also change as a result of other unrelated
factors, including our operating performance and other factors related to our
business as well as general market conditions.
8
No fractional shares will be issued in connection with the Reverse
Split. Stockholders who would otherwise be entitled to receive fractional shares
because they hold a number of shares of Common Stock that is not evenly
divisible will have the number of new shares to which they are entitled rounded
up to the nearest whole number of shares. No stockholders will receive cash in
lieu of fractional shares. The current number of holders of record of our shares
of Common Stock is approximately 424. Following the Reverse Split, the number of
our stockholders of record will remain approximately 424 as any of our
stockholders with less than ten shares will be rounded up in the exchange to one
share.
The Reverse Split will affect all of the holders of our Common Stock
uniformly and will not affect any stockholder's percentage ownership interest or
proportionate voting power, except for insignificant changes that will result
from the rounding up of fractional shares. Under the terms of our outstanding
Warrants and Convertible Notes, the Reverse Split will effect a reduction in the
number of shares of Common Stock issuable on exercise or conversion of the
Warrants and Convertible Notes in the same proportion as the reduction in the
number of outstanding shares. Such reduction will be uniform and will not affect
the percentage interest any holder of Warrants or Convertible Notes would hold
upon exercise or conversion, except for insignificant changes resulting from
rounding up or down the number of shares issuable on exercise or conversion.
The Reverse Split of the Common Stock is expected to become effective
on or about December [__], 2005 (the "Effective Date"). Upon the Effective Date,
we will notify the National Association of Securities Dealers, requesting that
the split be made effective on the Effective Date. We do not intend to provide
to you any further notification of the Effective Date other than the information
contained in this Information Statement. The Reverse Split will take place on
the Effective Date without any action on the part of the holders of our Common
Stock and without regard to current certificates representing shares of Common
Stock being physically surrendered for certificates representing the number of
shares of Common Stock each stockholder is entitled to receive as a result of
the Reverse Split. New certificates for shares of Common Stock will not be
issued at this time.
Except for our proposed underwritten public offering, we do not, at
this time, have any specific plans, proposals or arrangements to issue any of
our authorized but unissued shares of common stock for any purpose, including
future acquisitions and/or financings. The number of shares intended to be
offered, the dollar amount of proceeds to be raised in our proposed underwritten
public offering and the other terms and conditions of the offering have not been
definitively determined as of the date of this Information Statement and no
agreements have been entered into with respect to that underwritten offering.
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There are no adverse material consequences or any anti-takeover
provisions in either our Certificate of Incorporation or By-laws that would be
triggered as a consequence of the Reverse Split. Our Certificate of
Incorporation or By-laws do not address any material adverse consequence
resulting from the Reverse Split.
The form of the Amendment effecting the Reverse Split is attached
hereto as Exhibit A.
REDUCTION IN NUMBER OF SHARES OF COMMON STOCK WE ARE AUTHORIZED TO ISSUE
The Amendments have the further effect of decreasing the number of
shares of Common Stock, $.0005 par value, we are authorized to issue from
175,000,000 shares to 35,000,000 shares. The form of the amendment respecting
the reduction in the number of shares of Common Stock authorized is set forth in
Exhibit B. After giving effect to the Reverse Split but before the completion of
a proposed underwritten public offering and transactions to be completed
concurrently with the closing of that proposed offering, we will have 2,341,466
shares of Common Stock issued and outstanding and 8,059,720 shares reserved for
issuance on exercise of outstanding warrants, options, convertible securities
and other contractual rights.
We are currently authorized to issue 175,000,000 shares of Common
Stock. Our Board of Directors believes that a decrease in the number of
authorized shares of Common Stock from 175,000,000 shares to 35,000,000 shares
is in our company's best interests so as to reduce the franchise tax payable to
the State of Delaware with respect to our company's authorized capitalization.
For the year ended December 31, 2004, we paid a franchise tax of $107,000 to the
State of Delaware and expect our franchise tax for the year ended December 31,
2005 to be approximately $119,000. After amendment of our Certificate of
Incorporation to reduce the authorized shares, such franchise tax will be
reduced to approximately $37,500 for the year ended December 31, 2006, assuming
our total assets remain materially unchanged.
The reduction in the authorized shares of Common Stock will not reduce
or otherwise affect, either before or after the Reverse Split, our presently
outstanding shares or the shares reserved for issuance on exercise of
outstanding warrants, options, convertible securities or other contractual
rights. In addition, the Reverse Split will not affect our authorized shares
either before or after the amendment reducing the number of our authorized
shares of Common Stock becomes effective.
10
Our Board of Directors will have the authority to issue our authorized
but unissued and unreserved shares of Common Stock without further stockholder
approval, subject to compliance with the rules of any stock exchange on which
our shares of Common Stock are listed and other requirements of law.
