EXHIBIT 3.1
CERTIFICATE OF DESIGNATIONS
OF
POWERS, RIGHTS, PREFERENCES, PRIVILEGES,
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF SERIES A CONVERTIBLE PREFERRED STOCK
OF
ZYDECO ENERGY, INC.,
A Delaware corporation
Sam B. Myers certifies that:
A. He is the duly elected and acting President and Corporate
Secretary of Zydeco Energy, Inc., a Delaware corporation (the "Corporation").
B. The Certificate of Incorporation authorizes the directors to
adopt resolutions fixing the rights, preferences, restrictions and other matters
of wholly unissued series of Preferred Stock, and pursuant to this authority
given by the Corporation's Certificate of Incorporation, the Board of Directors
of the Corporation has duly adopted the following recitals and resolutions:
WHEREAS, the Certificate of Incorporation of the Corporation
provides for the Preferred Stock, consisting of 1,000,000
shares issuable from time to time in one or more series;
WHEREAS, the Board of Directors of the Corporation is
authorized to fix by resolution or resolutions the classes or
series of Preferred Stock to have such designations and
powers, rights, preferences, privileges, qualifications,
limitations and restrictions granted to or imposed upon the
Preferred Stock or any class or series thereof;
WHEREAS, the Corporation has no issued or outstanding shares
of Preferred Stock; and
WHEREAS, the Board of Directors desires, pursuant to its
authority as aforesaid, to designate 7,190 shares of the
Preferred Stock as "Series A Convertible Senior Preferred
Stock" and to fix the powers, rights, preferences, privileges,
qualifications, limitations and restrictions relating to such
series of Preferred Stock.
RESOLVED, that the Board of Directors hereby fixes the
designation and the number of shares constituting, and the
powers, rights, preferences, privileges, qualifications,
limitations and restrictions relating to, the Series A
Convertible Preferred Stock as follows:
1. Designation. This series of Preferred Stock shall be designated "Series A
Convertible Preferred Stock" (the "Series A Preferred Stock").
2. Number of Shares and Par Value. The number of shares constituting the Series
A Preferred Stock shall be equal to 7,190. Each share of the Series A Preferred
Stock shall have a par value of $.001.
3. Relative Seniority. The Series A Preferred Stock shall, in respect of the
right to participate in distributions or payments in the event of any
liquidation, dissolution or winding up of the Corporation, rank (a) pari passu
with the Common Stock (as defined below) of the Corporation and with any other
class or series of stock of the Corporation, the terms of which specifically
provide that such class or series shall rank pari passu with the Series A
Preferred Stock in respect of the right to participate in distributions or
payments in the event of any liquidation, dissolution or winding up of the
Corporation; and (b) junior to any other class or series of stock of the
Corporation, the terms of which specifically provide that such class or series
shall rank senior to the Series A Preferred Stock in respect of the right to
participate in distributions or payments in the event of any liquidation,
dissolution or winding up of the Corporation. The term "Common Stock" shall mean
all shares now or hereafter authorized of any class of common stock of the
Corporation.
4. No Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution, or winding-up of the Corporation, after distribution
in full of the preferential amounts, if any, to be distributed to the holders of
shares of any series of Preferred Stock, having a priority on liquidation
superior to that of the Series A Preferred Stock, the holders of shares of
Series A Preferred Stock shall be entitled to participate with the Common Stock
in all of the remaining assets of the Corporation available for distribution to
its stockholders, ratably with the holders of Common Stock in proportion to the
number of shares of Common Stock held by them, assuming for each holder of
Series A Preferred Stock on the record date for such distribution that each
holder was the holder of record of the number (including any fraction) of shares
of Common Stock into which the shares of Series A Preferred Stock then held by
such holder are then convertible. A liquidation, dissolution, or winding-up of
the Corporation, as such terms are used in this Section 4, shall not be deemed
to be occasioned by or to include any merger of the Corporation with or into one
or more corporations or other entities, any acquisition or exchange of the
outstanding shares of one or more classes or series of the Corporation, or any
sale, lease, exchange, or other disposition of all or a part of the assets of
the Corporation.
5. Voting Rights. Except as otherwise required by law, each share of outstanding
Series A Preferred Stock shall entitle the holder thereof to vote on each matter
submitted to a vote of the stockholders of the Corporation and to have the
number of votes equal to the number (including any fraction) of shares of Common
Stock into which such share of Series A Preferred Stock is then convertible
pursuant to the provisions hereof at the record date for the determination of
shareholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of
stockholders becomes effective. Except as otherwise required by law or by this
Certificate, the holders of shares of Common Stock and Series A Preferred Stock
shall vote together and not as separate classes.
