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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4 )*
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ARCH PETROLEUM INC.
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(Name of Issuer)
COMMON STOCK, $.01 par value
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(Title of Class of Securities)
03939B105
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(CUSIP Number)
Kathryn Pietrowiak
CIGNA Corporation, 900 Cottage Grove Road, Bloomfield, CT 06152-2215
(860) 726-8908
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
May 28, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ X ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 27 Pages
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SCHEDULE 13D
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CUSIP NO. 03939B105 Page 2 of 27 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
CIGNA Corporation
06-1059331
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) _
(a) |_|
_
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
00
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
_
2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 3,636,360
EACH ----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 0
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,636,360
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,636,360
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_
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_|
(See Instructions)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.4%
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14 TYPE OF REPORTING PERSON (See Instructions)
HC, CO
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This Amendment No. 4 to the Schedule 13D dated October 31, 1994, as amended by
Amendment No. 1 dated February 16, 1995, Amendment No. 2 dated January 9, 1998,
and Schedule 13G dated April 6, 1998, hereby amends Items 4 through 7 and
Appendix A of such Schedule 13D to the extent and in the manner set forth below.
Unless otherwise indicated, all capitalized terms used but not defined herein
shall have the meaning set forth in such Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
The second paragraph of Item 4 is deleted in its entirety and replaced with the
following paragraph:
Connecticut General and CMP have entered into, and CII has caused
Lincoln to enter into, separate Stockholder Agreements dated as of May 28, 1998
(each, a "Stockholder Agreement" and together, the "Stockholder Agreements"),
substantially identical in form, with Pogo Producing Company, a Delaware
corporation ("Pogo"), which set forth the agreement of Connecticut General, CMP
and Lincoln to vote their respective securities of the Issuer reported in this
Schedule 13D in favor of the approval of a merger transaction through which the
Issuer would become a wholly-owned subsidiary of Pogo. Pursuant to such merger
transaction, holders of the Issuer's Common Stock (including holders of shares
of Common Stock received upon conversion of the Series A Notes and the Series B
Notes at the effective time of the merger) would receive one share of Pogo
common stock for each 10.4 shares of their Common Stock and holders of the
Issuer's Convertible Preferred Stock would receive one share of Pogo common
stock for each 1.04 shares of their Convertible Preferred Stock. CIGNA has been
informed by the Issuer that such merger transaction, which is subject to
approval by the Issuer's shareholders and to customary regulatory approvals, has
been unanimously approved by the boards of directors of both the Issuer and
Pogo.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended and restated in its entirety as follows:
(a) CIGNA, through its ownership and control of the CIGNA Subsidiaries,
may be deemed to be the beneficial owner of the following numbers of shares of
Common Stock, representing the following respective percentages of the
outstanding shares of Common Stock:
<TABLE>
<CAPTION>
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Right to Acquire
Shares Held at Shares within 60
5/28/98 days of 5/28/98 Percentage of Class
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<S> <C> <C> <C>
Connecticut General shares 0 497,834 2.4%
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CMP shares 0 2,343,271 11.2%
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Managed Securities 0 795,255 3.8%
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Aggregate 0 3,636,360 17.4%
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</TABLE>
(For purposes of the foregoing calculations of percentage ownership, the number
of outstanding shares of Common Stock used was 20,958,164, consisting of the
17,321,804 shares outstanding on April 30, 1998, as reported in the Issuer's
report on Form 10-Q for the quarter ended March 31, 1998, increased by the
3,636,360 shares subject to acquisition as shown above.)
Page 3 of 27 Pages
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(b) Pursuant to the Certificate of Designation, the holders of shares
of Convertible Preferred Stock have equal voting rights, on an as converted
basis, with every outstanding share of Common Stock and each holder of
Convertible Preferred Stock is entitled to one vote for each share of Common
Stock, on an as converted basis, into which such Convertible Preferred Stock is
at the time convertible on each matter on which the holders of Common Stock are
entitled to vote. By virtue of its ownership of 39,829.5 shares of Convertible
Preferred Stock, Connecticut General presently has the power to vote or direct
the voting of 398,295 shares of Common Stock. By virtue of its ownership of
187,454.5 shares of Convertible Preferred Stock, CMP presently has the power to
vote or direct the voting of 1,874,545 shares of Common Stock. CII presently has
the power to vote or direct the voting of 636,250 shares of Common Stock by
virtue of the 63,625 shares of Convertible Preferred Stock that constitute
Managed Securities. CIGNA, through its control of the CIGNA Subsidiaries, may be
deemed presently to share the power to vote or direct the voting of 2,909,090
shares of Common Stock.
