BYLAWS
OF
EQUITY OIL COMPANY
ARTICLE I
SHAREHOLDERS
1.01 Annual Meeting. The corporation shall hold an annual meeting of
the shareholders on the second Wednesday of May of each year, at such time and
place as designated by the board of directors for the purpose of electing
directors and for the transaction of such other business as may properly come
before the meeting. If the annual meeting cannot be held on the day designated
as provided herein for any reason or at any adjournment thereof, the board of
directors shall cause such meeting to be held as soon thereafter as convenient.
1.02 Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, may be called by the president or the chairman of the
board, if there be one, or by the board of directors. The corporation shall also
hold a special meeting of the shareholders in the event it receives one or more
written demands for the meeting stating the purpose or purposes for which it is
to be held, signed and dated by the holders of shares representing at least ten
percent of all the votes entitled to be cast on any issue proposed to be
considered at the meeting. Special meetings shall be held at the principal
office of the corporation or at such other place as the board of directors,
president or chairman of the board, if there be one, may determine.
1.03 Notice of Meeting. Except as otherwise required by law, the
articles of incorporation or these bylaws, notice of each meeting of
shareholders stating the date, time and place of the meeting shall be given (and
shall be effective), in accordance with Section 6.03, to each shareholder of
record entitled to vote at such meeting not less than ten nor more than sixty
days before the date of the meeting, except that if the authorized capital stock
is to be increased, at least thirty days notice shall be given. Notice of each
meeting and, if required by law, of each annual meeting of shareholders shall
include a description of the purpose or purposes for which the meeting is
called. If a meeting is adjourned to another date, time or place, notice need
not be given of the new date, time or place if the new date, time or place is
announced at the meeting at which the adjournment is taken. If after the
adjournment a new record date is or must be fixed under Section 1.05 for the
adjourned meeting, notice of the adjourned meeting shall be given to each
shareholder of record entitled thereto as of the new record date.
1.04 Waiver of Notice. A shareholder may waive any notice required by
law, the articles of incorporation or these bylaws before, at or after the date
or time stated in the notice as the date or time when any action will occur or
has occurred. Any such waiver must be in writing, signed by the shareholder
entitled thereto and delivered to the corporation for inclusion in the minutes
or filing with the corporate records, but such delivery and filing shall not be
conditions to its effectiveness. By attending a meeting, a shareholder (a)
waives objection to lack of notice or defective notice of such meeting unless
the shareholder, at the beginning of the meeting, objects to the holding of the
meeting or the transacting of business at the meeting because of lack of notice
or defective notice, and (b) waives objection to consideration at such meeting
of a particular matter not within the purpose or purposes described in the
notice of such meeting unless, when the matter is presented for consideration,
the shareholder objects to its consideration.
1.05 Record Date. In order to make a determination of shareholders
entitled to notice of or to vote at any meeting of shareholders, entitled to
demand a special meeting of shareholders pursuant to Section 1.02, entitled to
take any other action, entitled to receive a distribution or payment of a share
dividend, or for any other purpose, the board of directors may fix a future date
as the record date for any such determination of shareholders, except that the
record date for determining shareholders entitled to take action without a
meeting pursuant to Section 1.12 shall be determined as provided in such
Section. A record date fixed under this Section shall be not more than seventy
and, in the case of a meeting of shareholders, not less than ten (thirty if the
authorized stock is to be increased) days before the meeting or action requiring
the determination of shareholders. Unless otherwise specified when the record
date is fixed, any such determination of shareholders shall be made as of the
corporation's close of business on the record date.
If a record date is not otherwise fixed under this Section, the record
date shall be (a) for the determination of shareholders entitled to notice of or
to vote at a meeting, the day before the first notice of the meeting is given to
shareholders, (b) for the determination of shareholders entitled to demand a
special meeting pursuant to Section 1.02, the date of the earliest of any of the
demands pursuant to which the meeting is called or the date that is sixty days
before the date the first of such demands is received by the corporation,
whichever is later, (c) for the determination of shareholders entitled to a
distribution, payment of a share dividend or for any other purpose determined by
the board of directors, the date the board of directors authorized the
distribution, payment or action; and (d) for the determination of shareholders
for any other purpose, the date the action requiring such determination is first
taken.
A determination of shareholders entitled to be given notice of or to
vote at any meeting of shareholders made as provided in this Section is
effective for any adjournment thereof unless the board of directors fixes a new
record date, which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.
