RESTATED
ARTICLES OF INCORPORATION
OF
FX ENERGY, INC.
The undersigned, pursuant to the Nevada Revised Statutes, hereby adopt
the following restated articles of incorporation of FX Energy, Inc. (referred to
herein as the "Corporation"), which articles of incorporation were originally
filed with the state of Nevada on January 24, 1989, were restated by filing
restated and amended articles of incorporation on April 5, 1993, were amended by
filing articles of amendment on July 23, 1996, and were restated by filing
restated and amended articles of incorporation on July 15, 1997 and by the
further amendment contained herein.
1. The name of the Corporation is: FX Energy, Inc.
2. The text of the restated articles of incorporation is as follows:
ARTICLE I
NAME
The name of the Corporation shall be: FX Energy, Inc.
ARTICLE II
PURPOSE
The Corporation is organized to engage in any lawful act or activity for
which a corporation may be organized under the Nevada Revised Statutes.
ARTICLE III
AUTHORIZED SHARES
The Corporation shall have the authority to issue 105,000,000 shares, of
which 100,000,000 shares shall be common stock, $0.001 par value ("Common
Stock"), and 5,000,000 shares shall be preferred stock $0.001 par value
("Preferred Stock"). Shares of any class of stock may be issued, without
stockholder action, from time to time in one or more series as may from time to
time be determined by the Board of Directors. The Board of Directors of this
Corporation is hereby expressly granted authority, without stockholder action,
and within the limits set forth in the Nevada Revised Statutes, to:
(a) designate in whole or in part, the voting powers,
preferences, limitations, restrictions, and relative rights, of any
class of shares before the issuance of any shares of that class;
(b) create one or more series within a class of shares, fix
the number of shares of each such series, and designate, in whole or
part, the voting powers, preferences, limitations, restrictions, and
relative rights of the series, all before the issuance of any shares of
that series; or
(c) alter or revoke the preferences, limitations, and relative
rights granted to or imposed upon any wholly unissued class of shares
or any wholly unissued series of any class of shares.
<PAGE>
The allocation between the classes, or among the series of each class, of
unlimited voting rights and the right to receive the net assets of the
Corporation upon dissolution, shall be as designated by the Board of Directors.
All rights accruing to the outstanding shares of the Corporation not expressly
provided for to the contrary herein or in the Corporation's bylaws or in any
amendment hereto or thereto shall be vested in the Common Stock. Accordingly,
unless and until otherwise designated by the Board of Directors of the
Corporation, and subject to any superior rights as so designated, the Common
Stock shall have unlimited voting rights and be entitled to receive the net
assets of the Corporation upon dissolution.
ARTICLE IV
BOARD OF DIRECTORS
Subject to such limitations as provided by the Nevada Revised Statutes
or these articles, the Board of Directors has full control over the affairs of
the Corporation. The Board of Directors may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law or by these
Articles of Incorporation directed or required to be exercised or done by the
stockholders of the Corporation.
(a) Number. The number of directors constituting the entire
Board of Directors shall be not less than three nor more than nine. The
specific number of directors constituting the entire Board of Directors
shall be authorized from time to time exclusively by the affirmative
vote of a majority of the entire Board of Directors. No decrease in the
number of directors shall shorten the term of any incumbent director.
As used in these articles of incorporation, the term "entire Board of
Directors" means the total authorized number of directors that the
corporation would have if there were no vacancies.
Notwithstanding the provisions of the foregoing paragraph,
whenever the holders of any class or series of Preferred Stock shall
have the right, voting as a class or series or otherwise, to elect
directors, the then authorized number of directors of the Corporation
shall be increased by the number of the additional directors so to be
elected, and the holders of such Preferred Stock shall be entitled, as
a class or series or otherwise, to elect such additional directors. Any
directors so elected shall hold office until their rights to hold such
office terminate pursuant to the provisions of such Preferred Stock.
The provisions of this paragraph shall apply notwithstanding the
maximum number of directors hereinabove set forth.
(b) Qualifications. The Board of Directors may, by the vote of
a majority of the entire board, prescribe qualifications of candidates
for the office of director of the Corporation, but no director then in
office shall be disqualified from office as a result of the adoption of
such qualifications.
(c) Classified Board; Tenure. The directors shall be divided
into three classes: class A, class B, and class C. The term of office
of directors shall be three years, staggered by class so that one class
is elected each year. Such classes shall be as nearly equal in number
as possible. Directors chosen to succeed those who have been removed or
whose terms have expired shall be identified as being of the same class
as the directors they succeed and shall be elected for a term expiring
at the expiration date of such class or thereafter when their
respective successors are elected and have been qualified. If the
number of directors is changed, any increase or decrease in directors
shall be apportioned among the classes so as to maintain all classes as
nearly equal in number as possible, and any individual director elected
to any class shall hold office for a term which shall coincide with the
term of such class. In no case will a decrease in the number of
directors shorten the term of any incumbent director.
2
<PAGE>
(d) Nominations. Advance written notice of nominations for the
election of directors, other than by the Board of Directors or a
committee thereof, shall be given at least 30 days prior to the date of
the meeting at which directors are to be elected in the manner provided
in the bylaws of the Corporation.
(e) Removal of Directors. Subject to the rights of the holders
of any Preferred Stock then outstanding, the stockholders may remove
one or more directors at a meeting of stockholders called expressly for
the purpose of removing directors, as stated in the notice of meeting,
with or without cause, on the affirmative vote of two-thirds of the
Common Stock or other securities of the Corporation entitled to vote
generally for the election of directors. In the event that cumulative
voting for directors is permitted pursuant to these articles of
incorporation, then no director may be removed except upon the vote of
stockholders owning sufficient shares to have prevented such director's
election to office in the first instance.
