EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
TEXOIL, INC.
ARTICLE I
The name of the Corporation is Texoil, Inc (the "Corporation").
ARTICLE II
The name and street address of the resident agent of the Corporation in
the State of Nevada is Corporation Trust Co. of Nevada, 6100 Neil Road, Suite
500, Reno, Nevada 89520. Branch offices may hereafter be established at such
other place or places, either within or without the State of Nevada as may be
determined from time to time by the Board of Directors.
ARTICLE III
The Corporation may engage in any lawful activity.
ARTICLE IV
The total number of shares that the Corporation shall have authority to
issue is 45,000,000 shares, of which 25,000,000 shall be common shares ("Common
Stock") with a par value of $.01 per share, 10,000,000 shall be Class B Common
Stock ("Class B Common Stock") with a par value of $.01 per share and 10,000,000
shall be preferred shares ("Preferred Stock") with a par value of $.01 per
share.
The designation, relative rights, preferences and liabilities of each
class of stock, itemized by class, shall be as follows:
(a) PREFERRED STOCK. Shares of Preferred Stock may be issued from
time to time in one or more series, the shares of each series to have such
designations, powers, preferences, rights, limitations and restrictions as
are stated in the resolution or resolutions providing for the issuance of
such series adopted by the Board of Directors of the Corporation (the
"Board of Directors" or the "Board"). Authority is hereby expressly
granted to the Board of Directors to authorize the issuance of the
Preferred Stock from time to time in one or more series. The authority of
the Board with respect to each series of Preferred Stock shall include,
but not be limited to, determination of the following:
(i) The number of shares constituting that series and
the distinctive designation of that series;
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(ii) The dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so, from which
date or dates;
(iii) Whether that series shall have voting rights in
addition to any voting rights provided by law, and, if so, the
terms of such voting rights;
(iv) Whether that series shall have conversion
privileges and, if so, the terms and conditions of such
conversion, including provision for adjustment of the
conversion rate in such events as the Board of Directors shall
determine;
(v) Whether or not shares of that series shall be
redeemable and whether or not the Corporation or the holder
(or both) may exercise the redemption right, including the
date or dates upon which they shall be redeemable, and the
amount per share payable in case of redemption, which amount
may vary under different conditions; and
(vi) The rights of the shares of that series in the
event of voluntary or involuntary liquidation, dissolution or
winding up of the Corporation and any other relative rights,
preferences and limitations of that class or series as may be
permitted or required by law.
(b) COMMON STOCK. Except as provided in subsections (i) through
(iii) of this subsection (b) below, the Common Stock and the Class B
Common Stock shall be identical in every respect, including, but not
limited to, voting rights, dividends, distributions, designations,
preferences, qualifications, limitations, restrictions and special or
relative rights (if any).
(i) Issuance of Class B Common Stock. Class B Common
Stock may only be issued upon the automatic conversion of the
Series A Convertible Preferred Stock of the Corporation (the
"Series A Preferred") pursuant to Section 4(b) of the
Certificate of Designation Establishing Series A Convertible
Preferred Stock of Texoil, Inc. (the "Certificate") filed with
the Secretary of State of Nevada contemporaneously with the
filing of these Amended and Restated Articles of
Incorporation, as such Certificate may hereafter be amended in
accordance with its terms.
(ii) VOTING RIGHTS
(1) The voting rights of the Common Stock and the
Class B Common Stock are identical except that the
holders of the Common Stock are entitled to elect the
Class A Directors of the Corporation, and the holders of
the Class B Common Stock, if any is outstanding, are
entitled to elect the Class B Directors of the
Corporation, except as provided in Article V(b).
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(2) The Common Stock and the Class B Common Stock
vote together as a single class on all matters on which
shareholders are entitled to vote, except for the
election of directors as provided herein and in the
Certificate, and Class B Common Stock may never
otherwise vote separately as a class.
(3) Each share of Common Stock and Class B Common
Stock shall be entitled to one vote on all matters
submitted to a vote of shareholders.
(iii) CONVERSION OF CLASS B COMMON STOCK.
(1) RIGHT TO CONVERT. Each share of Class B Common
Stock shall initially be convertible, at the option of
the holder thereof, at any time on or after the date of
issuance thereof, into fully paid and nonassessable
shares of Common Stock at the rate of one share of
Common Stock for each share of Class B Common Stock
surrendered for conversion. The number of shares of
Common Stock into which each share of Class B Common
Stock is convertible, as such number may be adjusted
from time to time pursuant to Article IV(b)(iii)(3), is
referred to as the "Conversion Ratio."