1.06 Shareholders' List for Meeting. Prior to each meeting of
shareholders, the corporation shall prepare a list of the names of the
shareholders who are entitled to be given notice of the meeting. The list shall
be arranged by voting groups, if there be voting groups, and within each voting
group by class or series of shares, shall be alphabetical within each class or
series and shall show the address of, and the number of shares of each class and
series that are held by, each shareholder. This list shall be kept on file at
the corporation's principal office or at a place identified in the notice of the
meeting in the city where the meeting will be held beginning the earlier of ten
days before the meeting for which the list was prepared or two business days
after notice of the meeting is given and continuing through the meeting, and any
adjournment thereof. Subject to any restrictions and conditions imposed or
allowed by law, any shareholder or such shareholder's agent or attorney, on
written demand, may inspect or copy the shareholders' list for any purpose
reasonably related to the shareholder's interest as a shareholder during regular
business hours and during the period it is available for inspection. The
corporation shall make the shareholders' list available at the meeting and,
notwithstanding the foregoing, any shareholder or agent or attorney of a
shareholder may inspect the list at any time during the meeting or any
adjournment.
1.07 Voting Entitlement of Shares. Except as otherwise provided by law
or the articles of incorporation and subject to the provisions of Sections 1.05
and 1.09, each outstanding share, regardless of class, is entitled to one vote
on each matter submitted to a vote of shareholders.
1.08 Quorum. Except as otherwise provided by law or the articles of
corporation, at all meetings of shareholders, a majority of the votes entitled
to be cast on a matter shall constitute a quorum for action on such matter. Once
a share is represented for any purpose at a meeting, including the purpose of
determining that a quorum exists, it is deemed present for quorum purposes for
the remainder of the meeting and for any adjournment of that meeting, unless
otherwise provided in the articles of incorporation or unless a new record date
is or must be fixed for that adjourned meeting as provided in Section 1.05. If a
quorum does not exist the presiding officer or any shareholder or proxy that is
present at the meeting may adjourn the meeting to a different date, time or
place, and (subject to the next sentence) notice need not be given of the new
date, time or place if the new date, time or place is announced at the meeting
before adjournment. If a new record date for the adjourned meeting is or must be
fixed pursuant to Section 1.05, notice of the adjourned meeting shall be given
pursuant to Section 1.03 to persons that are shareholders as of the new record
date. At any adjourned meeting at which a quorum exists, any matter may be acted
upon that could have been acted upon at the meeting originally called; provided,
however, if new notice is given of the adjourned meeting, then such notice shall
state the purpose or purposes of the adjourned meeting sufficiently to permit
action on such matter.
1.09 Manner of Acting. If a quorum is present at a meeting of
shareholders as required by Section 1.08, action on a matter is approved if the
votes favoring the action exceed the votes opposing the action, unless a greater
number of affirmative votes, is required by law or the articles of
incorporation. Notwithstanding the foregoing and unless the articles of
incorporation provide otherwise, in the election of directors each shareholder
entitled to vote at such election shall have the right to vote the number of
shares owned by such shareholder for as many persons as there are directors to
be elected, and for whose election the shareholder has the right to vote. Those
candidates receiving the highest number of votes cast in their favor (equal to
the number of directors to be elected) are elected to the board of directors.
Cumulative voting is not allowed.
1.10 Proxies. Subject to applicable provisions of law, a shareholder
may vote by proxy appointed by a writing signed by the shareholder or by the
shareholder's duly authorized attorney-in-fact or otherwise appointed as allowed
by law. An appointment of a proxy is effective against the corporation when
received by the corporation in any manner permitted by law. An appointment is
effective for 11 months, unless otherwise provided in the appointment form.
1.11 Organization. The president shall act as chairman of all meetings
of shareholders. In the absence of the president, the chairman of the board, if
there be one, shall act as chairman. In the absence of the chairman of the
board, the vice president, if there be one, shall act as chairman of such
meeting. In the absence of the president, chairman of the board, and vice
president, any stockholder or the proxy of any stockholder may call the meeting
to order and a chairman shall be elected.
The secretary of the corporation shall act as secretary of all meetings
of the stockholders, but in his absence the chairman of the meeting may appoint
any person to act as secretary thereof.
ARTICLE II
BOARD OF DIRECTORS
2.01 General Powers. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, a board of directors, except as otherwise
provided by law, the articles of incorporation or these bylaws.
2.02 Number, Tenure and Qualifications. The number of directors of the
corporation shall be not less than six nor more than nine, as may be fixed from
time to time within such range by resolution of the board of directors.
Directors shall be elected at each annual meeting of shareholders and hold
office for staggered terms as provided in the Articles of Incorporation. Each
director shall hold office until the director's successor shall have been
elected and qualified, or until the director's earlier death, resignation or
removal. No decrease in the number of directors shall have the effect of
shortening the term of any incumbent director. Directors must be the holders of
record of at least one share of stock in the company and natural persons
eighteen years of age or older.
2.03 Removal and Resignation. Subject to the rights of the holders of
any series of preferred shares then outstanding, any director or the entire
board, director, may be removed from office at any time, but only by its
affirmative vote of the holders of at least 80% of the voting power of all of
the shares of the corporation entitled to vote for the election of directors.
Any director may resign at any time by giving written notice of resignation to
the chairman of the board, if there be one, any other director or (if the
director is not also that officer) to the president or the secretary. Such
resignation shall be effective when it is received by the chairman, other
director, the president or the secretary, as the case may be, unless the notice
of resignation specifies a later effective date. Unless otherwise specified in
the notice of resignation, acceptance of such resignation shall not be necessary
to make it effective.