(f) Vacancies. Subject to the rights of the holders of any
Preferred Stock then outstanding, any vacancies in the Board of
Directors for any reason, including by reason of any increase in the
number of directors or any removal of an incumbent director, shall, if
occurring prior to the expiration of the term of office of the class in
which such vacancy occurs, be filled only by the Board of Directors,
acting by the affirmative vote of a majority of the remaining
directors, whether or not constituting a quorum. A director elected to
fill a vacancy shall be elected for the unexpired term of such
director's predecessor in office and until his or her successor is
elected and qualified or, if such vacancy is the result of an increase
in the number of directors, until the next meeting of stockholders at
which directors are elected. If there are no directors in office, then
an election of directors may be held in the manner provided by law.
(g) Cumulative Voting for Election of Directors in Certain
Circumstances.
(i) Except as and to the extent otherwise provided in
this paragraph (g), stockholders of the Corporation shall not
be entitled to cumulative voting rights in any election of
directors of the Corporation.
(ii) There shall be cumulative voting in any election
of directors of the Corporation on or after the occurrence of
both of the following events:
(A) the public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed pursuant to section 13(d)
under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) by the Corporation or any
Person (which in these articles shall mean any
individual, firm, corporation, or other entity, and
shall include any successor, by merger or otherwise,
of such entity) who or which, together with all
Affiliates and Associates (as such terms are defined
in rule 12b-2 of the General Rules and Regulations
under the Exchange Act as in effect on the date of
the adoption of these provisions by the stockholders
of the Corporation) of such Person, shall be the
Beneficial Owner (as defined in rule 13d-3 and rule
13d-5 of the General Rules and Regulations under the
Exchange Act as in effect on the date of the adoption
of these provisions by the stockholders of the
Corporation) of 30% or more of the Common Stock and
any other securities of the Corporation entitled to
vote generally for the election of directors (the
"Voting Stock"), including any security convertible
into or exchangeable for or exercisable for the
purchase of
3
<PAGE>
Voting Stock (any such person referred to herein as a
"30% Stockholder") that such Person has become a 30%
Stockholder; and
(B) such 30% Stockholder makes, or in any
way participates in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are
defined or used in regulation 14A under the Exchange
Act) or becomes a "participant" in any "election
contest" (as such terms are defined or used in rule
14a-11 of the Exchange Act) with respect to the
Corporation; seeks to advise or influence any person
(within the meaning of section 13(d)(3) of the
Exchange Act) with respect to the voting of any
securities of the Corporation; or executes any
written consent in lieu of a meeting of holders of
the Voting Stock, provided, however, that such
written consents are then permitted under these
articles.
(iii) Notwithstanding the foregoing, no Person shall
become a "30% Stockholder" as the result of an acquisition of
Common Stock by the Corporation which, by reducing the number
of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 30% or more of the
Voting Stock; provided, however, that if a Person who would
otherwise be a 30% Stockholder but for the provisions of this
sentence shall, after such share purchases by the Corporation,
become the Beneficial Owner of any additional Voting Stock,
then such Person shall be deemed to be a "30% Stockholder."
Further, the term "30% Stockholder" shall not include (A) the
Corporation, (B) any wholly-owned subsidiary of the
Corporation, (C) any employee benefit plan of the Corporation
or of any corporation or other entity of which a majority of
the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by the Corporation
(a "Subsidiary"), or (D) any Person holding securities of the
Corporation for or pursuant to the terms of any such plan.
(h) Amendment or Repeal. Notwithstanding anything to the
contrary contained in these articles, no amendment or repeal of the
provisions of this Article or related provision in the bylaws of the
Corporation shall be adopted unless it is approved by the vote of
two-thirds of the Common Stock or other securities of the Corporation
entitled to vote generally for the election of directors.
ARTICLE V
LIMITATION ON LIABILITY
OF DIRECTORS AND OFFICERS
To the fullest extent permitted by the Nevada Revised Statutes or any
other applicable law as now in effect or as it may hereafter be amended, a
director or officer of the Corporation shall have no personal liability to the
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer, except for damages resulting from (a) acts or omissions
which involve intentional misconduct, fraud, or a knowing violation of law, or
(b) the payment of dividends in violation of the provisions of section 78.300 of
the Nevada Revised Statutes, as it may be amended from time to time, or any
successor statute thereto.
ARTICLE VI
INDEMNIFICATION OF OFFICERS, DIRECTORS, AND OTHERS
To the fullest extent permitted by the Nevada Revised Statutes or any
other applicable law as now in effect or as it may hereafter be amended, the
Corporation shall indemnify directors and may indemnify officers, employees, or
agents of the Corporation to the extent authorized by the Board of Directors and
4
<PAGE>
in the manner set forth in the bylaws of the Corporation. Notwithstanding
anything to the contrary contained in these articles, no amendment or repeal of
the provisions of this Article or related provisions in the bylaws of the
Corporation shall be adopted unless it is approved by the vote of two-thirds of
the Common Stock or other securities of the Corporation entitled to vote
generally for the election of directors.