Assuming conversion of their Series A Notes and Series B Notes,
Connecticut General and CMP would have the power to vote or direct the voting of
497,834 shares and 2,343,271 shares of Common Stock, respectively. Assuming
conversion of the Series A Notes and Series B Notes that constitute Managed
Securities, CII would have the power to vote or direct the voting of 795,255
shares of Common Stock. Accordingly, CIGNA, through its control of the CIGNA
Subsidiaries, could be deemed to share the power to vote or direct the voting of
any or all of the 3,636,360 shares of Common Stock that would then be
beneficially owned by them. Assuming conversion of the shares of Convertible
Preferred Stock and Series A Notes and Series B Notes: Connecticut General and
CMP would have the power to dispose of or direct the disposition of 497,834
shares and 2,343,271 shares of Common Stock, respectively; CII would have the
power to dispose of or direct the disposition of 795,255 shares of Common Stock
as Managed Securities; and CIGNA, through its control of the CIGNA Subsidiaries,
could be deemed to share the power to dispose of or direct the disposition of
any or all of the 3,636,360 shares of Common Stock that would then be
beneficially owned them.
In this subsection (b), references to Connecticut General should be
deemed to include its investment adviser, CIAC, which has voting and dispositive
power with respect to Connecticut General's shares of Common Stock, and
references to CMP or the General Partner should be deemed to include CMP's
investment adviser, CII, which has voting and dispositive power with respect to
CMP's shares of Common Stock.
(c) To the best of CIGNA's knowledge, no transactions in the Common
Stock were effected in the past 60 days by persons named in Item 2 above.
(d) No person other than those named in the response to Item 2 above,
or Lincoln and/or its affiliates with respect to the Managed Securities, will
have the right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, any of the shares of Common Stock referred to
herein.
(e) Not applicable.
Page 4 of 27 Pages
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The following paragraphs are added at the end of Item 6:
The information provided in Item 4 above relating to the Stockholder
Agreements is incorporated herein by reference. Under the Stockholder
Agreements, each of Connecticut General, CMP and Lincoln has agreed (1) not to
solicit or encourage any prospective alternative proposal for acquisition of the
Issuer and (2) not to sell or otherwise dispose of any of its Convertible
Preferred Stock, Notes or Common Stock acquired upon conversion of the
Convertible Preferred Stock or Notes or otherwise. According to its terms, each
Stockholder Agreement will terminate upon the termination of the agreement of
merger between the Issuer and Pogo and may be terminated by Connecticut General,
CMP or Lincoln, as the case may be, if the effective time of the merger fails to
occur by November 30, 1998, or if certain provisions of the agreement of merger
between the Issuer and Pogo, relating to the ratios for exchange of securities
in the merger and cancellation of the Issuer's treasury stock and to the listing
and saleability of Pogo common stock received in the merger, are amended or
waived without the consent of Connecticut General, CMP or Lincoln, as the case
may be.
The Stockholder Agreement between CMP and Pogo and the Stockholder
Agreement between Connecticut General and Pogo are attached hereto as Exhibits 5
and 6, respectively, and are incorporated herein by reference, and any
description of such Stockholder Agreements in the items of this Schedule is
qualified in its entirety by reference to such Agreements.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following is added at the end of Item 7:
Exhibit 5 -- Stockholder Agreement (CIGNA Mezzanine Partners III,
L.P.) dated as of May 28, 1998, between Pogo
Producing Company and CIGNA Mezzanine Partners III,
L.P.