2.04 Vacancies. Any vacancy occurring on the board of directors,
including a vacancy resulting from an increase in the number of directors, may
be filled by the directors as provided in the articles of incorporation or by
the shareholders at an annual meeting or at a special meeting of shareholders
called for that purpose. If the directors remaining in office constitute fewer
than a quorum, they may fill the vacancy by the affirmative vote of a majority
of all of those remaining.
2.05 Meetings. The board of directors may hold regular or special
meetings, in or out of Colorado. The board of directors may provide, by
resolution, the time and place for holding regular meetings without other notice
than such resolution. Special meetings may be called by or at the request of the
chairman of the board, if there be one, or by the president or by two or more
directors and shall be held at the principal office of the corporation unless
otherwise specified in the notice of the meeting.
2.06 Notice. Notice of each meeting of the board of directors (except
those regular meetings for which notice is not required) stating the place, date
and time of the meeting shall be given (and shall be effective) in accordance
with Section 6.03, to all directors at least three days before the date of the
meeting. The method of notice need not be the same for each director. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
2.07 Waiver of Notice. A director may waive any notice of a meeting
required by these bylaws before, at or after the date or time of the meeting
stated in the notice. Except as provided in the next sentence, any such waiver
must be in writing, signed by the director entitled thereto and delivered to the
corporation for filing with the corporate records, but such delivery and filing
shall not be conditions to its effectiveness. A director's attendance at or
participation in a meeting waives any required notice to such director of the
meeting unless, at the beginning of the meeting or promptly upon the director's
later arrival, the director objects to holding the meeting or transacting
business at the meeting because of lack of notice or defective notice and does
not thereafter vote for or assent to action taken at the meeting.
2.08 Quorum and Manner of Acting. Except as otherwise may be required
by law, the articles of incorporation or these bylaws, a majority of the
directors fixed in accordance with Section 2.02, present in person, shall
constitute a quorum for the transaction of business at any meeting of the board
of directors. Except as otherwise required by law, the act of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors. No director may vote or act by proxy or power of
attorney at any meeting of directors.
2.09 Presumption of Assent. A director who is present at a meeting of
the board of directors at which action on any corporate matter is taken is
deemed to have assented to all action taken at the meeting unless the director
(a) objects at the beginning of the meeting, or promptly upon the director's
arrival, to holding the meeting or transacting business at the meeting and does
not thereafter vote for or assent to any action taken at the meeting; (b)
contemporaneously requests that his or her dissent or abstention as to any
specific action taken be entered in the minutes of the meeting; or (c) causes
written notice of such dissent or abstention as to any specific action to be
received by the presiding officer of the meeting before adjournment of the
meeting or by the corporation promptly after adjournment of the meeting. The
right of dissent or abstention pursuant to this Section as to specific action is
not available to a director who votes in favor of the action taken.
2.10 Meetings by Telecommunication. One or more directors may
participate in any meeting of the board by, or the meeting may be conducted
through the use of, any means of communication by which all directors
participating can hear each other during the meeting. Such participation shall
constitute presence in person at the meeting.
2.11 Director Action without a Meeting. Any action required or
permitted to be taken at a meeting of the board of directors may be taken
without a meeting if all members of the board consent to such action in writing.
The action shall be deemed to have been so taken by the board at the time the
last director signs a writing describing the action taken, unless, before such
time, any director has revoked his or her consent by a writing signed by the
director and received by the president or secretary or any other person
authorized by the board of directors to receive such a revocation. Such action
shall be effective at the time and date it is taken unless the directors
establish a different effective time or date. Such action has the same effect as
action taken at a meeting of directors and may be described as such in any
document.
2.12 Committees. The Company shall have an executive committee, audit
committee, compensation committee, and nominating committee as provided in these
bylaws. Subject to applicable provisions of law, the board of directors, by
resolution adopted by a majority of all directors then in office, may create
other committees and appoint one or members of the board of directors to serve
on them. The provisions of these bylaws governing meetings, action without
meetings, notice, waiver of notice and quorum and voting requirements of the
board of directors shall apply to any committees so created or established under
these bylaws and to the members appointed thereto. Each committee created by the
board or established under these bylaws shall have and may exercise the
authority of the board of directors to the extent specified in the resolution
creating such committee, except that no such committee shall have authority to:
(a) Declare dividends or distributions;
(b) Approve or recommend to shareholders actions or
proposals required by Colorado law to be approved
by shareholders;
(c) Fill vacancies on the board of directors or any of
its committees;
(d) Adopt, amend or repeal by-laws;
(e) Approve a plan of merger not requiring shareholder
approval;
(f) Authorize or approve reacquisition of shares
except according to a formula or method prescribed
by the board of directors; and
(g) Authorize or approve the issuance or sale of shares or a
contract for the sale of shares or determine the designation and
relative rights preferences and class or series of shares; except that
the board of directors may authorize a committee or an officer to do so
within the limits specifically prescribed by the board of directors.