ARTICLE VII
STOCKHOLDER ACTION
Any action which may be taken at any annual or special meeting of
stockholders may be taken only upon the vote of the stockholders at an annual or
special meeting duly called and may not be taken without a meeting and without
prior notice by written consent of the stockholders. Notwithstanding anything to
the contrary contained in these articles, no amendment or repeal of the
provisions of this Article or related provisions in the bylaws of the
Corporation shall be adopted unless it is approved by the vote of holders of
two-thirds of the Common Stock or other securities of the Corporation entitled
to vote generally for the election of directors.
ARTICLE VIII
MEETINGS OF STOCKHOLDERS
Subject to the rights of the holders of any series of Preferred Stock,
special meetings of stockholders of the Corporation may be called only by the
Board of Directors pursuant to a resolution duly adopted by a majority of the
total number of directors which the Corporation would have if there were no
vacancies.
ARTICLE IX
BUSINESS AT ANNUAL MEETING
At an annual meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
brought before the annual meeting (a) by, or at the direction of, a majority of
the directors, or (b) by any stockholder of the Corporation who provides at
least 30 days advance written notice in compliance with the notice procedures
set forth in the bylaws of the Corporation. Notwithstanding anything to the
contrary contained in these articles, no amendment or repeal of the provisions
of this Article or related provisions in the bylaws of the Corporation shall be
adopted unless it is approved by the vote of two-thirds of the Common Stock or
other securities of the Corporation entitled to vote generally for the election
of directors .
ARTICLE X
ACQUISITION OF CONTROLLING INTEREST
The provisions of the Nevada Revised Statutes pertaining to the
acquisition of a controlling interest of the issued and outstanding shares of
the Corporation, section 78.378 et seq., of the Nevada Revised Statutes, shall
not be applicable to the acquisition of a controlling interest of the securities
of the Corporation. This election is made in accordance with the provisions of
section 78.378 of the Nevada Revised Statutes.
ARTICLE XI
STOCK REPURCHASES FROM INTERESTED STOCKHOLDERS
5
<PAGE>
(a) Vote Required for Certain Acquisitions of Securities.
Except as set forth in paragraph (b) of this Article, in addition to
any affirmative vote of stockholders required by any provision of law,
the articles of incorporation, or bylaws of the Corporation, or any
policy adopted by the Board of Directors, neither the Corporation nor
any Subsidiary (as defined above) shall knowingly effect any direct or
indirect purchase or other acquisition of any equity security of a
class of securities which is registered pursuant to section 12 of the
Exchange Act issued by the Corporation at a price which is in excess of
the Market Price (as defined below) of such equity security on the date
that the understanding to effect such transaction is entered into by
the Corporation (whether or not such transaction is concluded or a
written agreement relating to such transaction is executed on such
date, and such date to be conclusively established by determination of
the Board of Directors), from any Interested Stockholder (as defined
below) who has beneficially owned such securities for less than three
years prior to the date of such purchase, without the affirmative vote
of the holders of the Voting Stock which represent at least two-thirds
of the outstanding Common Stock and any other securities of the
Corporation entitled to vote generally for the election of directors
("Voting Stock"), excluding Voting Stock beneficially owned by such
Interested Stockholder. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or any agreement with any national
securities exchange, or otherwise.
(b) When a Vote is Not Required. The provisions of paragraph
(a) of this Article shall not be applicable with respect to:
(i) any purchase, acquisition, redemption, or
exchange of such equity securities, the purchase, acquisition,
redemption, or exchange of which is provided for in the
Corporation's articles of incorporation;
(ii) any purchase or other acquisition of equity
securities made as part of a tender or exchange offer by the
Corporation to purchase securities of the same class made on
the same terms to all holders of such securities and complying
with the applicable requirements of the Exchange Act and the
rules and regulations thereunder (or any successor provisions
to such Act, rules, or regulations);
(iii) an open market stock purchase program approved
by a majority of those members of the Board of Directors who
were duly elected and acting members of the Board of Directors
prior to the time such Interested Stockholder became such; or
(iv) any purchase, acquisition, redemption, or
exchange of such equity securities, the purchase, acquisition,
redemption, or exchange of which is provided by an executive
compensation plan, including any employment agreement or stock
option agreement, approved by the Board of Directors or a
committee of non-employee directors.
(c) Certain Definitions. For purposes of this Article, the
following terms shall have the following meanings:
(i) "Interested Stockholder" shall mean any Person
(other than the Corporation or any Subsidiary) that is the
direct or indirect Beneficial Owner (as defined in rule 13d-3
and rule 13d-5 of the General Rules and Regulations under the
Exchange Act as in effect on the date of the adoption of these
provisions by the stockholders of the Corporation) of more
than 10% of the aggregate Voting Stock, and any Affiliate or
6
<PAGE>
Associate (as such terms are defined in rule 12b-2 of the
General Rules and Regulations under the Exchange Act as in
effect on the date of the adoption of these provisions by the
stockholders of the Corporation) of any such Person. For the
purpose of determining whether a Person is an Interested
Stockholder, the outstanding Voting Stock shall include
unissued shares of voting stock of the corporation of which
the Interested Stockholder is the Beneficial Owner, but shall
not include any other shares of Voting Stock of the
Corporation which may be issuable pursuant to any agreement,
arrangement, or understanding, or upon exercise of conversion
rights, warrants, or options, or otherwise, to any Person who
is not the Interested Stockholder.