Except for our proposed underwritten public offering, we do not, at
this time, have any specific plans, proposals or arrangements to issue any of
our authorized but unissued shares of common stock for any purpose, including
future acquisitions and/or financings. The number of shares intended to be
offered, the dollar amount of proceeds to be raised in our proposed underwritten
public offering and the other terms and conditions of the offering have not been
definitively determined as of the date of this Information Statement and no
agreements have been entered into with respect to that underwritten offering.
The form of amendment effecting the reduction in authorized shares of
Common Stock is set forth in Exhibit B hereto.
The amendment will become effective on the date that a certificate of
amendment to the Certificate of Incorporation is filed with the Secretary of
State of the State of Delaware.
AMENDMENT OF PREFERRED STOCK
Under our Certificate of Incorporation as effective at this time, we
are authorized to issue up to 2,500,000 shares of Preferred Stock. Under the
amendment to our Certificate of Incorporation effected pursuant to the Consent,
our Board of Directors will have the authority, by resolution adopted by the
Board, to issue our shares of Preferred Stock, in one or more series, without
further approval of the stockholders, and to establish the rights and terms
relating to dividends, conversion, voting, redemption liquidation preferences,
sinking funds and any other rights, preferences, privileges and restrictions
applicable to each such series of Preferred Stock. We have no shares of
Preferred Stock outstanding and have no present plans to issue any shares of
Preferred Stock.
Our Board of Directors believes that granting the authorization to the
Board of Directors to issue the Preferred Stock in one or more series and to be
able to establish the rights and terms of each series is in our best interests
since it will provide us with greater flexibility to issue Preferred Stock in
connection with financings and for other corporate purposes, including issuances
in connection with possible acquisitions. Our management from time to time
reviews corporate opportunities that would involve the possible issuance of
Preferred Stock. Our Board of Directors believes that authorizing the Board of
Directors to issue the shares of the Preferred Stock in one or more series and
without further stockholder approval will improve the ability of our company to
take advantage of these opportunities as they may arise from time to time.
11
One of the effects of this amendment may be to enable our Board of
Directors to render more difficult or to discourage an attempt to obtain control
of us by means of a tender offer, proxy contest, merger or otherwise, and, as a
result, protect the continuity of our management. The issuance of shares of the
Preferred Stock under the Board of Directors' authority described above may
adversely affect the rights of the holders of Common Stock. For example,
Preferred Stock issued by us may rank prior to the Common Stock as to dividend
rights, liquidation preference or both, may have full or limited voting rights
and may be convertible into shares of Common Stock. Accordingly, the issuance of
shares of Preferred Stock may discourage bids for the Common Stock or may
otherwise adversely affect the market price of the Common Stock. See "Potential
Anti-Takeover Effects of Certain of the Amendments" below.
The form of amendment respecting the Preferred Stock is set forth in
Exhibit B hereto. The amendment will become effective on the date that a
certificate of amendment to the Certificate of Incorporation is filed with the
Secretary of State of the State of Delaware.
AUTHORITY TO CALL SPECIAL MEETINGS OF STOCKHOLDERS
Our By-laws currently provide in the first sentence of Section 2 of
Article II as follows:
"Except as otherwise required by statute or the Corporation's
Restated Certificate of Incorporation, special meetings of
stockholders may be called by the Board of Directors, the
Chairman of the Board or the President."
Under the amendment adopted by the Consent, there is added to our
Certificate of Incorporation a new provision as follows:
"TWELFTH: Unless otherwise provided by the DGCL, by this
Certificate of Incorporation or by any provisions established
pursuant to Article FOURTH hereof with respect to the rights
of holders of one or more outstanding series of Preferred
Stock, special meetings of the stockholders of the Corporation
may be called at any time only by the Chairman of the Board of
Directors, if there is one, by the President, if there is one,
or by the Board of Directors pursuant to a resolution approved
by the affirmative vote of at least a majority of the members
of the Board of Directors, and no such special meeting may be
called by any other person or persons."
At present, our Certificate of Incorporation does not contain a
provision determining who can call a special meeting of stockholders. The only
provision relating to determining who can call a special meeting appears in our
By-laws is quoted above. The Delaware General Corporation Law (the "DGCL")
provides that special meetings of stockholders may be called by the Board of
Directors or by such person or persons as may be authorized by the certificate
of incorporation or by-laws of the corporation.
12
In order to establish clearly the persons who have authority to call a
special meeting and to establish that our stockholders do not have the authority
to call a special meeting, our Board of Directors has adopted the amendment.