(h) Any other action prohibited under the Colorado
Corporation Act as the same may be amended from time to time.
2.13 Executive Committee.
The executive committee shall consist of the president, chairman of the
board, if there be one, and such other directors as the board may determine. The
president shall act as chairman of the committee. The executive committee shall
have and may exercise all authority of the board of directors subject to such
limitations, if any, as may be prescribed by resolution of the board and by-laws
of the corporation, and except as provided by law.
2.14 Audit Committee.
The board of directors shall, by resolution or resolutions, designate
three or more of its independent outside directors to serve on the audit
committee of the board. The board shall designate one person from the members so
selected to act as chairman of the committee. The audit committee shall
implement and support the oversight function of the board by reviewing on a
periodic basis the corporation's processes for producing financial data, its
internal controls, and the independence of the corporation's external auditor.
In addition, it shall:
(a) Recommend the firm to be employed as the
corporation's external auditor and review the
proposed discharge of any such firm;
(b) Review the external auditor's compensation and the
proposed terms of its engagement;
(c) Review the appointment and replacement of the chief
financial officer of the company;
(d) Serve as a channel of communication between the
external auditor and the board and between the
chief financial officer of the company, and
the board;
(e) Review the results of each external audit of the
corporation and any recommendations made by the
external auditor and the responses of management
to such recommendations; and
(f) Such other matters as the audit committee, in its
sole discretion, deems advisable and necessary.
2.15 Compensation Committee.
The compensation committee shall be comprised of all of the independent
outside directors of the company. Each year following the annual meeting of
shareholders, the board of directors shall appoint a chairman of the
compensation committee. The compensation committee shall:
(a) Review and recommend to the board, or determine,
the annual salary, bonus, stock options, and other benefits, direct
and indirect, of the officers of the company;
(b) Review new executive compensation programs; review on a
periodic basis the operation of the corporation's executive
compensation programs to determine whether they are properly
coordinated; establish and periodically review policies for the
administration of executive compensation programs; and take steps to
modify any executive compensation programs that yield payments and
benefits that are not reasonably related to executive performance;
(c) Establish and periodically review policies in the
area of management perquisites;
(d) Be responsible for insuring that a proper
system of compensation is in place to provide performance oriented
incentives to management; and
(e) Evaluate the president and chief financial
officer's performance for incentive purposes.
2.16 Nominating Committee. The whole board of directors shall
act as a nominating committee for the election of new directors of
the company. The nominating committee shall:
(a) By February 1 of each year, nominate candidates
for all directorships to be filled by the shareholders or the board;
(b) Consider, in making its selection, candidates for
directorships proposed by the chief executive officer, the chairman of
the board, if any, and within the bounds of practicability, by any
other senior executive or any director or shareholder;
(c) In selecting a candidate, consideration should be given
to the skills and characteristics required of board members in the
context of the current makeup of the board and the business of the
company. The assessment should include, but not be limited to, issues
of diversity, age and skills such as an understanding of exploration,
production, marketing, finance, regulation, public and international
markets;
(d) Each proposed nominee shall provide the corporation with
such information concerning himself as is required under law, to be
included in the corporation's proxy statement soliciting proxies for
his election as director; and
(e) Substitution of Nominees. In the event that a person is
validly designated as a nominee in accordance with paragraph (b) hereof
and shall thereafter become unable or unwilling to stand for the
election to the board of directors may designate a substitute nominee.
2.17 Compensation. The members of the board of directors shall be
entitled to reasonable compensation for their personal services as such, and
shall be paid such compensation as the directors may from time to time
determine. However, no director who is also a salaried, full time officer of the
corporation shall receive compensation for his services as a director.
2.18 Extra Services.
If any director performs extra services for the corporation at the
request of the board of directors, the corporation may remunerate the director
for so doing in such manner as may be determined by the board including the
payment of expenses incurred in connection with such extra services.
ARTICLE III
OFFICERS
3.01 General. The corporation shall have as officers a president, a
secretary, and a treasurer, who shall be appointed by the board of directors.
The board of directors may designate and appoint a chairman and other officers
of the board. The board of directors may also designate, as additional offices,
those of vice presidents, assistant secretaries, assistant treasurers, and such
other offices as it may deem necessary or appropriate; and the board of
directors, the president, and such other officers as the board of directors may
authorize, acting singly, may make appointments to such offices. The officers of
the corporation shall exercise such authority and perform such duties as shall
be determined by these by-laws or the board of directors. Any two or more
offices may be held by the same person. The officers of the corporation shall be
natural persons at least eighteen years old.
3.02 Term of Office. The officers of the corporation shall be appointed
by the board of directors at each annual meeting of the board of directors held
after each annual meeting of the shareholders. If the appointment of officers is
not made at such meeting, or if an officer or officers are to be appointed by
another officer or officers of the corporation, such appointments shall be made
as soon thereafter as convenient . Except as otherwise provided in Section 3.03,
each officer shall hold office for the term specified in the officer's
appointment and, if applicable, until the officer's successor shall have been
appointed and qualified, or until the officer's earlier death, resignation or
removal.