(ii) "Market Price" of shares of a class of an equity
security of the Corporation on any day shall mean the highest
closing sale price (regular way) of shares of such class of
such equity security during the 30 day period immediately
preceding such day, on the largest principal national
securities exchange on which such class of stock is then
listed or admitted to trading, or if not listed or admitted to
trading on any national securities exchange, then the highest
reported closing sale price for such shares in the
over-the-counter market as reported on the Nasdaq Stock
Market, or if such sale prices shall not be reported thereon,
the highest closing bid price so reported, or, if such price
shall not be reported thereon, as the same shall be reported
by the National Quotation Bureau Incorporated, or if the price
is not determinable as set forth above, as determined in good
faith by the Board of Directors.
(d) Amendment or Repeal. Notwithstanding anything to the
contrary contained in these articles, no amendment or repeal of the
provisions of this Article or related provisions in the bylaws of the
Corporation shall be adopted unless it is approved by the vote of
two-thirds of the Common Stock or other securities of the Corporation
entitled to vote generally for the election of directors.
ARTICLE XII
POWER OF BOARD TO OPPOSE CERTAIN TRANSACTIONS
(a) Factors to Consider. The Board of Directors may oppose a
tender or other offer for the Corporation's securities, whether the
offer is in cash or in the securities of a corporation or otherwise, or
any other Business Combination (as defined below) if the directors, by
a majority vote of a quorum, determine that the offer or Business
Combination is opposed to or not in the best interests of the
Corporation. When considering whether to oppose an offer or Business
Combination, the Board of Directors may, but is not legally obligated
to, consider any relevant factors, including those factors specifically
enumerated under section 78.138 of the Nevada Revised Statutes. By way
of illustration, but not limitation, the Board of Directors may, but
shall not be legally obligated to, consider any and all of the
following: (i) whether the offer price is acceptable based on the
historical and present operating results or financial condition of the
Corporation, or based on the current value of the Corporation in a
freely negotiated transaction; whether a more favorable price could be
obtained for the Corporation's securities in the future; (ii) the
social, legal and economic impact which an acquisition of the
Corporation would have on the employees, suppliers, creditors, and
customers of the Corporation and any Subsidiary (as defined above) and
on the community or communities in which the Corporation and its
Subsidiaries do business; (iii) the economy of the states and of the
nations in which the Company and its Subsidiaries do business; (iv) the
reputation, character, integrity, business philosophy, financial status
and business practices of the offeror and its management and affiliates
and as they would affect the employees, suppliers, creditors, and
customers of the
7
<PAGE>
Corporation and its Subsidiaries and the future value of the
Corporation's stock; (v) the value of the securities, if any, which the
offeror is offering in exchange for the Corporation's securities, based
on an analysis of the worth of the Corporation as compared to the
corporation or other entity whose securities are being offered; (vi)
any antitrust or other legal and regulatory issues that are raised by
the offer; (vii) the possibility that the interests of the
Corporation's stockholders may be best served by the continued
independence of the Corporation; (viii) the possible effects of the
Business Combination on the Corporation's then existing relationships
with any foreign government or nation in which the Corporation and its
Subsidiaries do business or hold property interests and rights; (ix)
whether the amount or nature of indebtedness or other obligations to
which the Corporation may become subject in connection with the
Business Combination provides reasonable grounds to believe that within
a reasonable time: (A) the assets of the Corporation or any successor
would be or become less than its liabilities, (B) the Corporation or
any successor would be or become insolvent; or (C) any voluntary or
involuntary proceeding under the federal bankruptcy laws concerning the
Corporation or any successor corporation would be commenced by any
person; and (x) any other relevant factors, including the long-term as
well as the short-term interests of the Corporation and its
stockholders, whether or not such other factors are monetary or
non-monetary in nature, or are stockholder or non-stockholder
considerations.
(b) Permitted Action. If the Board of Directors determines
that an offer should be rejected, it may take any lawful action to
accomplish its purpose, including, but not limited to, any or all of
the following: advising stockholders not to accept the offer;
litigation against the offeror; filing complaints with all governmental
and regulatory authorities; acquiring the Corporation's securities;
selling or otherwise issuing authorized but unissued securities or
treasury stock or granting options with respect thereto including,
without limitation, creating a so-called "poison pill" defense
(including both put and call poison pills), "rights plan" or any other
anti-takeover defense permitted under the articles of incorporation and
under state law; refusing to redeem any outstanding "poison pill" right
or option or refusing to remove any other barriers to the offer;
acquiring a company to create an antitrust or other regulatory problem
for the offeror; establishing employee stock ownership plans; and
obtaining a more favorable offer from another individual or entity.
(c) Certain Definitions. For purposes of this Article, the
following terms shall have the following meanings:
(i) "Interested Stockholder" shall mean any Person
(other than the Corporation or any Subsidiary) that is the
direct or indirect Beneficial Owner (as defined in rule 13d-3
and rule 13d-5 of the General Rules and Regulations under the
Exchange Act as in effect on the date of the adoption of these
provisions by the stockholders of the Corporation) of more
than 10% of the aggregate voting power of the Common Stock or
other securities of the Corporation entitled to vote generally
for the election of directors ("Voting Stock"), and any
Affiliate or Associate (as such terms are defined in rule
12b-2 of the General Rules and Regulations under the Exchange
Act as in effect on the date of the adoption of these
provisions by the stockholders of the Corporation) of any such
Person. For the purpose of determining whether a Person is an
Interested Stockholder, the outstanding Voting Stock shall
include unissued shares of Voting Stock of the Corporation of
which the Interested Stockholder is the Beneficial Owner, but
shall not include any other shares of Voting Stock of the
Corporation which may be issuable pursuant to any agreement,
arrangement, or understanding, or upon exercise of
8
<PAGE>
conversion rights, warrants, or options, or otherwise, to any
Person who is not the Interested Stockholder.
