Camber Energy, Inc. 10-K


 


Exhibit 4.1


 


DESCRIPTION OF SECURITIES 


REGISTERED PURSUANT TO SECTION 12 OF 


THE SECURITIES EXCHANGE ACT OF 1934


 


The following summary
describes the common stock of Camber Energy, Inc., a Nevada corporation (“Camber”
or the “Company”), which common stock is registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Only the Company’s common stock is registered under Section 12
of the Exchange Act.


 


DESCRIPTION OF COMMON STOCK


 


The following description
of our common stock is a summary and is qualified in its entirety by reference to our Articles of Incorporation, as amended and
our Bylaws, as amended, which are incorporated by reference as exhibits to this Annual Report on Form 10-K, and by applicable law.
For purposes of this description, references to “Camber,” “we,” “our”
and “us” refer only to Camber and not to its subsidiaries.


 


Authorized Capitalization


 


The total number of
authorized shares of our common stock is 25,000,000 shares, $0.001 par value per share. The total number of “blank check”
authorized shares of our preferred stock is 10,000,000 shares, $0.001 par value per share. The total number of designated shares
of Series C Redeemable Convertible Preferred Stock is 5,000 (“Series C Preferred Stock”).


 


The terms of our preferred
stock are not included herein as such preferred stock is not registered under Section 12 of the Exchange Act.


 


Common Stock


 


Voting
Rights. Each share of our common stock is entitled to one vote on all stockholder matters. Shares of our common stock do
not possess any cumulative voting rights.


 


Except for the election
of directors, if a quorum is present, an action on a matter is approved if it receives the affirmative vote of the holders of at
least 33% of the voting power of the shares of capital stock present in person or represented by proxy at the meeting and entitled
to vote on the matter, unless otherwise required by applicable law, Nevada law, our Articles of Incorporation, as amended or Bylaws,
as amended. The election of directors will be determined by a plurality of the votes cast in respect of the shares present in person
or represented by proxy at the meeting and entitled to vote, meaning that the nominees with the greatest number of votes cast,
even if less than a majority, will be elected. The rights, preferences and privileges of holders of common stock are subject to,
and may be impacted by, the rights of the holders of shares of any series of preferred stock that we have designated, or may designate
and issue in the future.


 


Dividend Rights.
Each share of our common stock is entitled to equal dividends and distributions per share with respect to the common stock when,
as and if declared by our Board of Directors, subject to any preferential or other rights of any outstanding preferred stock.


 


Liquidation and
Dissolution Rights. Upon liquidation, dissolution or winding up, our common stock will be entitled to receive pro rata
on a share-for-share basis, the assets available for distribution to the stockholders after payment of liabilities and payment
of preferential and other amounts, if any, payable on any outstanding preferred stock.


 






     



     


    

 


Fully Paid Status. All
outstanding shares of the Company’s common stock are validly
issued, fully paid and non-assessable.


 


Listing. Our
common stock is listed and traded on the NYSE American under the symbol “CEI”.


 


Other Matters.
No holder of any shares of our common stock has a preemptive right to subscribe for any of our securities, nor are any shares of
our common stock subject to redemption or convertible into other securities.


 


Anti-Takeover Provisions Under The
Nevada Revised Statutes  


 


Sections 78.378-78.3793
of the Nevada Revised Statutes apply to any acquisition of a controlling interest in an issuing corporation unless the Articles
of Incorporation or Bylaws of the corporation in effect on the tenth day following the acquisition of a controlling interest by
an acquiring person provide that the provisions of those sections do not apply to the corporation, or to an acquisition of a controlling
interest specifically by types of existing or future stockholders, whether or not identified. A person desiring to acquire a controlling
interest in an issuing corporation must do so in accordance with the provisions of Sections 78.378-78.3793 of the Nevada
Revised Statutes.


 


In general, Sections
78.378-78.3793 set forth the procedures for an acquiring person to obtain a controlling interest in an issuing corporation.
The securities acquired in such acquisition are denied voting rights unless holders of a majority of the voting power of the corporation
approve the granting of such voting rights, and, if the acquisition would adversely alter or change any preference or any relative
or other right given to any other class or series of outstanding shares, the holders of a majority of each class or series affected
approve the granting of such voting rights.


 


The provisions of Sections
78.378-78.3793 of the Nevada Revised Statutes do not restrict the directors of an issuing corporation from taking action to
protect the interests of the corporation and its stockholders including, but not limited to, adopting or signing plans, arrangements
or instruments that deny rights, privileges, power or authority to a holder of a specified number of shares or percentage of share
ownership or voting power.


 


“Controlling
interest” means the ownership of outstanding voting shares of an issuing corporation sufficient, but for the provisions
of Section 78.378 to 78.3793, inclusive, to enable the acquiring person, directly or indirectly and individually or in association
with others, to exercise 1) 1/5 or more but less than 1/3, 2) 1/3 or more but less than a majority, or 3) a majority or more of
all the voting power of the corporation in the election of directors.