Exhibit 6 -- Stockholder Agreement (Connecticut General Life
Insurance Company) dated as of May 28, 1998, between
Pogo Producing Company and Connecticut General Life
Insurance Company
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: June 5, 1998
CIGNA CORPORATION
By: /s/ Kathryn Pietrowiak
----------------------------------
Kathryn Pietrowiak,
Assistant Corporate Secretary
Page 5 of 27 Pages
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APPENDIX A to Schedule 13D is amended and restated in its entirety as follows:
CIGNA CORPORATION
DIRECTORS AND EXECUTIVE OFFICERS
(ALL DIRECTORS AND EXECUTIVE OFFICERS ARE UNITED STATES CITIZENS)
DIRECTORS
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NAME RESIDENCE OR PRINCIPAL OCCUPATION
BUSINESS ADDRESS
ROBERT P. BAUMAN BTR, PLC Chairman
BTR House
Carlisle Place
London, SWIP IBX
England
ROBERT H. CAMPBELL Sun Company Inc. Chairman and
1801 Market Street Chief Executive Officer
Philadelphia, PA 19103
ALFRED C. DeCRANE, JR. Texaco Inc. Retired Chairman of the
c/o Carol J. Ward Board and Chief Executive
CIGNA Corporation Officer
1650 Market Street
Philadelphia, PA 19192-1550
PETER N. LARSON Brunswick Corporation Chairman, President and
One North Field Court Chief Executive Officer
Lake Forest, IL 60045
MARILYN W. LEWIS American Water Works Chairman
Company, Inc.
2 East Main Street
Strasburg, PA 17579
CHARLES R. SHOEMATE Bestfoods Chairman, President and
International Plaza Chief Executive Officer
Englewood Cliffs, NJ 07632
LOUIS W. SULLIVAN, M.D. Morehouse School of President
Medicine
720 Westview Drive
Atlanta, GA 30314
WILSON H. TAYLOR CIGNA Corporation Chairman of the Board,
One Liberty Place President and
1650 Market Street Cheif Executive Officer
Philadelphia, PA 19192-1550
HAROLD A. WAGNER Air Products and Chemicals, Chairman, President and
Inc. Chief Executive Officer
7201 Hamilton Blvd.
Allentown, PA 18195-1501
CAROL COX WAIT Committee for a Responsible Director, President and
Federal Budget Chief Executive Officer
220-1/2 (E) Street, N.E.
Washington, DC 20002
Page 6 of 27 Pages
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EXECUTIVE OFFICERS
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NAME RESIDENCE OR
BUSINESS ADDRESS PRINCIPAL OCCUPATION
WILSON H. TAYLOR One Liberty Place Chairman, President and
1650 Market Street Chief Executive Officer
Philadelphia, PA 19192-1550
H. EDWARD HANWAY 900 Cottage Grove Road President
Hartford, CT 06152-1216 CIGNA HealthCare
GERALD A. ISOM Two Liberty Place President
1601 Chestnut Street CIGNA Property & Casualty
Philadelphia, PA 19192-2451
THOMAS C. JONES 900 Cottage Grove Road President
Hartford, CT 06152-2211 CIGNA Investment
Management
JOHN K. LEONARD Two Liberty Place President
1601 Chestnut Street CIGNA Group Insurance:
Philadelphia, PA 19192-2240 Life, Accident,
Disability
DONALD M. LEVINSON One Liberty Place Executive Vice President
1650 Market Street Human Resources and
Philadelphia, PA 19192-1550 Services
FRANCINE M. NEWMAN 900 Cottage Grove Road President
Hartford, CT 06152-4026 CIGNA Reinsurance
BYRON D. OLIVER One Commercial Plaza President
280 Trumbull Street CIGNA Retirement &
Hartford, CT 06103 Investment Services
B. KINGSLEY SCHUBERT Two Liberty Place President
1601 Chestnut Street CIGNA International
Philadelphia, PA 19192-2531
JAMES G. STEWART One Liberty Place Executive Vice President
1650 Market Street and Chief Financial
Philadelphia, PA 19192-1550 Officer
THOMAS J. WAGNER One Liberty Place Executive Vice President
1650 Market Street and General Counsel
Philadelphia, PA 19192-1550 CIGNA Legal & Public
Affairs
Page 7 of 27 Pages
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EXHIBIT 5
STOCKHOLDER AGREEMENT
(CIGNA MEZZANINE PARTNERS III, L.P.)
This Stockholder Agreement (this "Agreement") dated as of May 28,
1998 is between Pogo Producing Company, a Delaware corporation ("Pogo") and
CIGNA Mezzanine Partners III, L.P., a limited partnership organized under the
laws of the State Delaware (the "Stockholder").