(ii) "Business Combination" shall mean (A) any
merger, consolidation, or share exchange of the Corporation or
any of its Subsidiaries within or into an Interested
Stockholder, in each case irrespective of which corporation or
company is to be the surviving entity; (B) any sale, lease,
exchange, mortgage, pledge, transfer, or other disposition to
or with an Interested Stockholder (in a single transaction or
a series of related transactions) of all or a substantial part
of the assets of the Corporation (including, without
limitation, any securities of a Subsidiary of the Corporation)
or all or a substantial part of the assets of any of its
Subsidiaries; (C) any sale, lease, exchange, mortgage or
pledge, transfer, or other disposition to or with the
Corporation, or to or with any of its Subsidiaries (in a
single transaction or series of related transactions) of all
or a substantial part of the assets of an Interested
Stockholder; (D) the issuance or transfer by the Corporation
or any of its Subsidiaries of any securities of the
Corporation or any of its Subsidiaries to an Interested
Stockholder (other than an issuance or transfer of securities
which is effected on a pro rata basis to all stockholders of
the Corporation); (E) any acquisition by the Corporation or
any of its Subsidiaries of any securities issued by an
Interested Stockholder; (F) any recapitalization or
reclassification of shares of any class of voting stock of the
Corporation or any merger or consolidation of the Corporation
with any of its Subsidiaries which would have the effect,
directly or indirectly, of increasing the proportionate share
of the outstanding shares of any class of capital stock of the
Corporation (or any securities convertible into any class of
such capital stock) owned by any Interested Stockholder; (G)
any merger or consolidation of the Corporation with any of its
Subsidiaries after which the provisions of this Article shall
not appear in the articles of incorporation (or the equivalent
charter documents) of the surviving entity; (H) any plan or
proposal for the liquidation or dissolution of the
Corporation; and (I) any agreement, contract or other
arrangement providing for any of the transactions described in
this definition of Business Combination. Whether or not any
proposed sale, lease, exchange, mortgage, pledge, transfer, or
other disposition of part of the assets of any entity involves
a "substantial part" of the assets of such entity shall be
conclusively determined by a two-thirds vote of the Board of
Directors; provided, however, that assets involved in any
single transaction or series of related transactions having an
aggregate fair market value, as determined by the Board of
Directors, of more than 15% of the total consolidated assets
of an entity and its subsidiaries as at the end of such
entity's last full fiscal year prior to such determination
shall always be deemed to constitute a "substantial part."
(d) Effect on Directors' Power and Liability. Nothing
contained herein shall be deemed to limit or restrict the powers of the
Board of Directors, or to enlarge the duties of the Board of Directors,
as provided in Nevada law, or to create director liability for taking
any action authorized hereunder.
(e) Amendment or Repeal. Notwithstanding anything to the
contrary contained in these articles, no amendment or repeal of the
provisions of this Article or related provisions in the bylaws of the
Corporation shall be adopted unless it is approved by the vote of
two-thirds of the Common Stock or other securities of the Corporation
entitled to vote generally for the election of directors.
9
<PAGE>
ARTICLE XIII
FAIR PRICE ON BUSINESS COMBINATIONS
(a) Vote Required. No Business Combination (as defined below)
shall be consummated or effected unless such Business Combination shall
have been approved by the affirmative vote of the holders of not less
than two-thirds of the total voting power of all outstanding shares of
Common Stock or other securities of the Corporation entitled to vote
generally for the election of directors. Such vote shall be required
notwithstanding the fact that no vote for such a transaction may be
required by law or that approval by some other percentage of
stockholders may be specified by law or in any agreement with any
national securities exchange or otherwise. This Article shall not be
deemed to affect the provisions of any such law or agreement requiring
any vote or approval by the stockholders or directors respecting a
proposed Business Combination.