6. Dividends and Distributions. If any dividend or other distribution payable in
cash, securities or other property, including a dividend payable in shares of
Common Stock, is declared on the Common Stock, each holder of shares of Series A
Preferred Stock on the record date for such dividend or distribution shall be
entitled to receive on the date of payment or distribution of such dividend or
other distribution the same cash, securities or other property which such holder
would have received on such record date if such holder was the holder of record
of the number (including any fraction) of shares of Common Stock into which the
shares of Series A Preferred Stock then held by such holder are then
convertible. No dividend or other distribution shall be declared or paid on the
Common Stock unless an equivalent dividend or other distribution that satisfies
this Section 6 is declared or paid on the Series A Preferred Stock.
7. Conversion. The holders of the Series A Preferred Stock shall have
conversion rights as follows:
(a) Optional Conversion. The holder of each share of Series A Preferred
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Stock shall have the right (the "Conversion Right"), at such holder's option, to
convert such share at any time, without cost, on the terms of this Section 7,
into the number of fully paid and non-assessable shares of Common Stock as
specified by the Conversion Ratio that is in effect at the time of conversion;
provided that, and only to the extent that, the
Corporation has a sufficient number of shares of authorized but unissued and
unreserved Common Stock available to issue upon conversion. The initial
"Conversion Ratio" for the Series A Preferred Stock is 1,000. The Conversion
Ratio shall be subject to adjustment from time to time as provided in this
Section 7.
(b) Mandatory Conversion. Upon the occurrence of an Increase in Authorized
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Common Stock, each outstanding share of Series A Preferred Stock shall
automatically be converted, without cost, on the terms set forth in this Section
into the number of fully paid and non-assessable shares of Common Stock as
specified by the Conversion Ratio that is in effect at the time of conversion.
An "Increase in Authorized Common Stock" shall be deemed to occur upon
effectiveness of a filing in the office of the Secretary of State of Delaware of
an amendment to (or amendment and restatement of) the Certificate of
Incorporation of the Corporation that increases the number of authorized shares
of Common Stock to a sufficient number (after taking into account all shares
reserved for issuance by the Board of Directors) so as to enable the conversion
of all outstanding shares of Series A Preferred Stock into such number of fully
paid and non-assessable shares of Common Stock as specified by the Conversion
Ratio then in effect.
(c) Mechanics of Conversion.
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(i) Optional Conversion. A holder of any share of Series A Preferred
Stock may exercise the Conversion Right of such share by surrendering the
certificate therefor, duly endorsed, at the office of the Corporation or of
any transfer agent for the Series A Preferred Stock, together with a
written notice to the Corporation which shall state: (A) that such holder
elects to convert the same; and (B) the number of shares of Series A
Preferred Stock being converted. Thereupon the Corporation shall promptly
issue and deliver to the holder of such shares a certificate or
certificates for the number of whole shares of Common Stock to which such
holder shall be entitled. In lieu of any fractional shares to which the
holder would otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the then fair market value (as determined in
good faith by the Board of Directors of the Corporation) of the Common
Stock. If the certificate evidencing the Series A Preferred Stock being
converted shall also evidence shares of Series A Preferred Stock not being
converted, then the Corporation shall also deliver to the holder of such
certificate a new stock certificate evidencing the Series A Preferred Stock
not converted. The conversion of any shares of Series A Preferred Stock
shall be deemed to have been made immediately prior to the close of
business on the date that the shares of Series A Preferred Stock to be
converted are surrendered to the Corporation, 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 record holder or
holders of such shares of Common Stock on such date. Any dividends or
distributions declared but unpaid at the time of conversion with respect to
the Series A Preferred Stock so converted, including any dividends declared
on the Common Stock to which the Series A Preferred Stock is entitled
pursuant to Section 6 above, shall be paid to the holder of Common Stock
issued upon conversion of the Series A Preferred Stock upon the payment
date therefore.
The Corporation shall give written notice to each holder of a
share of Series A Preferred Stock promptly upon the liquidation,
dissolution or winding up of the Corporation, and not more than fifty
(50) nor less than twenty (20) days before the anticipated date of
consummation of any acquisition of the Corporation or any sale of all
or substantially all of the assets of the Corporation and no such
acquisition of the Corporation or sale of assets shall be effective
until such notice shall have been given.
(ii) Mandatory Conversion. The Corporation shall give written notice
to each holder of a share of Series A Preferred Stock within ten (10) days
after the effectiveness of an Increase in Authorized Common Stock.
Following the conversion of such shares, each holder of shares so converted
may surrender the certificate therefor at the office of the Corporation or
any transfer agent for the Series A Preferred Stock. Upon such surrender,
the Corporation shall issue and deliver to each holder a certificate or
certificates for the number of whole shares of Common Stock to which such
holder is entitled. In lieu of any fractional shares to which the holder
would otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the then fair market value (as determined in good
faith by the Board of Directors of the Corporation) of the Common Stock.