(2) MECHANICS OF CONVERSION. Before any holder of
Class B Common Stock shall be entitled to convert shares
of Class B Common Stock into shares of Common Stock and
to receive certificates therefor, such holder shall
surrender the certificate or certificates therefor, duly
endorsed, at the principal office of the Corporation or
of any transfer agent for the Class B Common Stock, and
shall give written notice to the Corporation at such
office that such holder elects to convert the same. The
Corporation shall as soon as practicable after such
delivery issue and deliver at such office to such holder
a certificate or certificates for the number of shares
of Common Stock to which such holder shall be entitled.
Such conversion shall be deemed to have been made
immediately prior to the close of business on the date
of such surrender of the shares of Class B Common Stock
to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the
holder or holders of such shares of Common Stock on such
date.
(3) ADJUSTMENTS TO CONVERSION PRICE.
(A) SUBDIVISIONS, COMBINATIONS OR
CONSOLIDATION OF COMMON STOCK. In the event the
outstanding shares of
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Common Stock shall be subdivided, combined or
consolidated, by stock split, stock dividend,
combination or like event, into a greater or
lesser number of shares of Common Stock, the
Conversion Ratio in effect immediately prior to
such subdivision, combination or consolidation
shall, concurrently with the effectiveness of such
subdivision, combination or consolidation, be
proportionately adjusted.
(B) RECLASSIFICATIONS. In the case, at any
time after the date hereof, of any capital
reorganization or any reclassification of the
stock of the Corporation (other than as a result
of a stock dividend or subdivision, split-up or
combination of shares), or the consolidation or
merger of the Corporation with or into another
person (other than a consolidation or merger in
which the Corporation is the continuing entity and
which does not result in any change in the Common
Stock) the shares of Class B Common Stock shall,
after such reorganization, reclassification,
consolidation or merger, be convertible into the
kind and number of shares of stock or other
securities or property of the surviving
corporation or otherwise to which a holder of
Class B Common Stock would have been entitled if
immediately prior to such reorganization,
reclassification, consolidation or merger such
holder had converted his shares of Class B Common
Stock into Common Stock. In any such case,
appropriate adjustment shall be made in the
application of the provisions of this Article
IV(b)(iii) after such reorganization,
reclassification, consolidation or merger so that
the provisions of this Article IV(b)(iii)
(including adjustments to the Conversion Ratio)
shall be applicable after such event and shall be
as nearly equivalent as practicable. The
provisions of this Article IV(b)(iii)(3)(B) shall
similarly apply to successive reorganizations,
reclassifications, consolidations or mergers.
(4) CERTIFICATE AS TO ADJUSTMENTS. Upon the
occurrence of each adjustment or readjustment of the
Conversion Ratio pursuant to Article IV(b)(iii)(3), the
Corporation at its expense shall promptly thereafter
compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of
Class B Common Stock a certificate setting forth such
adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request
at any time of any such holder, furnish or cause to be
furnished to such holder a like certificate setting
forth (A) such adjustments and readjustments, if any,
(B) the Conversion Ratio of
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the Class B Common Stock at the time in effect, and (C)
the number of shares of Common Stock and the amount, if
any, of other property which at the time would be
received upon the conversion of the Class B Common
Stock.
(5) STATUS OF CONVERTED STOCK. Any shares of Class
B Common Stock converted pursuant to this Article
IV(b)(iii) shall be retired and canceled, and shall no
longer be
available for issuance.
(6) MISCELLANEOUS. All calculations under this
Article IV(b)(iii) shall be made to the nearest one
hundredth (1/100) of a
share.
(7) NO IMPAIRMENT. The Corporation will not
through any reorganization, recapitalization, transfer
of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist
in the carrying out of all the provisions of this
Article IV(b)(iii) and in the taking of all action as
may be necessary or appropriate in order to protect the
conversion rights of the holders of Class B Common Stock
against impairment.
(8) RESERVATION OF STOCK ISSUABLE UPON CONVERSION.
The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the
conversion of the shares of Class B Common Stock, such
number of its shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all
outstanding shares of Class B Common Stock. If at any
time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of Class B
Common Stock, the Corporation will take such corporate
action as may be necessary to increase its authorized
but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
(iv) DIVIDENDS. To the extent permitted by law and
subject to the rights of any series of Preferred Stock, the
holders of the Common Stock and Class B Common Stock shall be
entitled to share pro rata according to the number of shares
held in such dividends as may be declared by the Board of
Directors from time to time.