(b) Vote Not Required. The vote required pursuant to paragraph
(a) above shall not be required if either of the following conditions
is satisfied, or if, in the case of a Business Combination not
involving the receipt of consideration by the holders of the
Corporation's outstanding capital stock, the condition specified in
subparagraph (i) is met:
(i) The Continuing Directors (as defined below) shall
have expressly approved such Business Combination by a
two-thirds vote either in advance of or subsequent to the
acquisition of outstanding shares of capital stock of the
Corporation that caused the Interested Stockholder involved to
become an Interested Stockholder. In determining whether or
not to approve any such Business Combination, the Continuing
Directors may give due consideration to all factors they
consider relevant, including without limitation, those
identified in these articles; or
(ii) All of the following conditions shall have been
met:
(A) The cash, or fair market value of other
consideration, to be received per share by the
stockholders of the Corporation in such Business
Combination bears the same or a greater percentage
relationship to the Market Price of the Corporation's
capital stock immediately prior to the announcement
of such Business Combination as the highest per share
price (including brokerage commissions and/or
soliciting dealers' fees) which the Interested
Stockholder has theretofore paid for any of the
shares of the Corporation's capital stock already
owned by it bears to the Market Price of the Common
Stock of the Corporation immediately prior to the
commencement of acquisition of the Corporation's
capital stock by the Interested Stockholder; and
(B) The cash, or fair market value of other
consideration, to be received per share by the
stockholders of the Corporation in such Business
Combination (1) is not less than the highest per
share price (including brokerage commissions and/or
soliciting dealers' fees) paid by the Interested
Stockholder in acquiring any of its holdings of the
Corporation's capital stock, (2) is not less than the
per share Market Price (defined below) of the Common
Stock on the date of the announcement of the
Combination, and (3) is not less than the earnings
per share of capital stock of the Corporation for the
four full consecutive fiscal quarters, or the last
fiscal year reported, whichever is higher,
immediately preceding the record date for
solicitation of votes on such Business Combination,
multiplied by the higher of either the highest
price/earnings
10
<PAGE>
multiple of the Corporation during the two years
prior to the announcement of such Business
Combination or the then price/earnings multiple (if
any) of the Interested Stockholder as customarily
computed and reported in the financial community; and
(C) The per share price to be received by
the stockholders must include an additional premium
over the value determined in accordance with (a) and
(b) above that is equal to the total of
(i) the per share equivalent of the
value of the Corporation's oil reserves
classified as "possible" under the then
current criteria of the Society of Petroleum
Engineers of the American Institute of
Mining Engineers, as of a reasonably
practicable date not more than 180 days
prior to the record date for solicitation of
votes on such Business Combination, as
evaluated by a reputable and qualified
petroleum engineer as determined by the
Company's continuing directors; and
(ii) the per share equivalent of 20%
of the highest consolidated balance of
domestic and foreign cash, cash equivalents,
and marketable securities held by the
Company at any time during the period
commencing on the date the Interested
Stockholder first acquired any shares of the
Company's capital stock and terminating on
the 15th day prior to the date on which the
proxy statement referred to in (E) below is
scheduled to be mailed to the public
stockholders of the Corporation; and
(D) After the Interested Stockholder has
acquired a 10% interest and prior to the consummation
of such Business Combination: (1) the Interested
Stockholder shall have taken steps to ensure that the
Corporation's Board of Directors includes at all
times representation by Continuing Directors
proportionate to the shareholdings of the
Corporation's public stockholders not affiliated with
the Interested Stockholder (with a Continuing
Director to occupy any resulting fractional board
position); (2) there shall have been no change in the
amount per share payable or paid as dividends on the
Corporation's capital stock, except as may have been
approved by a unanimous vote of the directors; (3)
the Interested Stockholder shall not have acquired
any newly issued shares of stock, directly or
indirectly, from the Corporation (except upon
conversion of convertible securities acquired by it
prior to obtaining a 10% interest or as a result of a
pro rata stock dividend or stock split); and (4) the
Interested Stockholder shall not have acquired any
additional shares of the Corporation's outstanding
capital stock or securities convertible into capital
stock, except as a part of the transaction which
results in the Interested Stockholder acquiring its
10% interest; and
(E) The Interested Stockholder shall not
have (1) received the benefit, directly or indirectly
(except proportionately as a stockholder), of any
loans, advances, guarantees, pledges, or other
financial assistance or tax credits provided by the
Corporation, or (2) made any major change in the
Corporation's business or equity capital structure
without the unanimous approval of the
11
<PAGE>
directors, in either case prior to the consummation
of such Business Combination; and
(F) Prior to the consummation of any
Business Combination and prior to any vote of the
Corporation's stockholders under paragraph (a) of
this Article, a proxy statement or information
statement complying with the requirements of the
Exchange Act shall have been mailed to all
stockholders of the Corporation for the purpose of
informing the Corporation's stockholders about such
proposed Business Combination and, if their approval
is required by paragraph (a) of this Article, for the
purpose of soliciting stockholder approval of such
Business Combination. Such proxy statement or
information statement shall contain at the front
thereof, in a prominent place, a statement by the
Continuing Directors of their position on the
advisability (or inadvisability) of the proposed
Business Combination and, if deemed advisable by a
majority of the Continuing Directors, an opinion of a
reputable investment banking firm as to the fairness
(or not) of the terms of such Business Combination,
from the point of view of the remaining stockholders
of the Corporation (such investment banking firm to
be selected by a majority of the Continuing Directors
and to be paid a reasonable fee for their services by
the Corporation).
(c) Certain Definitions. For purposes of this Article, the
following terms shall have the following meanings:
(i) The term "Continuing Director" shall mean any
director of the Corporation who was a director prior to the
time the Interested Stockholder became such, and any other
director whose election as a director was recommended or
approved by a majority of Continuing Directors. Any action
required to be taken by vote of the Continuing Directors shall
be effective only if taken at a meeting at which two-thirds of
the Continuing Directors capable of exercising the powers
conferred upon them under the provisions of these articles of
incorporation or the bylaws of the Corporation or by law are
present.
(ii) "Interested Stockholder" shall mean any Person
(other than the Corporation or any Subsidiary) that is the
direct or indirect Beneficial Owner (as defined in rule 13d-3
and rule 13d-5 of the General Rules and Regulations under the
Exchange Act as in effect on the date of the adoption of these
provisions by the stockholders of the Corporation) of more
than 10% of the aggregate voting power of the Common Stock or
other securities of the Corporation entitled to vote generally
for the election of directors ("Voting Stock"), and any
Affiliate or Associate (as such terms are defined in rule
12b-2 of the General Rules and Regulations under the Exchange
Act as in effect on the date of the adoption of these
provisions by the stockholders of the Corporation) of any such
Person. For the purpose of determining whether a Person is an
Interested Stockholder, the outstanding Voting Stock shall
include unissued shares of voting stock of the corporation of
which the Interested Stockholder is the Beneficial Owner, but
shall not include any other shares of Voting Stock of the
Corporation which may be issuable pursuant to any agreement,
arrangement, or understanding, or upon exercise of conversion
rights, warrants, or options, or otherwise, to any Person who
is not the Interested Stockholder.