Under the DGCL, once the amendment has been filed with the State of Delaware,
the provision granting authority to call a special meeting of stockholders can
only be further amended or eliminated upon the Board of Directors adopting a
resolution setting forth the proposed amendment, declaring its advisability and
calling a special meeting of stockholders for the consideration of the amendment
or directing that the amendment proposed be considered at the next annual
meeting of stockholders. At such a meeting, the holders of a majority of the
outstanding shares of each class of our Common Stock entitled to vote thereon
would be required to vote in favor of the amendment in order for it to be
adopted. Accordingly, the amendment granting authority to call a special meting
will be unable to be amended or repealed without further action taken by our
Board of Directors.
The amendment provides specifically that stockholders do not have the
power to call a special meeting of stockholders. Our Board believes that
following the completion of our recapitalization and proposed underwritten
public offering, it will be in our company's interest that our Certificate of
Incorporation clearly provides that stockholders of our company are not
authorized to call a special meeting of stockholders. Neither our Certificate of
Incorporation nor our By-laws presently confer such authority on a stockholder
and we do not concede that a stockholder has authority under the DGCL or
otherwise to call a special meeting whether or not the amendment is adopted.
However, our Board believes that the amendment makes clear that a stockholder
does not have such authority. Otherwise, a stockholder might seek to assert that
it has authority to call a special meeting and attempt to do so for purposes
that, in the opinion of our Board of Directors, may not be in the best interests
of our company and its stockholders. Our Board believes that any proposals of
stockholders or any other persons with respect to which stockholder approval may
be required should first be presented to our Board for its consideration and
action. Such proposals may include matters that may involve or may lead to
proposals involving a change of control of our company or otherwise. See
"Potential Anti-Takeover Effects of Certain of the Amendments" below.
The form of amendment respecting the Preferred Stock is set forth in
Exhibit B hereto. The amendment will become effective on the date that a
certificate of amendment to the Certificate of Incorporation is filed with the
Secretary of State of the State of Delaware.
ELIMINATION OF STOCKHOLDER ACTION BY CONSENT
The Consent also adopts the following amendment to our Certificate of
Incorporation:
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"THIRTEENTH: Unless otherwise provided by the DGCL, by this
Certificate of Incorporation or by any provisions established
pursuant to Article FOURTH hereof with respect to the rights
of holders of one or more outstanding series of Preferred
Stock, no action required to be taken or that may be taken at
any annual or special meeting of the stockholders of the
Corporation may be taken without a meeting, and the power of
the stockholders of the Corporation to consent in writing to
the taking of any action by written consent without a meeting
is specifically denied, unless such action without a meeting
is taken by unanimous written consent."
Section 228(a) of the DGCL provides that, unless otherwise provided in
the certificate of incorporation of a corporation, any action required to be
taken at an annual or special meeting of stockholders or that may be taken at
such a meeting may be taken without a meeting, without prior notice and without
a vote, if a consent or consents in writing relating to the action to be taken
are signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote were present and voted.
Prior to adoption of this amendment, our Certificate of Incorporation
did not contain any provision limiting or restricting the use of written
consents by our stockholders. The effect of this amendment will be to eliminate
the ability of stockholders to take action by consent that is either required to
be taken by stockholders in order to approve a proposal or that may be taken by
stockholders. All such action will be required to be taken at an annual or
special meeting of stockholders.
The form of amendment eliminating the ability of stockholders to take
action by consent is set forth in Exhibit C hereto. The amendment will become
effective on the date that a certificate of amendment to the Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware.
POTENTIAL ANTI-TAKEOVER EFFECTS OF CERTAIN OF THE AMENDMENTS
The amendments to our Certificate of Incorporation relating to the
authority to call a special meeting of stockholders, eliminating the ability of
stockholders to take action by consent, and providing our Board of Directors
with authority regarding the Preferred Stock (which we refer to collectively as
the "Defensive Amendments"), may discourage or make more difficult the
acquisition of control of our company by means of a tender offer, open market
purchase, proxy contest or otherwise. These provisions may have the effect of
discouraging certain types of coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control of our company
first to negotiate with our management. Our Board of Directors believes that the
foregoing measures which are substantially similar to takeover-related measures
in effect for many other publicly-held companies, provide benefits by enhancing
our management's potential ability to negotiate with the proponent of any
unfriendly or unsolicited proposal to take over or restructure our company that
outweigh the disadvantages of discouraging such proposals because, among other
things, negotiation of such proposals could result in an improvement of their
terms.
14
While there necessarily can be no assurance in this regard, our Board
of Directors also believes that the foregoing measures are not likely to have a
material impact on market prices for our Common Stock in circumstances other
than those described above in light of, among other factors, the existence of
generally comparable measures in effect for other publicly- held companies and
our Board's belief that market prices will be influenced most significantly by
our actual results of operations and prospects, general market and economic
conditions, and other traditional determinants of stock market prices rather
than takeover-related measures and other corporate governance provisions.