3.03 Removal and Resignation. Any officer appointed by the board of
directors may be removed at any time by the board of directors. Any officer
appointed by the president or other person may be removed at any time by the
board of directors or by the appointing person. Any officer may resign at any
time by giving written notice of resignation to any director (or to any director
other than the resigning officer if the officer is also a director), to the
president, to the secretary, or to the officer who appointed. Acceptance of such
resignation shall not be necessary to make it effective, unless the notice so
provides.
3.04 Compensation. Officers shall receive such compensation for their
services as may be fixed by the board of directors or by any officer authorized
by the board of directors to fix compensation of other officers. No officer
shall be prevented from receiving compensation by reason of the fact that he or
she is also a director of the corporation. Appointment as an officer shall not
of itself create a contract or other right to compensation for services
performed by such officer.
3.05 Chairman of the Board. The board of directors may elect from its
number a chairman of the board. The chairman of the board, if there be one,
shall be an independent outside director and shall preside at all meetings of
the board of directors. The chairman shall act in a non-executive capacity;
shall have access to all corporate information; monitor officers' performance;
aid and consult with the president; assist the president in setting board
meeting agendas; facilitate communications among other members of the board as
the president and chairman mutually agree. He shall have such other powers and
duties as may be prescribed by these by-laws and by the board of directors from
time to time.
3.06 President. Subject to the direction and control of the board of
directors, the president shall be the chief executive officer of the corporation
and as such shall have general and active control of its affairs and business
and general supervision of its officers, agents and employees and shall see that
all orders and resolutions of the board of directors are carried into effect.
The president may negotiate, execute, and deliver such contracts, deeds, and
other instruments on behalf of the corporation as are necessary and appropriate
to the conduct of the business and affairs of the corporation or as are approved
by the board of directors. The president shall preside at all meetings of
shareholders, and the executive committee. The president shall also preside at
all meetings of the board of directors unless the board of directors has
appointed a chairman of the board. The president shall have such additional
authority and duties as are appropriate and customary for the office of
president and chief executive officer, except as the same may be expanded or
limited by the board of directors from time to time.
3.07 Vice Presidents. The vice president, if any (or if there is more
than one, then each vice president), shall assist the president and shall
perform such duties as may be assigned by the president or the board of
directors. The vice president, if there is one (or if there is more than one,
then the vice president designated by the board of directors, or if there is no
such designation, then the vice presidents in the order of their appointment)
shall, at the request of the president, or in the president's absence or
inability or refusal to act, have the powers and perform the duties of the
president.
3.08 Secretary. The secretary shall, except to the extent delegated by
the board of directors to another officer or officers: (a) be responsible for
the preparation and maintenance of the minutes of the proceedings of the
shareholders, the board of directors and any committees of the board and of the
other records and information required to be kept by the corporation under
Section 7-116-101 of the Colorado Business Corporation Act, or any successor
provision, and for authenticating records of the corporation ; (b) see that all
notices to the shareholders and directors are duly given in accordance with the
provisions of these bylaws or as required by law; (c) have charge of the
corporate seal and authority to affix the corporate seal to any instrument
requiring it and attest to such affixment; (d) be responsible for the
maintenance of other corporate records and files and for the preparation and
filing of reports to governmental agencies (other than tax returns), except to
the extent any of such duties is delegated to another officer or agent of the
corporation; and (e) perform all other duties incident or customary to the
office of secretary and such other duties as from time to time may be assigned
by the president or the board of directors. Assistant secretaries, if any, shall
have the same duties and powers, subject to supervision by the secretary.
3.09 Treasurer. The treasurer shall: (a) be the principal financial
officer of the corporation and have the care and custody of all funds,
securities, evidences of indebtedness and other personal property of the
corporation and deposit the same in accordance with the instructions of the
board of directors; (b) subject to any limits imposed by the board of directors,
receive and give receipts and acquittances for moneys paid in on account of the
corporation, and pay out of the funds on hand all bills, payrolls, and other
just debts of the corporation of whatever nature upon maturity; (c) be the
principal accounting officer of the corporation; (d) prescribe and maintain the
methods and systems of accounting to be followed; (e) keep complete books and
records of account; (f) prepare and file all local, state and federal tax
returns; (g) prepare and furnish to the president and the board of directors
statements of account showing the financial position of the corporation and the
results of its operations; and (h) perform all other duties incident or
customary to the office of treasurer and such other duties as may be from time
to time prescribed by the president or the board of directors. Assistant
treasurers, if any, shall have the same powers and duties, subject to
supervision by the treasurer.
ARTICLE IV
SHARES
4.01 Issuance of Shares. The issuance or sale by the corporation of any
shares of its authorized capital stock of any class shall be made only upon
authorization of the board of directors. No shares shall be issued until full
consideration has been received therefor. Every issuance of shares shall be
recorded on books maintained for such purpose by or on behalf of the
corporation.