12
<PAGE>
An Interested Stockholder shall be deemed to have
acquired a share of the capital stock of the Corporation at
the time when such Interested Stockholder became the
Beneficial Owner thereof. With respect to shares owned by
Affiliates or Associates of an Interested Stockholder or other
person whose ownership is attributed to an Interested
Stockholder, for purposes of subparagraph (ii) of this
paragraph (c), such Interested Stockholder shall be deemed to
have purchased such shares at the higher of (A) the price paid
upon the acquisition thereof by the Affiliate, Associate, or
other person who owns such shares, or (B) the Market Price of
the shares in question at the time when the Interested
Stockholder became the Beneficial Owner thereof.
(iii) "Business Combination" shall mean (A) any
merger, consolidation, or share exchange of the Corporation or
any of its Subsidiaries within or into an Interested
Stockholder, in each case irrespective of which corporation or
company is to be the surviving entity; (B) any sale, lease,
exchange, mortgage, pledge, transfer, or other disposition to
or with an Interested Stockholder (in a single transaction or
a series of related transactions) of all or a substantial part
of the assets of the Corporation (including, without
limitation, any securities of a Subsidiary of the Corporation)
or all or a substantial part of the assets of any of its
Subsidiaries; (C) any sale, lease, exchange, mortgage, or
pledge, transfer, or other disposition to or with the
Corporation, or to or with any of its Subsidiaries (in a
single transaction or series of related transactions) of all
or a substantial part of the assets of an Interested
Stockholder; (D) the issuance or transfer by the Corporation
or any of its Subsidiaries of any securities of the
Corporation or any of its Subsidiaries to an Interested
Stockholder (other than an issuance or transfer of securities
which is effected on a pro rata basis to all stockholders of
the Corporation); (E) any acquisition by the Corporation or
any of its Subsidiaries of any securities issued by an
Interested Stockholder; (F) any recapitalization or
reclassification of shares of any class of voting stock of the
Corporation or any merger or consolidation of the Corporation
with any of its Subsidiaries which would have the effect,
directly or indirectly, of increasing the proportionate share
of the outstanding shares of any class of capital stock of the
Corporation (or any securities convertible into any class of
such capital stock) owned by any Interested Stockholder; (G)
any merger or consolidation of the Corporation with any of its
Subsidiaries after which the provisions of this Article shall
not appear in the articles of incorporation (or the equivalent
charter documents) of the surviving entity; (H) any plan or
proposal for the liquidation or dissolution of the
Corporation; and (I) any agreement, contract or other
arrangement providing for any of the transactions described in
this definition of Business Combination. Whether or not any
proposed sale, lease, exchange, mortgage, pledge, transfer, or
other disposition of part of the assets of any entity involves
a "substantial part" of the assets of such entity shall be
conclusively determined by a two-thirds vote of the Board of
Directors; provided, however, that assets involved in any
single transaction or series of related transactions having an
aggregate fair market value, as determined by the Board of
Directors, of more than 15% of the total consolidated assets
of an entity and its subsidiaries as at the end of such
entity's last full fiscal year prior to such determination
shall always be deemed to constitute a "substantial part."
(iv) "Market Price" of shares of a class of an equity
security of the Corporation on any day shall mean the highest
closing sale price (regular way) of shares of such class of
such equity security during the 30 day period immediately
preceding such day, on the largest principal national
securities exchange on which such class of stock is then
listed or admitted to trading, or if not listed or admitted to
trading on any
13
<PAGE>
national securities exchange, then the highest reported
closing sale price for such shares in the over-the-counter
market as reported on the Nasdaq Stock Market, or if such sale
prices shall not be reported thereon, the highest closing bid
price so reported, or, if such price shall not be reported
thereon, as the same shall be reported by the National
Quotation Bureau Incorporated, or if the price is not
determinable as set forth above, as determined in good faith
by the Board of Directors.
(d) No proposal to amend or repeal this Article may be
authorized and approved except by the affirmative vote of the holders
of voting stock entitling them to exercise two-thirds of the voting
power of the Corporation voting together as a class, unless required to
vote separately by law or by other provisions of these articles of
incorporation or by the terms of the stock entitling them to vote and,
if a proposal upon which holders of shares of a particular class or
classes are so required to vote separately, then by the affirmative
vote of the holders of shares entitling them to exercise two-thirds of
the voting power of each such class or classes; provided, however, that
the provisions of this paragraph (d) shall not apply to any such
amendment or repeal of this Article that has been favorably recommended
to the stockholders by resolution of the Board of Directors adopted by
a two-thirds vote of the Continuing Directors, in which case any such
amendment or repeal of this Article may be authorized and approved by
the affirmative vote of such number of the holders of voting stock as
may be required by law.
(e) Amendment or Repeal. Notwithstanding anything to the
contrary contained in these articles, no amendment or repeal of the
provisions of this Article or related provisions in the bylaws of the
Corporation shall be adopted unless it is approved by the vote of
two-thirds of the Common Stock or other securities of the Corporation
entitled to vote generally for the election of directors (the "Voting
Stock").
ARTICLE XIV
REGISTERED OFFICE AND REGISTERED AGENT
The address of the Corporation's registered office and the name of the
registered agent at that address in the state of Nevada is:
The Corporation Trust Company of Nevada
One East First Street
Reno, Nevada 89501
Either the registered office or the registered agent may be changed in the
manner provided for by law.