Our Board of Directors has evaluated the potential vulnerability of our
company and its stockholders to the threat of unfair or coercive takeover
tactics after our proposed underwritten public offering and has considered the
range of possible responses to any such threat and believes these Defensive
Amendments are a reasonable response to an unfriendly or coercive takeover
proposal.
The Defensive Amendments are not being adopted in response to any
effort, of which our Board of Directors is aware, to accumulate the Common Stock
or to obtain control of our company. Our Board of Directors believes that the
use of coercive tactics can place undue pressure on a corporation's board of
directors and stockholders to act hastily and on incomplete information and,
therefore, can be highly disruptive to a corporation as well as result in unfair
differences in treatment of stockholders who act immediately in response to an
announcement of takeover activity and those who choose to act later, if at all.
The Defensive Amendments also may delay the assumption of control by a holder of
a large block of our Common Stock and the removal of incumbent management, even
if such removal might be beneficial to some or all of our stockholders.
Furthermore, the Defensive Amendments may have the effects of deterring or
frustrating certain types of future takeover attempts that may not be approved
by the incumbent Board of Directors, but that the holders of a majority of the
shares of Common Stock may deem to be in their best interests or in which some
or all of our stockholders may receive a substantial premium over prevailing
market prices for their stock. By having the effect of discouraging takeover
attempts, the Defensive Amendments also could have the incidental effect of
inhibiting certain changes in management (some or all of the members of which
might be replaced in the course of a change of control) and also the temporary
fluctuations in the market price of the Common Stock that often result from
actual or rumored takeover attempts.
In addition, the amendment regarding the terms of our authorized
Preferred Stock may have the effect of making more difficult and discouraging an
attempt to acquire control of our company without approval by our Board of
Directors, even if such transaction or occurrence may be favorable to the
interests of some or all of our stockholders. Our Certificate of Incorporation
currently authorizes our Board of Directors to issue shares of preferred stock
and, as amended following execution of the Consent and filing the Certificate of
Amendment, having such rights, preferences and privileges as designated by the
Board of Directors without stockholder approval. We currently are authorized to
issue 2,500,000 shares of preferred stock, none of which has been issued. As
amended, such authorized and unissued preferred stock could be used by our Board
of Directors for defensive purposes, including the issuance of shares having
special privileges or rights to third parties, which may have the effect of
delaying or discouraging an attempt to acquire control of our company. For
example, our Board of Directors has the ability to adopt a stockholder rights
plan pursuant to which it might issue shares of preferred stock having the same
economic value and voting rights as shares of Common Stock upon the occurrence
of certain triggering events. While our management has no present intention to
adopt any such rights plan, it reserves the right to do so in the future.
15
BUSINESS COMBINATIONS UNDER DELAWARE LAW
In the event our shares of Common Stock are authorized for quotation on
the Nasdaq Stock Market or listed on another national securities exchange, we
will become subject to the provisions of Section 203 of the DGCL. In general,
Section 203 prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
Section 203 defines a "business combination" as a merger, asset sale or
other transaction resulting in a financial benefit to the interested
stockholders. Section 203 defines an "interested stockholder" as a person who,
together with affiliates and associates, owns, or, in some cases, within three
years prior, did own, 15% or more of the corporation's voting stock. Under
Section 203, a broad range of business combinations between us and an interested
stockholder is prohibited unless:
o our board of directors approved either the business
combination or the transaction that resulted in the
stockholder becoming an interested stockholder prior to the
date the person attained the status;
o upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of our voting stock
outstanding at the time the transaction commenced, excluding,
for purposes of determining the voting stock outstanding (but
not the outstanding voting stock owned by the interested
stockholder), those shares (i) owned by persons who are
directors and also officers and (ii) owned by employee stock
plans in which employee participants do not have the right to
determine confidentially whether shares held under the plan
will be tendered in a tender or exchange offer; or
16
o the business combination is approved by our board of
directors at or subsequent to the time the person became an
interested stockholder and authorized at an annual or special
meeting of the stockholders, and not by written consent, by
the affirmative vote of the holders of at least 66?% of the
outstanding voting stock that is not owned by the interested
stockholder.
This provision has an anti-takeover effect with respect to transactions
not approved in advance by our board of directors, including
discouraging takeover attempts that might result in a premium over the
market price for the shares of our common stock. With approval of our
stockholders, we could amend our certificate of incorporation in the
future to elect not to be governed by the DGCL's anti-takeover law.
This election would be effective 12 months after the adoption of the
amendment and would not apply to any business combination between us
and any person who became an interested stockholder on or before the
adoption of the amendment.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our Common Stock is quoted in the OTC Bulletin Board(R) under
the trading symbol "BWWL". The following table sets forth the high and low bid
prices for our Common Stock for the periods indicated as provided by the OTC
Bulletin Board(R). The prices included in the following table do not give effect
to the Reverse Split.