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(v) LIQUIDATION. In the event of the liquidation,
dissolution or winding up, whether voluntary or involuntary of
the Corporation, the remaining assets and funds of the
Corporation, after payment to creditors and to those holders
of securities with preference over the Common Stock and the
Class B Common Stock, shall be divided among the holders of
Common Stock and Class B Common Stock pro rata according to
the number of shares held.
(c) INCORPORATION BY REFERENCE. For all purposes of these Amended
and Restated Articles of Incorporation, the Certificate of Designation
establishing the Series A Convertible Preferred Stock of Texoil, Inc.,
attached hereto as EXHIBIT A, including all attachments thereto, is hereby
incorporated by reference.
(d) APPLICATION OF NEVADA STATUTES. The provisions of Nevada Revised
Statutes 78.378 through 78.3793 do not apply to the acquisition of the
Series A Preferred pursuant to the Purchase Agreement (as defined in the
Certificate) or to the acquisition of Conversion Shares (as defined in the
Certificate) by the holders of Series A Preferred.
ARTICLE V
Members of the governing board shall be known as "Directors." The maximum
number of members of the Board of Directors shall be nine (9), with the exact
number of Directors to be determined from time to time as provided in this
Article V. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. The Board shall take action by
the affirmative vote of a majority of the directors present at a meeting, except
as otherwise provided by law or these Articles (as they may be modified by a
certificate of designation with respect to the issuance by the Board of a series
of preferred stock), provided that a quorum is present. The Board of Directors
may adopt such rules and regulations for the conduct of its meetings and the
management of the Corporation as it deems appropriate, consistent with law,
these Articles or the Bylaws of the Corporation, as amended.
Directors need not be shareholders of the Corporation. The Board of
Directors shall be classified, into two (2) classes (Class A and Class B) as
provided under Paragraphs (a) and (b) below, with the members of each class to
hold office until their successors are elected and qualified.
(a) CLASS A DIRECTORS. Not less than one (1) or more than six (6) of
the directors shall be designated Class A directors. Within that range,
the exact number of Class A Directors shall be determined from time to
time by a majority of the Class A Directors then in office, though less
than a quorum, or by the holders of Common Stock at the annual meeting of
shareholders; provided that no Class A Director's term shall be shortened
by a reduction in the number of Class A Directors. Class A directorships
will initially be held by the six members of the Board of Directors who
hold office on the date these Articles are filed with the Secretary of the
State of Nevada, and such members will continue to serve pursuant to the
terms hereof. Class A directors shall hold office for three (3) years and
be divided into three (3) equal groups, Group One to initially hold office
one year and to be elected in the
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first annual meeting after the date these Articles become effective, and
every three years thereafter, Group Two to hold office for two (2) years
and to be elected in the second annual meeting after the date these
Articles become effective, and and every three years thereafter and Group
Three to hold office for three (3) years and to be elected in the third
annual meeting after the date these Articles become effective, and every
three years thereafter.
Until a Trigger Event (as defined in the Certificate) occurs or six
(6) years elapse from the date these Articles are filed with the Secretary
of State of Nevada, whichever occurs first, the Class A Directors shall
have a total of six (6) votes, to be divided equally among the Class A
Directors then holding office. After a Trigger Event has occurred or six
years have elapsed, the Class A Directors shall, without further action by
the Corporation or its Board of Directors, have a total of three (3)
votes, to be divided equally among the Class A Directors then holding
office. In each of the next annual meetings of the shareholders after the
Trigger Event, only one (1) Class A Director of each Group shall be
elected with the result that the actual number of Class A Directors shall
be reduced by Group to a total of three (3), without requiring the
involuntary resignation or removal of any Class A Director.
(b) CLASS B DIRECTORS. Not less than one (1) or more than three (3)
of the Directors shall be designated Class B Directors of the Corporation
who shall be elected by the holders of Series A Preferred of the
Corporation as long as there are any shares of Series A Preferred
outstanding, and by the holders of the Class B Common Stock of the
Corporation if there are no outstanding shares of Series A Preferred.
