Item 5.01 Changes in Control of Registrant.
As previously disclosed in the Current Report on Form 8K filed by Abraxas
Petroleum Corporation (the "Company") with the Securities and Exchange
Commission on January 3, 2022, the Company and AG Energy Funding, LLC ("AGEF")
entered into an Exchange Agreement dated January 3, 2022 (the "Exchange
Agreement"), pursuant to which the Company issued 685,505 shares of its Series A
Preferred Stock (the "Preferred Shares") to AGEF, which entitled AGEF to
approximately 85% of the voting power of the Company's outstanding capital
stock.
On September 13, 2022, AGEF and Biglari Holdings Inc., an Indiana corporation
("Biglari"), entered into a Preferred Stock Purchase Agreement (the "Purchase
Agreement") and an Assignment and Assumption Agreement (the "Assignment
Agreement"), pursuant to which AGEF agreed to sell and assign to Biglari, and
Biglari agreed to purchase, acquire, and assume from AGEF, all of AGEF's
Preferred Shares and all of AGEF's rights, title, and interests in, and duties
and obligations under, the Exchange Agreement (such transactions between AGEF
and Biglari, the "Sale and Assignment"). Following Biglari's acquisition of the
Preferred Shares, a change in control of the Company occurred. Biglari's
ownership of the Preferred Shares results in its beneficial ownership, both
directly and indirectly, of the approximately 85% of the Company's voting
securities that AGEF owned prior to effecting the Sale and Assignment. In
exchange for the Preferred Shares, Biglari paid consideration to AGEF in an
amount of $80,000,000. Biglari used working capital and cash on hand to fund the
purchase of the Preferred Shares.
The information set forth in Item 5.02 of this Current Report on Form 8-K is
incorporated by reference herein.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the transactions contemplated by the Purchase Agreement,
Messrs. Todd Dittmann, David Roberts, Damon Putman, and Daniel Baddeloo tendered
letters of resignation to the board of directors of the Company (the "Board") in
which they resigned from their positions on the Board. In accordance with the
terms of the Purchase Agreement, the resignations became effective immediately
prior to 10:00 a.m., New York City time, on September 13, 2022 (the "Closing").
At the time of their resignations, Mr. Dittmann served as a Class I member of
the Board, Mr. Roberts served as a Class II member of the Board, and Messrs.
Putman and Baddeloo served as Class III members of the Board. Messrs. Putman and
Baddeloo also held positions on the Company's Audit and Compensation Committees,
with Mr. Baddeloo being the Chairman of the Audit Committee and Mr. Putman being
the Chairman of the Compensation Committee. Messrs. Dittmann, Roberts, Putman,
and Baddeloo resigned from the Board given the change in control of the Company
described in Item 5.01 of this Current Report on Form 8-K and in accordance with
the conditions of Closing set forth in the Purchase Agreement. Mr. Robert L.G.
Watson will continue to serve as a Class II member of the Board until the
expiration of his term when he stands for re-election in 2023. Mr. Brian L.
Melton will continue to serve as a Class III member of the Board until the
expiration of his term when he stands for re-election in 2025.
In accordance with the terms of the Purchase Agreement, on September 13, 2022,
the Board voted to appoint Messrs. Sardar Biglari, Philip Cooley, and Bruce
Lewis as members of the Board to fill vacancies created by the resignations of
Messrs. Dittmann, Putman, and Baddeloo. Mr. Biglari will fill the vacancy
created by the resignation of Mr. Dittmann and will serve as a Class I director.
Messrs. Cooley and Lewis will fill the vacancies created by the resignations of
Messrs. Baddeloo and Putman and will serve as Class III directors. The new
directors will serve in their respective roles until the next annual meeting of
the stockholders of the Company at which such person's class of directors stands
for election, or until their earlier resignation or removal. The Class II
director vacancy created by the resignation of Mr. Roberts will remain vacant
until further action with respect thereto by the Board or the Company's
stockholders. The Board intends to determine on which committees the three new
directors will serve at its first board meeting following the transactions.
There are no related-party transactions that would be required to be disclosed
under Item 404(a) of Regulation S-K of the Securities Act with respect to
Messrs. Biglari, Cooley, or Lewis.
All three newly appointed members of the Board are affiliated with officers and
directors of Biglari Holdings Inc. Upon the effectiveness of their appointment
to the Company's Board, Messrs. Biglari, Cooley, and Lewis will become subject
to Section 16 of the Securities Exchange Act of 1934.
In connection with the change in control of the Company described in Item 5.01
of this Current Report on Form 8-K, Mr. Steven P. Harris was informed on
September 15, 2022 that his services as the Vice President - Chief Financial
Officer of the Company would no longer be required, effective as of
September 30, 2022. In consideration for Mr. Harris's services, the Company will
pay Mr. Harris a severance payment equal to one month of Mr. Harris's salary
compensation for each year of his service to the Company. Mr. Harris has served
as the Company's Vice President - Chief Financial Officer since November 2018.
--12-31
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
On September 13, 2022, the Board adopted an amendment to the Company's Bylaws,
which became effective as of the Closing of the Purchase Agreement, as described
in Items 5.01 and 5.02 of this Current Report on Form 8-K. Specifically,
Article X was amended to establish the inapplicability of the "Controlling
Interest Statues" set forth in the Nevada Revised Statutes Sections 78.378
through 78.3793 to both the Exchange Agreement between the Company and AGEF and
to the Purchase Agreement between AGEF and Biglari, or any of the transactions
contemplated by such agreements. The foregoing description of the amendment to
the Company's Bylaws is a summary only, does not purport to be complete, and is
qualified in its entirety by reference to the complete text of the amendment,
which is filed herewith as Exhibit 3.1, and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
3.1 Amendment to Bylaws of Abraxas Petroleum Corporation, effective
September 13, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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