BID PRICES
----------------------------------------------------
2003 HIGH LOW
---------------------------------------------------------------------------------------
First Quarter $0.40 $0.10
Second Quarter $0.50 $0.24
Third Quarter $0.50 $0.30
Fourth Quarter $0.44 $0.24
BID PRICES
----------------------------------------------------
2004 HIGH LOW
---------------------------------------------------------------------------------------
First Quarter $0.39 $0.25
Second Quarter $0.40 $0.10
Third Quarter $0.20 $0.10
Fourth Quarter $0.20 $0.10
17
BID PRICES
----------------------------------------------------
2005 HIGH LOW
---------------------------------------------------------------------------------------
First Quarter $0.27 $0.15
Second Quarter $0.61 $0.12
Third Quarter $0.90 $0.45
Fourth Quarter (through $1.10 $0.70
November 21)
There has been very limited trading activity in our Common Stock. By
reason of this limited trading activity, the quoted prices for our Common Stock
have been subject to wide fluctuations on very limited trading activity in the
Common Stock.
The above amounts represent inter-dealer quotations without adjustment
for retail markups, markdowns or commissions, and do not represent the prices of
actual transactions. On November 21, 2005, the closing bid quotation for our
Common Stock, as reported by the OTC Bulletin Board(R), was $0.94.
As of November 21, 2005, we had approximately 424 stockholders of
record and we believe we have in excess of 500 beneficial holders of our Common
Stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information known to us about the
beneficial ownership of our Common Stock as of November 23, 2005 for: (1) each
person, entity or group that is known by us to beneficially own five percent or
more of our Common Stock; (2) each of our directors; (3) each of our named
executive officers as defined in Item 402(a)(2) of Regulation S-K; and (4) our
directors and executive officers as a group. To the best of our knowledge, each
stockholder identified below has voting and investment power with respect to all
shares of Common Stock shown, unless otherwise indicated by footnote. All such
ownership information is before reflecting the Reverse Split.
19
NUMBER OF SHARES PERCENTAGE OF
NAME AND ADDRESS (1)(2) OWNED OUTSTANDING SHARES(3)
---------------------------------------------------------------------------------------------
William L. Jenkins 3,708,252(4) 14.0%
Danny R. Thornton 1,250,666(5) 5.1%
Ron E. Whitter 400,000(6) 1.7%
Charles E. Underbrink(7) 100,318,455 89.0%
c/o St. James Capital Corp.
4299 San Felipe
Suite 120
Houston, TX 77027
James H. Harrison(8) 92,041,321 83.3%
c/o St. James Capital Corp.
4299 San Felipe - Suite 120
Houston, TX 77027
St. James Partnerships(9) 92,041,321(10) 83.3%
4299 San Felipe - Suite 120
Houston, Texas 77027
Bendover Corp. 3,314,235(11) 14.2%
Alan W. Mann
M. Dale Jowers
1053 The Cliffs Blvd.
Montgomery, TX 77356
All Directors and Officers as a Group 108,991,608 92.9%
(5 persons)
(1) This tabular information is intended to conform with Rule 13d-3
promulgated under the Securities Exchange Act of 1934 relating to the
determination of beneficial ownership of securities. The tabular
information gives effect to the exercise of warrants or options
exercisable within 60 days of the date of this table owned in each case
by the person or group whose percentage ownership is set forth opposite
the respective percentage and is based on the assumption that no other
person or group exercise their option.
(2) Unless otherwise indicated, the address for each of the above is c/o
Black Warrior Wireline Corp., 100
Rosecrest Lane, Columbus, Mississippi 39701.
(3) The percentage of outstanding shares calculation is based upon
23,414,664 shares outstanding as of November 23, 2005, except as
otherwise noted.
(4) Includes 3,000,000 shares issuable on exercise of options.
(5) Includes 1,250,000 shares issuable on exercise of an option.
(6) Includes 400,000 shares issuable on exercise of an option.
(7) Mr. Underbrink is Chairman of St. James Capital Corp. and SJMB, L.L.C.
St. James Capital Corp. and SJMB, L.L.C. are the general partners of
St. James Capital Partners, L.P. ("SJCP") and SJMB, L.P., ("SJMB"),
respectively. Includes an aggregate of 5,017,481 shares held directly
by SJMB and 140,000 shares held directly or indirectly by Mr.
Underbrink. Also includes 89,277,504 shares issuable on exercise of
warrants and conversion of notes and accrued interest through November
21, 2005 deemed held beneficially by Mr. Underbrink because of his
relationships with the St. James Partnerships. Also includes 2,253,664
shares issuable on exercise of warrants and conversion of notes and
accrued interest through November 21, 2005 held by the Underbrink
Family Entities.
(8) Mr. Harrison is Chief Financial Officer of St. James Capital Corp. and
SJMB, L.L.C., the general partners of SJCP and SJMB, respectively.