4.02 Certificates. Shares of stock issued by the corporation shall be
represented by certificates. Certificates shall be consecutively numbered, shall
be signed, either manually or by facsimile, in the name of the corporation by
the president or a vice president and by the secretary or an assistant secretary
or by such other officer or officers as may be designated by the board of
directors, and shall otherwise be in such form and contain such information,
consistent with law, as shall be prescribed by the board of directors.
Certificates may, but need not be, sealed with the seal of the corporation, or
with a facsimile thereof. In case any officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he or she were such officer at the date of its issue.
4.03 Consideration for Shares. Shares shall be issued for such
consideration, expressed in dollars, as shall be fixed from time to time by the
board of directors. Such consideration may consist, in whole or in part, of any
tangible or intangible property or benefit to the corporation, including cash,
promissory notes, services performed and other securities of the corporation.
Future services shall not constitute payment or partial payment for shares. The
promissory note of a subscriber or an affiliate of a subscriber shall not
constitute payment or partial payment for shares unless the note is negotiable,
with recourse against the maker and secured by collateral, other than the
shares, having a fair market value at least equal to the principal amount of the
note.
4.04 Lost Certificates. In case of the alleged loss, destruction or
mutilation of a certificate of stock, the board of directors may direct the
issuance of a new certificate in lieu thereof upon such terms and conditions in
conformity with law as it may prescribe. Before issuing a new certificate, the
board of directors may in its discretion require a bond in such form and amount
and with such surety as it may determine.
4.05 Transfer of Shares. Upon surrender to the corporation or to a
transfer agent of the corporation of a certificate of stock duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, payment of all transfer taxes, if any, and the satisfaction of any
other requirements of law, including without limitation evidence of compliance
with all applicable securities laws, the corporation shall issue a new
certificate to the person entitled thereto, and cancel the old certificate.
Every such transfer of stock shall be entered on the books of the corporation
maintained for such purpose by or on behalf of the corporation. The corporation
or the corporation's transfer agent may require a signature guaranty or other
reasonable evidence that any signature is genuine and effective before making
any transfer. Transfers of uncertificated shares shall be made in accordance
with applicable provisions of law.
4.06 Holders of Record. Except to the extent the corporation otherwise
provides pursuant to Section 4.07, and except for the assertion of dissenters'
rights to the extent permitted in the Colorado Business Corporation Act, the
corporation shall be entitled to treat the registered holder of any shares of
the corporation as the owner thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, the shares on the
part of any other person, whether or not the corporation shall have notice of
such claim or interest.
4.07 Recognition Procedure for Beneficial Owners. The board of
directors may establish, by resolution, a procedure by which the beneficial
owner of shares that are registered in the name of a nominee is recognized by
the corporation as the shareholder. The procedure established pursuant to this
Section may set forth the types of nominees to which it applies, the rights or
privileges that the corporation recognizes in a beneficial owner (which may
include rights or privileges other than voting), the manner in which the
procedure may be used by the nominee, the information that must be provided by
the nominee when the procedure is used, the period for which the nominee's use
of the procedure is effective, and any other aspects of the rights and duties
created thereby.
ARTICLE V
INDEMNIFICATION
5.01 Right to Indemnification. The corporation shall indemnify, to the
fullest extent permitted by law (including without limitation in circumstances
in which, in the absence of this Section 5.01, indemnification would be
discretionary under the laws of Colorado or limited or subject to particular
standards of conduct under such laws), each of its directors and officers
(hereinafter, for purposes of this Article V, individually referred to as a
"party") against all expenses, liabilities and losses (including without
limitation expenses of investigation and preparation, fees and disbursements of
counsel, accountants and other experts, judgments, fines and amounts paid in
settlement) incurred in, relating to or as a result of any action, suit or
proceeding (collectively referred to herein as a "proceeding") to which such
person may be involved or made a party by reason of serving or having served as
a director or officer of the corporation or, at the request of the corporation,
as a director, officer, manager, member, partner, trustee, employee, fiduciary,
functionary or agent of any other corporation, limited liability company,
partnership, joint venture, trust, association, employee benefit plan or other
entity or enterprise.
5.02 Advance of Expenses. In the event of any proceeding in which a
party is involved or which may give rise to a right of indemnification under
Section 5.01, following written request to the corporation by the party, the
corporation shall pay to the party, to the fullest extent permitted by law
(including without limitation in circumstances in which, in the absence of this
Section 5.02, advance of expenses would be discretionary under the laws of
Colorado or limited or subject to particular standards of conduct under such
laws), amounts to cover expenses incurred by the party in, relating to or as a
result of such proceeding in advance of its final disposition.
5.03 Settlements. The corporation shall not be liable under this
Article for any amounts paid in settlement of any proceeding effected without
its written consent. The corporation shall not settle any proceeding in any
manner that would impose any personal penalty or limitation on a party without
the party's written consent. Consent to a proposed settlement of any proceeding
shall not be unreasonably withheld by either the corporation or the party.