ARTICLE XV
AMENDMENTS
The Corporation reserves the right to amend, alter, change, or repeal
all or any portion of the provisions contained in these articles of
incorporation from time to time in accordance with the laws of the state of
Nevada, and all rights conferred on stockholders herein are granted subject to
this reservation.
ARTICLE XVI
ADOPTION OR AMENDMENT OF BYLAWS
The bylaws of the Corporation shall be adopted by the Board of
Directors. The power to alter, amend, or repeal the bylaws or adopt new bylaws
shall be vested in the Board of Directors, but the
14
<PAGE>
stockholders of the Corporation may also alter, amend, or repeal the bylaws or
adopt new bylaws. The bylaws may contain any provisions for the regulation or
management of the affairs of the Corporation not inconsistent with the laws of
the state of Nevada now or hereafter existing.
ARTICLE XVII
REDEMPTION OF SHAREHOLDER RIGHTS
Rights issued pursuant to any shareholders' rights plan(s) may only be
redeemed by the Board of Directors' Rights Redemption Committee, a subcommittee
of the Board of Directors that is appointed by the Board of Directors and is
constituted entirely of at least three Continuing Directors, at least a majority
of whom are not employees of the Corporation. For purposes of this Article, the
term "Continuing Director" means any duly constituted director of the
Corporation who was a director prior to the time the Interested Stockholder
became such, and any other director whose election or appointment as a director
was recommended for approval by a majority of Continuing Directors. For the
purposes of this definition, the term "employee" means any person who is
currently or who has been during the preceding 12 months a full-time employee of
the Company. In the event of the failure or refusal of the Board of Directors to
duly appoint a Rights Redemption Committee, then the persons constituting the
Audit Committee of the Board of Directors shall also constitute the Rights
Redemption Committee. Any action required to be taken by vote of the Continuing
Directors shall be effective only if taken at a meeting at which two-thirds of
the Continuing Directors capable of exercising the powers conferred upon them
under the provisions of these articles of incorporation or the bylaws of the
Corporation or by law are present.
Any bylaw subsequently adopted by the shareholders requiring the Board
of Directors, or a subcommittee thereof, to redeem rights issued pursuant to any
shareholders' rights plans then outstanding must be adopted by the vote of
stockholders representing not less than two-thirds of the Common Stock or other
securities of the Corporation entitled to vote generally for the election of
directors.
Notwithstanding anything to the contrary contained in these articles,
no amendment or repeal of the provisions of this Article or related provisions
in the bylaws of the Corporation shall be adopted unless it is approved by the
vote of two-thirds of the Common Stock or other securities of the Corporation
entitled to vote generally for the election of directors.
ARTICLE XVIII
CURRENT DIRECTORS
The name and address of each person who currently serves as a director
of the Corporation, to each serve until the expiration of his or her respective
term and until his or her successor is elected and shall qualify, is as follows:
Name Address
-------------------------- ----------------------------------
David N. Pierce 3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
Andrew W. Pierce 3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
Jerzy B. Maciolek 1834 Mayweather
Houston, TX 77469
15
<PAGE>
Thomas B. Lovejoy 48 Burying Hill Road
Greenwich, Connecticut 06831
Scott J. Duncan 3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
Dennis L. Tatum 3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
Peter L. Raven 12 Old Stone Hill Road
Poundridge, New York 10576
Jay W. Decker 1625 Broadway, Suite 2001
Denver, CO 80202
Dennis B. Goldstein 1600 Riviera Avenue, Suite 200
Walnut Creek, CA 94108
16
<PAGE>
The foregoing Restated Articles of Incorporation were adopted by the
shareholders of the Corporation on June 28, 2000, pursuant to section 78.380 et
seq. of the Nevada Revised Statutes. The Corporation has only one class of
shares issued and outstanding, that being Common Stock. The number of shares of
Common Stock issued and outstanding and entitled to vote on May 5, 2000, the
record date for consideration of the restated articles was 14,849,003. The
shareholders voted by provisions summarized as set forth below and as described
in detail in the Proxy Statement for the 1999 Annual Stockholders' Meeting of
the Company. Set forth below is the number of shares voted in favor of adoption
of the provisions of the Restated Articles of Incorporation to:
(a) Increase the Company's authorized capitalization to
100,000,000 shares of common stock, retaining the 5,000,000
shares of preferred stock currently authorized (Article III);
For 11,575,777 Against 1,539,381
By executing these Restated Articles of Incorporation the president and
the secretary do hereby certify that on June 28, 2000 the foregoing amendments
were authorized and approved pursuant to section 78.390 of the Nevada Revised
Statutes. The undersigned affirms and acknowledges, under penalties of perjury,
that the foregoing instrument is my act and deed and that the facts stated
herein are true.
DATED this 9th day of August, 2000.
FX ENERGY, INC.
By: /s/ David N. Pierce /s/ Scott J. Duncan
----------------------------- ----------------------------
David N. Pierce, President Scott J. Duncan, Secretary
STATE OF UTAH )
:ss
COUNTY OF SALT LAKE )
On this 9th day of August 2000, personally appeared before me, the
undersigned, a notary public, David N. Pierce and Scott J. Duncan, who being
first duly sworn, declared they are the president and secretary, respectively,
of FX Energy, Inc., acknowledged that they signed the forgoing Restated Articles
of Incorporation, and verified that the statements contained therein are true.
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
[notary seal] /s/ Michele B. Rehermann
------------------------------
Notary Public
17