The conversion of shares of Series A Preferred Stock shall be
effective simultaneously with the effectiveness of an Increase in
Authorized Common Stock, whether or not the certificates representing
such shares of Series A Preferred Stock shall have been surrendered or
new certificates representing the shares of Common Stock into which
such shares have been converted shall have been issued 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 record holder
or holders of such shares of Common Stock on such date. Any dividends
or distributions declared but unpaid at the time of a mandatory
conversion with respect to the Series A Preferred Stock so converted,
including any dividends declared on the Common Stock to which the
Series A Preferred Stock is entitled pursuant to Section 6 above, shall
be paid on the payment date therefore.
(d) Adjustment of Conversion Ratio. The Conversion Ratio for each share of
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Series A Preferred Stock and the kind of securities issuable upon the conversion
of any share of Series A Preferred Stock shall be adjusted from time to time as
follows:
(i) Subdivision or Combination of Shares. If the Corporation at any
time effects a subdivision or combination of the outstanding Common Stock,
the Conversion Ratio shall be increased, in the case of a subdivision, or
decreased, in the case of a combination, in the same proportions as the
Common Stock is subdivided or combined, in each case effective
automatically upon, and simultaneously with, the effectiveness of the
subdivision or combination which gives rise to the adjustment.
(ii) Reclassification, Consolidation or Merger. If at any time, as a
result of (A) a capital reorganization or reclassification (other than a
subdivision or combination which gives rise to an adjustment of the
Conversion Ratio pursuant to Section 7(d)(i)); or (B) a merger or
consolidation of the Corporation with another corporation (whether or not
the Corporation is the surviving corporation), the Common Stock issuable
upon the conversion of the Series A Preferred Stock shall be changed into
or exchanged for the same or a different number of shares of any class or
classes of stock of the Corporation or any other corporation, or other
securities convertible into such shares, then, as a part of such
reorganization, reclassification, merger or consolidation, appropriate
adjustments shall be made in the terms of the Series A Preferred Stock (or
of any securities into which the Series A Preferred Stock is changed or for
which the Series A Preferred Stock is exchanged), so that: (x) the holders
of Series A Preferred Stock or of such substitute securities shall
thereafter be entitled to receive, upon conversion of the Series A
Preferred Stock or of such substitute securities, the kind and amount of
shares of stock, other securities, money and property which such holders
would have received at the time of such capital reorganization,
reclassification, merger, or consolidation, if such holders had converted
their Series A Preferred Stock immediately prior to such capital
reorganization, reclassification, merger, or consolidation, and (y) the
Series A Preferred Stock or such substitute securities shall thereafter be
adjusted on terms as nearly equivalent as may be practicable to the
adjustments theretofore provided in this Section 7(d). No consolidation or
merger in which the Corporation is not the surviving corporation shall be
consummated unless the surviving corporation shall agree, in writing, to
the provisions of this Section 7(d)(ii). The provisions of this Section
7(d)(ii) shall similarly apply to successive capital reorganizations,
reclassifications, mergers, and consolidations.
(iii) Other Action Affecting Common Stock. If at any time the
Corporation takes any action affecting its Common Stock which, in the
opinion of the Board of Directors of the Corporation, would have an adverse
effect upon the Conversion Rights of the Series A Preferred Stock and the
foregoing conversion ratio adjustment provisions are not strictly
applicable but the failure to make any adjustment would adversely affect
the Conversion Rights, then the Conversion Ratio and the kind of securities
issuable upon the conversion of Series A Preferred Stock shall be adjusted
to preserve, without dilution, the Conversion Rights in such manner and at
such time as the Board of Directors of the Corporation may in good faith
determine to be equitable in the circumstances.
(iv) Notice of Adjustments. Whenever the Conversion Ratio or the kind
of securities issuable upon the conversion of any one of or all of the
Series A Preferred Stock shall be adjusted pursuant to Sections 7(d)(i)-
(iii) above, the Corporation shall make a certificate signed by its Chief
Financial Officer, Secretary or Assistant Secretary, setting forth, in
reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was
calculated (including a description of the basis on which the Board of
Directors of the Corporation made any determination hereunder), and the
Conversion Ratio and the kind of securities issuable upon the conversion of
the Series A Preferred Stock after giving effect to such adjustment, and
shall cause copies of such certificate to be mailed (by first class mail
postage prepaid) to each holder of Series A Preferred Stock promptly after
each adjustment.