Includes shares issuable to SJCP and SJMB on exercise of warrants and
conversion of notes and accrued interest through November 21, 2005 that
may be deemed held beneficially by Mr. Harrison because of his
relationships with SJCP and SJMB. Mr. Harrison disclaims a beneficial
ownership of such securities. Other than the holdings of SJCP and SJMB
in which Mr. Harrison disclaims a beneficial interest, Mr. Harrison
holds no shares in which he has a direct or indirect beneficial
interest.
(9) The St. James Partnerships include St. James Capital Partners, L.P. and
SJMB, L.P.
(10) Includes 5,017,481 shares held by SJMB, as well as an aggregate of
84,295,840 shares issuable to the St. James Partnerships on conversion
of notes and accrued interest through November 21, 2005 and on exercise
of warrants.
(11) We have relied on the information set forth in Amendment No. 3 to the
Schedule 13D filed by such persons on February 4, 2000.
19
FEDERAL INCOME TAX CONSEQUENCES
The following summary of material federal income tax consequences of
the Reverse Split does not purport to be a complete discussion of all of the
possible federal income tax consequences. Further, it does not address any
state, local, foreign or other income tax consequences, nor does it address the
tax consequences to stockholders that are subject to special tax rules, such as
banks, insurance companies, regulated investment companies, personal holding
companies, foreign entities, nonresident alien individuals, broker-dealers and
tax-exempt entities. The discussion is based on the United States federal income
tax laws as of the date of this Information Statement. Such laws are subject to
change retroactively as well as prospectively. This summary also assumes that
the shares of Common Stock are held as "capital assets," as defined in the
Internal Revenue Code of 1986, as amended. The tax treatment of a shareholder
may vary depending on the facts and circumstances of such shareholder.
EACH SHAREHOLDER IS URGED TO CONSULT WITH SUCH SHAREHOLDER'S TAX ADVISOR WITH
RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE REVERSE SPLIT.
No gain or loss will be recognized by a shareholder as a result of the
Reverse Split. The aggregate tax basis of the shares received in the Reverse
Split will be the same as the shareholder's aggregate tax basis in the shares
exchanged. The shareholder's holding period for the shares received in the
Reverse Split will include the period during which the shareholder held the
shares surrendered as a result of the Reverse Split. Our views regarding the tax
consequences of the Reverse Split are not binding upon the Internal Revenue
Service or the courts, and there is no assurance that the Internal Revenue
Service or the courts would accept the positions expressed above. The state and
local tax consequences of the Reverse Split may vary significantly as to each
shareholder, depending on the state in which such shareholder resides.
APPRAISAL RIGHTS
Pursuant to the Delaware General Corporation Law, the holders of our
Common Stock are not entitled to dissenters' rights in connection with the
Reverse Split. Furthermore, we do not intend to independently provide those
stockholders with any such rights.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Information Statement, our authorized capital
stock consists of 175,000,000 shares of Common Stock, $0.0005 par value per
share, and 2,500,000 shares of Preferred Stock, $0.01 par value per share.
Giving effect to the Amendments, our authorized capital stock will consist of
35,000,000 shares of Common Stock, $0.0005 par value per share, and 2,500,000
shares of Preferred Stock, $0.01 par value per share.
The following is a summary of the material provisions of our capital
stock.
20
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Because holders of Common Stock do
not have cumulative voting rights, the holders of a majority of the shares of
Common Stock can elect all of the members of the Board of Directors standing for
election. The holders of Common Stock are entitled to receive dividends as may
be declared by the Board of Directors. Upon our liquidation, dissolution or
winding up, and subject to any prior rights of outstanding Preferred Stock, the
holders of our Common Stock will be entitled to share pro rata in the
distribution of all of our assets available for distribution to our stockholders
after satisfaction of all of our liabilities and the payment of the liquidation
preference of any Preferred Stock that may be outstanding. There are no
redemption or sinking fund provisions applicable to our Common Stock. All
outstanding shares of Common Stock are fully paid and non-assessable. The
holders of our Common Stock will have no preemptive or other subscription rights
to purchase our Common Stock.
PREFERRED STOCK
Upon adoption of the Amendments and the filing of the certificate of
amendment with the Delaware Secretary of State, our Board of Directors will have
the authority to issue up to 2,500,000 shares of Preferred Stock in one or more
series and to fix the rights, preferences, privileges and restrictions of the
Preferred Stock, including dividend rights, dividend rates, conversion rates,
voting rights, terms of redemption, redemption prices, liquidation preferences,
sinking funds and other rights, preferences, privileges and restrictions
applicable to each series and the number of shares constituting any series or
the designation of the series, which may be senior to those of the Common Stock,
without further vote or action by the stockholders. We have no present plans to
issue any shares of Preferred Stock.