Within that range, the exact number of Class B Directors shall be
determined from time to time by a majority of the Class B Directors then
in office, though less than an quorum, or by the holders of a majority of
the outstanding shares of Series A Preferred or Class B Common Stock;
provided that no Class B Director's term shall be shortened by a reduction
in the number of Class B Directors. Class B directorships will initially
be filled by nominees elected by the holders of the Series A Preferred,
and the initial Class B Directors will serve until the next annual meeting
following their election. Thereafter, subject to the provisions of the
Certificate, Class B directors shall be elected every year at the annual
meeting of shareholders by the holders of Series A Preferred Stock or
holders of Class B Common Stock as provided above. Nominees for Class B
directorships shall be made by the holders of the Series A Preferred Stock
or Class B Common Stock, as applicable, and shall be designated and
elected as Class B Directors. At such time, after the Original Issue Date
(as defined in the Certificate), as less than the Threshold Amount of
Series A Preferred and less than the Threshold Amount of Class B Common
Stock are outstanding, the right to elect Class B Directors shall cease
and the Board shall consist solely of Class A Directors. With respect to
the Series A Preferred, "Threshold Amount" has the meaning specified in
the Certificate. With respect to the Class B Common Stock, "Threshold
Amount" means ten percent (10%) of the number of shares of Class B Common
Stock outstanding immediately after the automatic conversion of the Series
A Preferred pursuant to Section 4(b) of the Certificate.
Until a Trigger Event occurs or six (6) years elapse from the date
these Articles are filed with the Secretary of State of Nevada, whichever
occurs first, the Class B Directors shall have a total of three (3) votes,
to be divided equally among the Class B Directors then
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holding office. After a Trigger Event has occurred or six (6) years have
elapsed, the Class B Directors shall, without further action by the
Corporation or its Board of Directors, have a total of six (6) votes, to
be divided equally among the Class B Directors then holding office. As the
actual numbers of Class A Directors are reduced pursuant to Article V(a),
the holders of Series A Preferred Stock or Class B Common Stock, as
applicable, may correspondingly increase the actual number of Class B
Directors up to a total number of six (6).
(c) VACANCIES. Any vacancies on the Board of Directors resulting
from the death, resignation, disqualification or removal of any Class A
Director, and any vacancies resulting from an increase in the number of
Class A Directors, may be filled by the Class A Directors, whether or not
there is a quorum of Directors. Class A Directors may only be removed for
cause by the affirmative vote of the holders of not less than two-thirds
of the voting power of the Common Stock. Any vacancies on the Board of
Directors resulting from the death, resignation, disqualification or
removal of any Class B Director, and any vacancies resulting from an
increase in the number of Class B Directors, may be filled by a majority
of the remaining Class B Directors, though less than a quorum, or by the
holders of a majority of the outstanding shares of Series A Preferred or
Class B Common Stock. Class B Directors may be removed from the Board at
any time, with or without cause, by the vote or consent of the holders of
not less than two-thirds of the voting power of the outstanding shares of
Series A Preferred or Class B Common Stock. The Board of Directors may not
create and fill new directorships or otherwise fill any vacancies, except
in accordance with the terms hereof.
ARTICLE VI
The Corporation shall become effective January 1, 1982, and shall have
perpetual existence.
ARTICLE VII
A resolution, in writing, signed by all of the members of the Board of
Directors of the Corporation, shall be and constitute action by the Board of
Directors to the effect therein expressed with the same force and effect as
though such resolution has been passed at a duly convened meeting, and it shall
be the duty of the Secretary to record every such resolution in the minute book
of the Corporation under its proper date.
ARTICLE VIII
Subject to any Bylaws adopted by the Shareholders of the Corporation, the
Directors shall have the power to make, alter or repeal from time to time the
Bylaws of the Corporation in any manner not inconsistent with the law, these
Articles or the Certificate. Bylaws so made by the Directors under the powers so
conferred may be altered, amended, or repealed by the Directors or the
shareholders in any manner not inconsistent with the law, these Articles or the
Certificate at any meeting called and held for that purpose.
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ARTICLE IX
No director or officer of the Corporation shall be liable to the
Corporation or its shareholders for damages for breach of fiduciary duty as a
director or officer, except for (a) acts of omission which involve intentional
misconduct, fraud or a knowing violation of law; or (b) the payment of dividends
in violation of Nevada Revised Statutes Section 78.300.
ARTICLE X
(a) INDEMNIFICATION. The Corporation shall indemnify any Director of
the Corporation who was or is a party (whether plaintiff, defendant or
third party) or witness, or is threatened to be made a party or witness to
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, except an action by or
in the right of the Corporation, by reason of the fact that the Director
is or was a director, officer, shareholder, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise (whether or not for profit), or by reason of anything
done or not done by the Director in any such capacity or capacities,
against expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by the Director in
connection with the action, suit or proceeding if the Director acted in
good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
or her conduct was illegal. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and that, with respect to an criminal action
or proceeding, he or she had reasonable cause to believe that his or her
conduct was unlawful.