5.04 Burden of Proof. If under applicable law the entitlement of a
party to be indemnified or advanced expenses pursuant to this Article depends
upon whether a standard of conduct has been met, the burden of proof of
establishing that the party did not act in accordance with such standard shall
rest with the corporation. A party shall be presumed to have acted in accordance
with such standard and to be entitled to indemnification or advance of expenses
(as the case may be) unless, based upon a preponderance of the evidence, it
shall be determined that the party has not met such standard. Such determination
and any evaluation as to the reasonableness of amounts claimed by a party shall
be made by the board of directors or such other body or persons as may be
permitted by law.
5.05 Notification and Defense of Claim. Promptly after receipt by a
party of notice of the commencement of any proceeding, the party shall, if a
claim for indemnification in respect thereof may or will be made against the
corporation under this Article, notify the corporation in writing of the
commencement thereof; provided, however, that delay in so notifying the
corporation shall not constitute a waiver or release by the party of any rights
under this Article. With respect to any such proceeding: (a) the corporation
shall be entitled to participate therein at its own expense; (b) any counsel
representing the party to be indemnified in connection with the defense or
settlement thereof shall be counsel mutually agreeable to the party and to the
corporation; and (c) if the corporation admits that such party would be entitled
to indemnification under this Article in connection with such proceeding, the
corporation shall have the right, at its option, to assume and control the
defense or settlement thereof, with counsel satisfactory to the party. If the
corporation assumes the defense of the proceeding, the party shall have the
right to employ its own counsel, but the fees and expenses of such counsel
incurred after notice from the corporation of its assumption of the defense of
such proceeding shall be at the expense of the party unless (i) the employment
of such counsel has been specifically authorized by the corporation, (ii) the
party shall have reasonably concluded that there may be a conflict of interest
between the corporation and the party in the conduct of the defense of such
proceeding, or (iii) the corporation shall not in fact have employed counsel to
assume the defense of such proceeding. Notwithstanding the foregoing, if an
insurance carrier has supplied directors and officers liability insurance
covering a proceeding and is entitled to retain counsel for the defense of such
proceeding, then the insurance carrier shall retain counsel to conduct the
defense of such proceeding unless the party and the corporation concur in
writing that the insurance carrier's doing so is undesirable.
5.06 Payment Procedures; Enforcement. The corporation shall promptly
act upon a party's written request for indemnification or advance of expenses.
The right to indemnification and advance of expenses granted by this Article
shall be enforceable in any court of competent jurisdiction if the corporation
denies the claim, in whole or in part, or if no disposition of such claim is
made within sixty days after the written request for indemnification or advance
of expenses is made. If successful in whole or in part in such suit, the party's
expenses incurred in bringing and prosecuting such claim shall also be paid by
the corporation.
5.07 Other Payments. The corporation shall not be liable under this
Article to make any payment in connection with any proceeding against or
involving a party to the extent the party has otherwise actually received
payment (under any insurance policy, agreement or otherwise) of the amounts
otherwise indemnifiable hereunder. A party shall repay to the corporation the
amount of any payment the corporation makes to the party under this Article in
connection with any proceeding against or involving the party, to the extent the
party has otherwise actually received payment (under any insurance policy,
agreement or otherwise) of such amount. In the event of any payment under this
Article, the corporation shall be subrogated to the extent of such payment to
all of the rights of recovery of the indemnified party, who shall execute all
papers and do everything that may be necessary to assure such rights of
subrogation to the corporation.
5.08 Liability Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
fiduciary or agent of the corporation or who is or was serving at the request of
the corporation as a director, officer, manager, member, partner, trustee,
employee, fiduciary, functionary or agent of any other corporation, limited
liability company, partnership, joint venture, trust, association, employee
benefit plan or other entity or enterprise against any liability asserted
against and incurred by such person in any such capacity or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article.
5.09 Other Rights and Remedies. The rights to indemnification and
advance of expenses provided by this Article shall be in addition to, and shall
not be in limitation of, any other rights a party may have or hereafter acquire
under any law, provision of the articles of incorporation, any other or further
provision of these bylaws, vote of the shareholders or directors, agreement or
otherwise. The corporation shall have the right, but shall not be obligated, to
indemnify or advance expenses to any employee, fiduciary or agent of the
corporation not otherwise covered by this Article to the fullest extent
permitted by law. Unless otherwise provided in any separate indemnification
arrangement, any such indemnification or advance of expenses shall be made only
as authorized in the specific case by the board of directors.
5.10 Applicability; Effect. The rights to indemnification and advance
of expenses provided by this Article shall be applicable to acts or omissions
that occurred prior to the adoption of this Article, shall continue as to any
party entitled to indemnification under this Article during the period such
party serves in any one or more of the capacities covered by this Article, shall
continue thereafter so long as the party may be subject to any possible
proceeding by reason of the fact that the party served in any one or more of the
capacities covered by this Article, and shall inure to the benefit of the estate
and personal representatives of each such person. Any repeal or modification of
this Article or of any Section or provision hereof shall not adversely affect
any rights or obligations then existing. All rights to indemnification under
this Article shall be deemed to be provided by a contract between the
corporation and each party covered hereby.