(e) Full Consideration. All shares of Common Stock which shall be issued
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upon the conversion of any Series A Preferred Stock (which is itself fully paid
and non-assessable) will, upon issuance, be fully paid and non-assessable. The
Corporation will pay such amounts and will take such other action as may be
necessary from time to time so that all shares of Common Stock which shall be
issued upon the conversion of any Series A Preferred Stock will, upon issuance
and without cost to the recipient, be free from all pre-emptive rights, taxes,
liens and charges with respect to the issue thereof.
(f) No Impairment. The Corporation will not, by amendment of its
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Certificate of Incorporation or through any reorganization, 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
Section 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Preferred Stock against impairment.
(g) Cancellation of Series A Preferred Stock. No share of Series A
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Preferred Stock acquired by the Corporation upon conversion, redemption or
purchase shall be reissued and all such shares shall be canceled, retired and
returned to the status of authorized and unissued shares of undesignated
preferred stock. The Corporation may take such appropriate corporate action to
reduce the authorized number of Series A Preferred Stock accordingly.
8. Protective Provisions. In addition to any other rights provided by law, so
long as at least one share of Series A Preferred Stock is outstanding, the
Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a majority of the outstanding shares of
the Series A Preferred Stock voting together as a single class:
(a) amend or repeal any provision of the Corporation's Certificate of
Incorporation, Bylaws or this Certificate of Designations if such action would
materially and adversely alter or change the preferences, rights, privileges or
powers of, or the restrictions provided for the benefit of, the Series A
Preferred Stock;
(b) increase or decrease (other than by conversion) the total number of
authorized shares of Series A Preferred Stock;
(c) create or issue any series or class, reclassify any authorized capital
stock of the Corporation into stock of any series or class, increase the
authorized or issued amount of any class or series of stock, or authorize,
create, issue or reclassify any obligation or security convertible or
exchangeable into or evidencing a right to purchase capital stock of any class
or series, that ranks prior to the Series A Preferred Stock as to dividends or
rights upon liquidation, dissolution or winding up;
(d) issue any Common Stock after the date on which Series A Preferred Stock
has been last issued and sold, whether or not subsequently reacquired or retired
by the Corporation, for a consideration per share less than fair market value of
the Common Stock (as determined in good faith by the Board of Directors of the
Corporation) at such issuance or deemed issuance other than: (1) shares of
Common Stock issued in transactions giving rise to adjustments under Sections
7(d)(i) or (ii) above, (2) shares of Common Stock issued upon conversion of
shares of Series A Preferred Stock, or (3) shares issued upon the conversion of
Convertible Securities (as defined below) if the issuance of such Convertible
Securities did not violate Section 8(e) below;
(e) issue any Convertible Securities with respect to which the Effective
Price is less than the fair market value of the Common Stock (as determined in
good faith by the Board of Directors of the Corporation), at such issuance or
deemed issuance. "Convertible Securities" means all rights or options for the
purchase of, or stock or other securities convertible into, Common Stock (other
than Common Stock issued for the purposes set
forth in Sections 8(d)(1) or (2) above) or other Convertible Securities,
whenever and each time issued. The "Effective Price" with respect to any
Convertible Securities means the result of dividing: (1) the sum of (x) the
total consideration, if any, received by the Corporation for the issuance of
such Convertible Securities, plus (y) the minimum consideration, if any, payable
to the Corporation upon exercise or conversion of such Convertible Securities
(assuming that the full amount of securities issuable upon exercise or
conversion are issued), plus (z) the minimum consideration, if any, payable to
the Corporation upon exercise or conversion of any Convertible Securities
issuable upon exercise or conversion of such Convertible Securities, by: (2) the
maximum number of Common Stock (other than Common Stock issued for the purposes
set forth in Sections 8(d)(1) or (2) above) issuable upon exercise or conversion
of such Convertible Securities or of any Convertible Securities issuable upon
exercise or conversion of such Convertible Securities; or
(f) sell, convey, or otherwise dispose of or encumber all or substantially
all of its property or business or merge or consolidate with any other
corporation (other than a wholly-owned subsidiary corporation) or effect any
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Corporation is disposed of.
9. Severability of Provisions. If any voting powers, preferences and relative,
participating, optional and other special rights of the Series A Preferred Stock
and qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Series A Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series A Preferred Stock and
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Series A Preferred Stock and
qualifications, limitations, and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series A Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed herein.
C. The authorized number of shares of Preferred Stock of the Corporation
is 1,000,000 and the number of shares constituting the Series A Convertible
Preferred Stock, consisting of the shares authorized hereby, is 7,190.
IN WITNESS WHEREOF, the undersigned have executed this certificate as
of June 2, 2000, on behalf of the Corporation, and certify under penalty of
perjury that this is the act and deed of the Corporation, and that the facts
stated herein are true.
ZYDECO ENERGY, INC.
By: /s/ Sam B. Myers, Jr.
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