WHEREAS, Pogo, Alphac, Inc., a Delaware corporation and a wholly
owned subsidiary of Pogo ("Sub"), and Arch Petroleum Inc. ("Arch"), a Delaware
corporation, are entering into an Agreement and Plan of Merger dated as of the
date hereof (as amended from time to time pursuant thereto, the "Merger
Agreement");
WHEREAS, the Stockholder is the beneficial owner of 187,454.5
shares of Exchangeable Convertible Preferred Stock, par value $0.01 per share,
of Arch (the "Arch Preferred Stock"), $128,900 principal amount of the Arch's
9.75% Convertible Subordinated Notes due 2004 (the "Series A Notes"), and
$1,160,100 of Arch's Adjustable Rate Series B Subordinated Notes due 2004 (the
"Series B Notes" and, collectively with the Series A Notes, the "Notes") (such
shares of Preferred Common Stock, together with any shares of capital stock of
Arch acquired by the Stockholder after the date hereof and during the term of
this Agreement, whether by conversion of the Arch Preferred Stock, conversion of
the Notes, or otherwise, being collectively referred to herein as the
"Stockholder Shares"); and
WHEREAS, as a condition to the willingness of Pogo to enter into
the Merger Agreement, and as an inducement to it to do so, the Stockholder
hereby makes the agreements as set forth in this Agreement for the benefit of
Pogo.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained in this
Agreement, the parties hereby agree as follows (terms defined in the Merger
Agreement and used but not defined herein having the meanings assigned to such
terms in the Merger Agreement):
ARTICLE I
COVENANTS OF THE STOCKHOLDER
Section 1.01. AGREEMENT TO VOTE. At any meeting of the
stockholders of Arch held prior to the earlier of (i) the Effective Time of the
Merger and (ii) the termination of the Merger Agreement (such earlier time being
herein referred to as the "Voting Termination Date"), however called, and at
every adjournment or postponement thereof prior to the Voting Termination Date,
or in connection with any written consent of the stockholders of Arch given
prior to the Voting Termination Date, the
Page 8 of 27 Pages
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Stockholder shall vote or cause to be voted the Stockholder Shares in favor of
the approval of the Merger and each of the other transactions contemplated by
the Merger Agreement and in favor of the approval and adoption of the Merger
Agreement, and any actions required in furtherance hereof and thereof. The
Stockholder shall not enter into any agreement or understanding with any person
prior to the Voting Termination Date, directly or indirectly, to vote, grant any
proxy or give instructions with respect to the voting of the Stockholder Shares
in any manner inconsistent with the preceding sentence.
Section 1.02. PROXIES AND VOTING AGREEMENTS. The Stockholder
hereby revokes any and all previous proxies granted with respect to matters set
forth in Section 1.01. Prior to the Voting Termination Date, the Stockholder
shall not, directly or indirectly, except as contemplated hereby, grant any
proxies or powers of attorney with respect to matters set forth in Section 1.01,
deposit any of the Stockholder Shares or enter into a voting agreement with
respect to any of the Stockholder Shares.
Section 1.03. NO SOLICITATION.
(a) From and after the date hereof until the termination of the
Merger Agreement, the Stockholder will not, and will not authorize or permit any
of its officers, directors, employees, general partners, agents, affiliates over
which it has control or other representatives (collectively, "Stockholder
Representatives") to, directly or indirectly, solicit or encourage (including by
way of providing information) any prospective acquiror or the invitation or
submission of any inquiries, proposals or offers or any other efforts or
attempts that constitute, or may reasonably be expected to lead to, an
Acquisition Proposal.
(b) The Stockholder shall immediately cease and cause to be
terminated any existing solicitation, initiation, encouragement, activity,
discussion or negotiation with any parties conducted heretofore by the
Stockholder or any Stockholder Representatives with respect to any Acquisition
Proposal existing on the date hereof.
(c) Prior to the termination of the Merger Agreement, the
Stockholder will promptly notify Pogo of any requests for information made to
the Stockholder or any Stockholder Representative or the receipt of any
Acquisition Proposal made to the Stockholder or any Stockholder Representative,
including the identity of the person or group engaging in such discussions or
negotiations, requesting such information or making such Acquisition Proposal,
and the material terms and conditions of any Acquisition Proposal.
(d) Prior to the termination of the Merger Agreement, the
Stockholder shall not enter into any agreement with any person that provides
for, or in any way facilitates, an Acquisition Proposal.