The Corporation shall indemnify any Director of the Corporation who
was or is a party (whether plaintiff, defendant or third party) or
witness, or is threatened to be made a party or witness to any threatened,
pending or completed action or suit by or in the right of the Corporation
to procure a judgment in its favor by reason of the fact that the Director
is or was a director, officer, shareholder, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise (whether or not for profit), or by reason of anything
done or not done by the Director in any such capacity or capacities,
against expenses, including amounts paid in settlement and attorneys' fees
actually and reasonably incurred by the Director in connection with the
defense or settlement of the action or suit if he or she acted in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation. Indemnification may not
be made for any claim, issue or matter as to which such a person has been
adjudged by a court of competent jurisdiction after exhaustion of all
appeals therefrom, to be liable to the Corporation or for amounts paid in
settlement to the
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Corporation, unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction
determines, upon application, that in view of all of the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for
such expenses as the court deems proper.
The expenses of Directors incurred in defending a civil or criminal
action, suit or proceeding shall be paid by the Corporation as they are
incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the Director
to repay the amount if it is ultimately determined by a court of competent
jurisdiction that the Director is not entitled to be indemnified by the
Corporation. The provisions of this paragraph do not affect any rights to
advancement of expenses to which corporate personnel other than Directors
may be entitled under any contract or otherwise by law.
The indemnification and advancement of expenses authorized by this
Article:
(i) Does not exclude any other rights to which a
Director seeking indemnification or advancement of expenses
may be entitled under any other Article or any Bylaw,
agreement, vote of shareholders or disinterested directors,
insurance policy or otherwise, for either an action in his or
her official capacity or an action in another capacity while
holding his or her office, except that indemnification, unless
ordered by a court or for the advancement of expenses made
pursuant to this Article, may not be made to or on behalf of
any Director if a final adjudication establishes that his or
her acts or omissions involved intentional misconduct, fraud
or a knowing violations of the law and was material to the
cause of action.
(ii) Continues for a person who has ceased to be a
director or officer and inures to the benefit of the estate,
spouse, heirs, executors, administrators and personal
representatives of such a person.
Any change or amendment in these Articles that would adversely
affect the rights granted to the indemnified person shall be prospective
only and shall not be operative to adversely affect any rights of any
person entitled to indemnification hereunder.
(b) INSURANCE. The Corporation shall use its best efforts to
purchase and maintain insurance or make other financial arrangements on
behalf of any Director who is or was a director, officer, shareholder,
employee or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise (whether or not for profit), or by
reason of anything done or not done by the Director in any such capacity
or capacities, for any liability asserted against him and liability and
expenses incurred by him in his capacity as a director, officer,
shareholder, employee or agent, or arising out of his status as such,
whether or not the Corporation has the authority to indemnify him against
such liability and expenses.
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(c) OTHER FINANCIAL ARRANGEMENTS. The other financial arrangements
which may be made by the Corporation pursuant to part (b) above may
include, but are not limited to, the following:
(i) The creation of a trust fund;
(ii) The establishment of a program of
self-insurance;
(iii) The securing of its obligations of indemnification
by granting a security interest or other lien on any assets of
the Corporation; or
(iv) The establishment of a letter of credit, guaranty
or surety.
No financial arrangement made pursuant to this part (c) may provide
protection for a person adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable for intentional
misconduct, fraud or a knowing violation of law, except with respect to
the advancement of expenses or indemnification ordered by a court.
Any insurance or other financial arrangement made on behalf of a
person pursuant to this Article may be provided by the Corporation or any
other person approved by the Board of Directors, even if all of the other
person's stock or other securities is owned by the Corporation.
(d) GENERAL. In the absence of intentional misconduct, fraud or a
knowing violation of law:
(i) The decision of the Board of Directors as to the
propriety of the terms and conditions of any insurance or
other financial arrangement made pursuant to parts (b) and (c)
above and the choice of the person to provide the insurance or
other financial arrangement is conclusive; and
(ii) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to
personal liability for his or her action, even if a
director approving the insurance or other financial
arrangement is a beneficiary of the insurance or other
financial arrangement.
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ARTICLE XI
This Corporation elects not to be governed by Nevada Revised Statutes
78.411 to 78.444, inclusive concerning combinations with interested
stockholders.
EXECUTED by the undersigned, effective as of this 8th day of
November, 1999.
/s/ FRANK A. LODZINSKI
Frank A. Lodzinski, President
/s/ JERRY M. CREWS
Jerry M. Crews, Secretary
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