Immediately following the effectuation of the Reverse Split as
described previously, we will have approximately 2,151,233 shares of Common
Stock issued and outstanding and no shares of Preferred Stock issued and
outstanding.
SHAREHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING
Under SEC rules, stockholders intending to present a proposal at the
Annual Meeting in 2006 and have it included in our proxy statement must submit
the proposal in writing to Secretary, Black Warrior Wireline Corp., 100
Rosecrest Lane, Columbus, Mississippi 39701. We must receive the proposal no
later than a reasonable time before the date of our meeting.
21
WHERE YOU CAN FIND MORE INFORMATION
Additional information about us is contained in our periodic and
current reports filed with the U.S. Securities and Exchange Commission (the
"Commission"). These reports, their accompanying exhibits and other documents
filed with the Commission, may be inspected without charge at the Public
Reference Section of the Commission at 100 F Street, NE, Washington, DC 20549.
Copies of such material may also be obtained from the Commission at prescribed
rates. The Commission also maintains a Web site that contains reports, proxy and
information statements and other information regarding public companies that
file reports with the Commission. Copies of these reports may be obtained from
the Commission's EDGAR archives at http://www.sec.gov/index.htm.
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE HARBOR"
FOR FORWARD-LOOKING STATEMENTS
With the exception of historical matters, the matters discussed in this
Information Statement are "forward-looking statements" as defined under the
Securities Exchange Act of 1934, as amended, that involve risks and
uncertainties. We intend that the forward-looking statements in this Information
Statement be covered by the safe-harbor provisions for forward-looking
statements contained in the Securities Exchange Act of 1934, as amended, and
this statement is included for the purpose of complying with these safe-harbor
provisions. Forward-looking statements include, but are not limited to, our
ability to generate and maintain improved revenues and attain and maintain
profitability and cash flow which in turn are based on the stability and level
of prices for oil and natural gas, predictions and expectations as to the
fluctuations in the levels of oil and natural gas prices, pricing in the oil and
natural gas services industry and the willingness of customers to commit for oil
and natural gas well services, our ability to raise debt or equity capital to
recapitalize or restructure our balance sheet and to obtain additional financing
when and if required, our ability to maintain compliance with the covenants of
our various loan documents and other agreements pursuant to which our
securities, including debt instruments, have been issued and obtain waivers of
violations that occur and consents to amendments as required, our ability to
compete in the premium oil and natural gas services market, our ability to
re-deploy our equipment among regional operations as required, and our ability
to provide services using state of the art tooling. Our inability to meet these
objectives or requirements or the consequences resulting from adverse
developments in general economic conditions, changes in capital markets, adverse
developments in the oil and natural gas industry, developments in international
relations and the commencement or expansion of hostilities by the United States
or other governments and events of terrorism, declines and fluctuations in the
prices for oil and natural gas, and other factors could have a material adverse
effect on us. Material declines in the prices for oil and natural gas can be
expected to adversely affect our revenues. Various risk factors could cause our
operating results and financial condition to differ materially from those
expressed in any forward-looking statements made by us and could adversely
affect its financial condition and its ability to pursue its recapitalization
plans, business strategy and other plans.
By Order of the Board of Directors:
/s/ William L. Jenkins
----------------------
William L. Jenkins
President
December _____, 2005
22
EXHIBIT A
CERTIFICATE OF AMENDMENT TO
THE RESTATED CERTIFICATE OF INCORPORATION OF BLACK WARRIOR WIRELINE CORP.
A new Article Eleventh of the Certificate of Incorporation reading as
follows shall be added thereto: "ELEVENTH: That each ten (10) shares of
previously authorized Common Stock issued and outstanding immediately prior to
the effective date of this Certificate of Amendment shall, upon the effective
date of this Certificate of Amendment pursuant to the DGCL, without the
necessity of any further action, automatically be combined into and immediately
represent one (1) validly issued, fully paid and non-assessable share of Common
Stock of the Corporation, par value $0.0005 per share. The Corporation shall not
issue fractional shares with respect to the combination. Any fractional share
that would otherwise be issued will be rounded to a whole share."
23
EXHIBIT B
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION
OF BLACK WARRIOR WIRELINE CORP.
RESOLVED, that Article Fourth of the Certificate of Incorporation of
this corporation be hereby amended to read in its entirety as follows:
"FOURTH: The total number of shares of capital stock of all
classes which the Corporation shall have authority to issue is
Thirty-Seven Million Five Hundred Thousand (37,500,000) shares, of
which Thirty-Five Million (35,000,000) shares, of a par value of $.0005
per share, shall be designated "Common Stock", and Two Million Five
Hundred Thousand (2,500,000) shares, of a par value of $.01 per share,
shall be designated "Preferred Stock."