(e) Notwithstanding anything contained herein to the contrary, the
provisions of this Section 1.03 do not prohibit any Stockholder Representative
who is also an Arch Representative from taking actions permitted by Section 4.2
of the Merger Agreement.
Page 9 of 27 Pages
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Section 1.04. TRANSFER OF STOCKHOLDER SHARES BY THE STOCKHOLDER.
Prior to the record date for the Arch stockholder meeting to vote on the Merger
Agreement, the Stockholder will not sell, transfer, assign, convey or otherwise
dispose of any of the Stockholder Shares; except dividends or distributions to
the stockholders of the Stockholder if such persons agree in writing to be bound
by the terms hereof and provided further, that such transfer does not, in the
opinion of a tax advisor reasonably acceptable to Pogo, violate the terms of
Section 1.05(b) hereof.
Section 1.05. OTHER ACTIONS.
(a) Prior to the termination of this Stockholders Agreement, the
Stockholder shall not take any action that would in any way restrict, limit,
impede or interfere with the performance of its obligations hereunder or the
transactions contemplated hereby or by the Merger Agreement.
(b) The Stockholder agrees that from and after the date of this
Stockholder Agreement but prior to the termination of this Agreement, the
Stockholder will not sell or in any other way reduce such party's risk relative
to any Stockholder Shares, Notes, shares of Pogo Common Stock, or securities
convertible into Pogo Common Stock controlled, owned or held by such Stockholder
prior to the Merger, nor will it sell, or in any other way reduce its risk
relative to any shares of Pogo Common Stock received in exchange for the
Stockholder Shares in the Merger (within the meaning of Section 201.01 of the
SEC's Financial Reporting Release No. 1) or any securities convertible into Pogo
Common Stock, until the earlier of (i) such time as financial results (including
combined sales and net income) covering at least 30 days of Pogo's post-merger
operations have been published, except as permitted by Staff Accounting Bulletin
No. 76 (or any successor thereto) issued by the SEC and (ii) 60 days after the
first full calendar month of Pogo's post-merger operations (the "Restricted
Period").
(c) The Stockholder agrees that, at the Effective Time, it shall
convert the Notes owned by it into such number of shares of Pogo Common Stock as
is equal to (i) the unpaid principal amount of such Notes divided by (ii) $2.75
per share of Arch Common Stock, multiplied by (ii) the Common Exchange Ratio. In
addition, the Stockholder agrees to accept cash in lieu of any fractional
interest that it would otherwise be entitled to pursuant to the foregoing
conversion, calculated in the manner set forth in the Merger Agreement. To the
extent that the agreement set forth in the immediately preceding sentence
requires an amendment to the Notes, the Notes shall be deemed amended as of the
Effective Time to reflect such changes. The conversion price for the Notes will
also be subject, if applicable, as described in Section 11.3 of the Securities
Purchase Agreement, dated as of October 15, 1994, by and between the holder of
such Note and Arch (the "Securities Purchase Agreement") as a result of any
events that occur because of actions taken by Arch or Pogo from and after the
date of this Agreement.
(d) The Stockholder agrees that, at the Effective Time, it shall
convert all of the Stockholder Shares controlled, owned or held by it in
accordance with, and for the consideration described in, the Merger Agreement.
Page 10 of 27 Pages
<PAGE>
ARTICLE II
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS
OF THE STOCKHOLDER
The Stockholder represents, warrants and covenants to Pogo that:
Section 2.01. OWNERSHIP. Except as disclosed on Schedule 2.01, as
of the date hereof, the Stockholder is the beneficial and record owner of the
Stockholder Shares, the Stockholder has the sole right to vote the Stockholder
Shares and there are no restrictions on rights of disposition or other lien,
pledge, security interest, charge or other encumbrance or restriction pertaining
to the Stockholder Shares. None of the Stockholder Shares is subject to any
voting trust or other agreement, arrangement or restriction with respect to the
voting of the Stockholder Shares, and no proxy, power of attorney or other
authorization has been granted with respect to any of the Stockholder Shares.