5.11 Severability. If any provision of this Article shall be held to be
invalid, illegal or unenforceable for any reason whatsoever (a) the validity,
legality and enforceability of the remaining provisions of this Article shall
not in any way be affected or impaired thereby, and (b) to the fullest extent
possible, the remaining provisions of this Article shall be construed so as to
give effect to the intent of this Article that each party covered hereby is
entitled to the fullest protection permitted by law.
5.12 Expenses as a Witness. The Corporation may pay or reimburse
expenses incurred by a director, officer, employee, fiduciary, or agent in
connection with an appearance as a witness in a Proceeding at a time when he or
she has not been made a named defendant or respondent in the Proceeding.
5.13 Notice to Shareholders. If the corporation indemnifies or advances
Expenses to a director under this Article in connection with a Proceeding by or
in the right of the corporation, the corporation shall give written notice of
the indemnification for advance to the shareholders with or before the notice of
the next shareholder's meeting. If the next shareholder action is taken without
a meeting at the instigation of the board of directors, such notice shall be
given to the shareholders at or before the time the first shareholder signs a
writing consenting to such action.
ARTICLE VI
MISCELLANEOUS
6.01 Corporate Seal. The corporate seal of the corporation shall be
circular in form and shall contain the name of the corporation and the words
"Seal, Colorado." The seal may be used by causing it or a facsimile thereof to
be impressed, affixed, manually reproduced or rubber stamped with indelible ink.
6.02 Fiscal Year. The fiscal year of the corporation shall
be on a calendar year basis or as otherwise established by resolution of the
board of directors.
6.03 Manner of Giving Notice; Effectiveness. Whenever notice is
required by law, the articles of incorporation or these bylaws to be given to
any shareholder or director, such notice shall be in writing (unless oral notice
is reasonable under the circumstances) and may be given in person or by
telephone, telegraph, teletype, electronically transmitted facsimile or other
form or wire or wireless communication, first class, certified or registered
mail, private courier or in any other manner permitted by law. If written,
notice shall be effective as to each such shareholder or director, as the case
may be may, as follows: (a) in the case of notice mailed by the corporation to
the shareholders, upon deposit in the United States mail, addressed to the
shareholder at the address as it appears in the corporation's current record of
shareholders and with first class postage prepaid; and (b) in all other cases,
the earliest of (i) the date received, (ii) five days after deposit in the
United States mail (properly addressed and with first class postage prepaid),
and (iii) the date shown on the return receipt, if mailed by registered or
certified mail, return receipt requested, and the receipt is signed by or on
behalf of the addressee. Oral notice is effective when communicated. If three
successive notices (whether with respect to a meeting of shareholders or
otherwise) are given by the corporation to a shareholder and are returned as
undeliverable, no further notices to such shareholder shall be necessary until
another address for the shareholder is made known to the corporation.
6.04 Receipt of Notices by the Corporation. Except as otherwise
expressly provided herein, notices, shareholder writings consenting to action
and other documents and writings shall be deemed to be received by the
corporation when they are actually received: (a) at the registered office of the
corporation addressed to the registered agent; (b) at the principal office of
the corporation (as that office is designated in the most recent document filed
by the corporation with the Colorado Secretary of State providing such
information) addressed to the corporation or to the secretary; (c) by the
president or the secretary wherever that officer may be found; or (d) by any
other person authorized from time to time by the board of directors, the
president or the secretary to receive such writings, wherever such person is
found.
6.05 Amendments. The board of directors or shareholders may make, amend
and repeal the bylaws of the corporation at any time and from time to time as
provided by law.
6.06 Voting of Securities by the Corporation. Unless otherwise provided
by resolution of the board of directors, on behalf of the corporation, the
president or any vice president shall, unless otherwise directed by the board or
directors, attend in person or by substitute appointed by him or her, or shall
execute on behalf of the corporation written instruments appointing a proxy or
proxies to represent the corporation at, all meetings of the shareholders or
members of any other corporation or entity in which the corporation holds an
interest, and may, on behalf of the corporation, in person or by substitute or
by proxy, execute written waivers of notice and consents with respect to any
such meetings. At all such meetings or otherwise, the president or any vice
president, in person or by substitute or by proxy, may vote and execute written
consents and other instruments with respect to such interest and may exercise
any and all rights and powers incident to the ownership of such interest,
subject, however, to the instructions, if any, of the board of directors.
The undersigned, being the duly elected and acting secretary of Equity
Oil Company, hereby certifies that the foregoing bylaws were adopted as the
bylaws of the corporation by the board of directors on January 25, 1996.
/S/ CLAY NEWTON
CLAY NEWTON, Secretary