The Board of Directors is authorized, subject to
limitations prescribed by law and the provisions of the Article FOURTH,
to provide for the issuance of the shares of Preferred Stock in series,
and by filing a certificate pursuant to the applicable law of the State
of Delaware, to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each
series shall include, but not be limited to, determination of the
following:
(a) the distinctive designation and number of shares of that
series;
(b) the rate of dividends (or the method of calculation
thereof) payable with respect to shares of that series, the dates,
terms and other conditions upon which such dividends shall be payable,
and the relative rights of priority of such dividends to dividends
payable on any other class or series of capital stock of the
Corporation;
(c) the nature of the dividend payable with respect to shares
of that series as cumulative, noncumulative or partially cumulative,
and if cumulative or partially cumulative, from which date or dates and
under what circumstances;
(d) whether shares of that series shall be subject to
redemption, and, if made subject to redemption, the times, prices,
rates, adjustments and other terms and conditions of such redemption
(including the manner of selecting shares of that series for redemption
if fewer than all shares of such series are to be redeemed);
(e) the rights of the holders of shares of that series in the
event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation (which rights may be different if such action is
voluntary than if it is involuntary), including the relative rights of
priority in such event as to the rights of the holders of any other
class or series of capital stock of the Corporation;
(f) the terms, amounts and other conditions of any sinking or
similar purchase or other fund provided for the purchase or redemption
of shares of that series;
24
(g) whether shares of that series shall be convertible into or
exchangeable for shares of capital stock or other securities of the
Corporation or of any other corporation or entity, and, if provision be
made for conversion or exchange, the times, prices, rates, adjustments,
and other terms and conditions of such conversion or exchange;
(h) the extent, if any, to which the holders of shares of that
series shall be entitled (in addition to any voting rights required by
law) to vote as a class or otherwise with respect to the election of
directors or otherwise;
(i) the restrictions and conditions, if any, upon the issue or
reissue of any additional Preferred Stock ranking on a parity with or
prior to shares of that series as to dividends or upon liquidation,
dissolution or winding up;
(j) any other repurchase obligations of the Corporation,
subject to any limitations of applicable law; and
(k) any other designations, powers, preferences, rights,
qualifications, limitations or restrictions of shares of that series.
Any of the designations, powers, preferences, rights,
qualifications, limitations or restrictions of any series of Preferred Stock may
be dependent on facts ascertainable outside this Certificate of Incorporation,
or outside the resolution or resolutions providing for the issue of such series
of Preferred Stock adopted by the Board of Directors pursuant to authority
expressly vested in it by this Certificate of Incorporation. Except as
applicable law or this Certificate of Incorporation otherwise may require, the
terms of any series of Preferred Stock may be amended without consent of the
holders of any other series of Preferred Stock or any class of capital stock of
the Corporation.
The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each other
series of Preferred Stock shall, in each case, be as fixed from time to time by
the Board of Directors in the resolution or resolutions adopted pursuant to the
authority granted in this Division A of this Article FOURTH, and the consent, by
class or series vote or otherwise, of holders of Preferred Stock of such series
of Preferred Stock as are from time to time outstanding shall not be required
for the issuance by the Board of Directors of any other series of Preferred
Stock, whether or not the powers, preferences and rights of such other series
shall be fixed by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of holders of at least a majority (or such greater proportion as shall
be therein fixed) of the outstanding shares of such series voting thereon shall
be required for the issuance of shares of any or all other series of Preferred
Stock.
Shares of any series of Preferred Stock shall have no voting
rights except as required by law or as provided in the relative powers,
preferences and rights of such series."
25
EXHIBIT C
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORARTION
OF BLACK WARRIOR WIRELINE CORP.
"TWELFTH: Unless otherwise provided by the DGCL, by this
Certificate of Incorporation or by any provisions established
pursuant to Article FOURTH hereof with respect to the rights
of holders of one or more outstanding series of Preferred
Stock, special meetings of the stockholders of the Corporation
may be called at any time only by the Chairman of the Board of
Directors, if there is one, by the President, if there is one,
or by the Board of Directors pursuant to a resolution approved
by the affirmative vote of at least a majority of the members
of the Board of Directors, and no such special meeting may be
called by any other person or persons."
26
EXHIBIT D
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORARTION
OF BLACK WARRIOR WIRELINE CORP.
"THIRTEENTH: Unless otherwise provided by the DGCL, by this
Certificate of Incorporation or by any provisions established
pursuant to Article FOURTH hereof with respect to the rights
of holders of one or more outstanding series of Preferred
Stock, no action required to be taken or that may be taken at
any annual or special meeting of the stockholders of the
Corporation may be taken without a meeting, and the power of
the stockholders of the Corporation to consent in writing to
the taking of any action by written consent without a meeting
is specifically denied, unless such action without a meeting
is taken by unanimous written consent."
27