Section 2.02. AUTHORITY AND NON-CONTRAVENTION. The Stockholder is
a limited partnership duly formed and validly existing under the laws of the
State of Delaware. CIGNA Investments, Inc. ("CII") as authorized agent of Cigna
Mezzanine Partners III, Inc., the general partner of the Stockholder, has all
requisite power and authority to enter into this Agreement on behalf of
Stockholder and perform Stockholder's obligations hereunder. Such actions by the
Stockholder (a) require no action by or in respect of, or filing with, any
Governmental Entity with respect to the Stockholder, other than any required
filings under Section 13 of the Exchange Act or under the HSR Act, and (b) do
not and will not contravene or constitute a default under any provision of
applicable law or regulation or any agreement, judgment, injunction, order,
decree or other instrument binding on the Stockholder or result in the
imposition of any lien, pledge, security interest, charge or other encumbrance
or restriction on any of the Stockholder Shares (other than as provided in this
Agreement with respect to Stockholder Shares).
Section 2.03. BINDING EFFECT. This Agreement has been duly
executed and delivered by CII, as authorized agent of Cigna Mezzanine Partners
III, Inc., the general partner of the Stockholder and is the valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally and by
equitable principles to which the remedies of specific performance and
injunctive and similar forms of relief are subject.
Section 2.04. TOTAL SHARES. The 187,454.5 shares of Arch Preferred
Stock are the only shares of capital stock of Arch owned beneficially or of
record as of the date hereof by the Stockholder, and the Stockholder does not
have any option to purchase or right to subscribe for or otherwise acquire any
securities of Arch other than upon conversion of the Notes and has no other
interest in or voting rights with respect to any other securities of Arch.
Section 2.05. FINDER'S FEES. No investment banker, broker or
finder is entitled to a commission or fee from Arch, Pogo or Sub in respect of
this Agreement based upon any arrangement or agreement made by or on behalf of
the Stockholder.
Page 11 of 27 Pages
<PAGE>
Section 2.06. REASONABLE EFFORTS. Prior to the Voting Termination
Date, the Stockholder shall use reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with Pogo in doing, all things necessary, proper or advisable to consummate and
make effective the Merger and the other transactions contemplated by the Merger
Agreement and this Agreement.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF POGO
Pogo represents, warrants and covenants to the Stockholder that:
Section 3.01. CORPORATE POWER AND AUTHORITY. Pogo has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
Pogo of this Agreement and the consummation by Pogo of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Pogo.
Section 3.02. BINDING EFFECT. This Agreement has been duly
executed and delivered by Pogo and is a valid and binding agreement of Pogo,
enforceable against Pogo in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights generally and by equitable principles to which the remedies
of specific performance and injunctive and similar forms of relief are subject.
Section 3.03. COOPERATION. Subject to Section 5.16 of the Merger
Agreement and the rules and requirements of applicable securities laws, Pogo
shall use reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the Stockholder in
doing, all things necessary, proper or advisable to allow the Stockholder to
publicly sell shares of Pogo Common Stock received in the Merger after the
Restricted Period without any unreasonable delay or restrictions.
ARTICLE IV
MISCELLANEOUS
Section 4.01. EXPENSES. Each party hereto shall pay its own
expenses incident to preparing for entering into and carrying out this Agreement
and the consummation of the transactions contemplated hereby.
Section 4.02. FURTHER ASSURANCES. From time to time, at the
request of the other party, each party shall execute and deliver or cause to be
executed and delivered such additional documents and instruments and take all
such further action as may be necessary or reasonably desirable to consummate
the transactions contemplated by this Agreement.
Page 12 of 27 Pages
<PAGE>
Section 4.03. SPECIFIC PERFORMANCE. (a) The Stockholder agrees
that Pogo would be irreparably damaged if for any reason the Stockholder fails
to perform any of the Stockholder's obligations under this Agreement, and that
Pogo would not have an adequate remedy at law for money damages in such event.
Accordingly, Pogo shall be entitled to seek specific performance and injunctive
and other equitable relief to enforce the performance of this agreement by the
Stockholder. This provision is without prejudice to any other rights that Pogo
may have against the Stockholder for any failure to perform its obligations
under this Agreement; (b) Pogo agrees that the Stockholder would be irreparably
damaged if for any reason Pogo fails to perform any of Pogo's obligations under
this Agreement, and that the Stockholder would not have an adequate remedy at
law for money damages in such event. Accordingly, the Stockholder shall be
entitled to seek specific performance and injunctive and other equitable relief
to enforce the performance of this agreement by Pogo. This provision is without
prejudice to any other rights that the Stockholder may have against Pogo for any
failure to perform its obligations under this Agreement.