 


“Issuing corporation”
means a corporation which is organized in Nevada and which 1) has 200 or more stockholders of record, at least 100 of whom have
addresses in Nevada appearing on the stock ledger of the corporation; and 2) does business in Nevada directly or through an affiliated
corporation.


 


The Company’s
Bylaws, as amended and restated, provide that the Company is not governed by the provisions of Sections 78.378 to 78.3793,
inclusive, of the Nevada Revised Statues, and such sections do not therefore apply to the Company or to an acquisition of a controlling
interest by any stockholder of the Company.


 


Sections 78.411-78.444
of the Nevada Revised Statutes apply to certain combinations of the corporation with interested stockholders.


 


In general, Section
78.438 prohibits a Nevada corporation from engaging in any business combination with any interested stockholder for a period
of three years following the date that the stockholder became an interested stockholder unless the Board of Directors of the corporation
approved the business combination prior to the date the person became an interested stockholder.


 


In general, Section
78.439 provides that business combinations after the three-year period following the date that the stockholder becomes an interested
stockholder may also be prohibited unless approved by the corporation’s directors before the person became an interested
stockholder unless the price and terms of the transaction meet the criteria set forth in the statute.


 






     



     


    

 


“Combination”
means any of the following:


 


1) Any merger or consolidation
of the resident domestic corporation or any subsidiary of the resident domestic corporation with:


 


(a) the interested
stockholder; or


 


(b) any other corporation,
whether or not itself an interested stockholder of the resident domestic corporation, which is, or after the merger or consolidation
would be, an affiliate or associate of the interested stockholder.


 


2) Any sale, lease,
exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, to or with the interested
stockholder or any affiliate or associate of the interested stockholder of transactions, to or with the interested stockholder
or any affiliate or associate of the interested corporation:


 


(a) having an aggregate
market value equal to 5% or more of the aggregate market value of all the assets, determined on a consolidated basis, of the resident
domestic corporation;


 


(b) having an aggregate
market value equal to 5% or more of the aggregate market value of all the outstanding shares of the resident domestic corporation;
or


 


(c) representing 10%
or more of the earning power or net income, determined on a consolidated basis, of the resident domestic corporation.


 


3) The issuance or
transfer by the resident domestic corporation or any subsidiary of the resident domestic corporation, in one transaction or a series
of transactions, of any shares of the resident domestic corporation or any subsidiary of the resident domestic corporation that
have an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding shares of the resident
domestic corporation to the interested stockholder or any affiliate or associate of the interested stockholder except under the
exercise of warrants or rights to purchase shares offered, or a dividend or distribution paid or made, pro rata to all stockholders
of the resident domestic corporation.


 


4) The adoption of
any plan or proposal for the liquidation or dissolution of the resident domestic corporation proposed by, or under any agreement,
arrangement or understanding, whether or not in writing with, the interested stockholder or any affiliate or associate of the interested
stockholder.


 


5) Any:


 


(a) reclassification
of securities, including, without limitation, any splitting of shares, dividend distributed in shares, or other distribution of
shares with respect to other shares, or any issuance of new shares in exchange for a proportionately greater number of old shares;


 


(b) recapitalization
of the resident domestic corporation;


 


(c) merger or consolidation
of the resident domestic corporation with any subsidiary of the resident domestic corporation; or


 


(d) other transaction,
whether or not with or into or otherwise involving the interested stockholder, proposed by, or under any agreement, arrangement
or understanding, whether or not in writing, with, the interested stockholder or any affiliate or associate of the interested stockholder,
which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class or series
of voting shares or securities convertible into voting shares of the resident domestic corporation or any subsidiary of the resident
domestic corporation which is directly or indirectly owned by the interested stockholder or any affiliate or associate of the interested
stockholder, except as a result of immaterial changes because of adjustments of fractional shares.


 






     



     


    

 


6) Any receipt by the
interested stockholder or any affiliate or associate of the interested stockholder of the benefit, directly or indirectly, except
proportionately as a stockholder of the resident domestic corporation, of any loan, advance, guarantee, pledge or other financial
assistance or any tax credit or other tax advantage provided by or through the resident domestic corporation.


 


“Interested
stockholder” means any person, other than the resident domestic corporation or any subsidiary of the resident domestic
corporation, who is:


 


1) the beneficial owner,
directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the resident domestic corporation;
or


 


2) an affiliate or
associate of the resident domestic corporation and at any time within 3 years immediately before the date in question was the beneficial
owner, directly or indirectly, of 10% or more of the voting power of the then outstanding shares of the resident domestic corporation.


 


To determine whether
a person is an interested stockholder, the number of voting shares of the resident domestic corporation considered to be outstanding
includes shares considered to be beneficially owned by that person through the application of Section 78.414 of the Nevada
Revised Statutes, but does not include any other unissued shares of a class of voting shares of the resident domestic corporation
which may be issuable under any agreement, arrangement or understanding, or upon exercise of rights to convert warrants or options,
or otherwise.