Section 4.04. NOTICES. Any notice or communication required or
permitted hereunder shall be in writing and either delivered personally,
telegraphed or telecopied or sent by certified or registered mail, postage
prepaid, and shall be deemed to be given, dated and received when so delivered
personally, telegraphed or telecopied or, if mailed, five business days after
the date of mailing to the following address or telecopy number, or to such
other address or addresses as such person may subsequently designate by notice
given hereunder:
(a) if to Pogo or Sub, to:
Pogo Producing Company
5 Greenway Plaza, Suite 2700
Houston, Texas 77046
Attention: Gerald A. Morton
Facsimile: 713-297-4970
with a copy to:
Robert Stilwell
Baker & Botts, L.L.P.
3000 One Shell Plaza
Houston, Texas 77002
Facsimile: 713-229-1522
(b) if to Stockholder, to:
Cigna Mezzanine Partners III, L.P.
c/o CIGNA Investments, Inc.
900 Cottage Grove Road, S-307
Hartford, CT 06152-2307
Attention: Thomas P. Shea, Private Securities Division (S-307)
Facsimile: 860-726-7203
Page 13 of 27 Pages
<PAGE>
with an additional copy to:
William M. Duncan
CIGNA Corporation
900 Cottage Grove Road, S-215
Hartford, CT 06152-2215
Facsimile: 860-726-8885
Section 4.05. INTERPRETATION. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the word "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." Unless the context otherwise requires, "or" is
disjunctive but not necessarily exclusive, and words in the singular include the
plural and in the plural include the singular. The term "person" is to be
interpreted broadly to include any individual, corporation, partnership, trust,
limited liability company, government or other entity and any group (as used
with respect to Section 13(d) of the Exchange Act).
Section 4.06. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when a counterpart has been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
Section 4.07. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (b) is not intended to confer upon any
person other than the parties hereto, any rights or remedies hereunder.
Section 4.08. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
Section 4.09. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) except to the
stockholders of the Stockholder as permitted herein without the prior written
consent of the other party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
Section 4.10. AMENDMENTS; TERMINATION. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. This Agreement
shall terminate upon the termination of the Merger Agreement in accordance
with the terms thereof. This Agreement may be terminated by Stockholder if (i)
the
Page 14 of 27 Pages
<PAGE>
Effective Time fails to occur by November 30, 1998 (provided that the right to
terminate this Agreement under this clause (i) shall not be available to
Stockholder if the failure by Stockholder to fulfill any covenant or agreement
under this Agreement has been the cause of or resulted in the failure of the
Merger to occur on or before such date; provided, further, that if the failure
of the Effective Time to have occurred is attributable to any court of competent
jurisdiction, or some other governmental body or regulatory authority having
issued an order, decree or ruling or taken any other action temporarily
restraining, enjoining or otherwise prohibiting the Merger, then the
Stockholder's right to terminate this Agreement under this clause (i) shall not
be exercisable until the earlier of (x) one day after such order, decree or
ruling has been dissolved or (y) February 28, 1999); or (ii) sections 2.1(b),
2.1(c), 2.1(d), 2.3(a), 5.6, 5.18 or 6.1(b) of the Merger Agreement are amended
or waived without the consent of Stockholder.
Section 4.11. CERTAIN EVENTS. The Stockholder agrees that this
Agreement and the obligations hereunder shall attach to the Stockholder Shares
beneficially owned by such Stockholder and shall be binding upon any person to
which legal or beneficial ownership of such shares shall pass, whether by
operation of law or otherwise.
Section 4.12. SEVERABILITY. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision, and this Agreement will be reformed,
construed and enforced as if such invalid, illegal or unenforceable provision or
portion of any provision had never been contained herein. The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provision with a valid provision the effects of which come as
close as possible to those of such invalid, illegal or unenforceable provision.
Section 4.13. ATTORNEYS' FEES. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which such party may be
entitled.
[The Remainder of This Page Has Been Intentionally Left Blank]
Page 15 of 27 Pages
<PAGE>
IN WITNESS WHEREOF, Pogo and the Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
CIGNA MEZZANINE PARTNERS III, L.P.
CIGNA MEZZANINE PARTNERS III, INC.,
GENERAL PARTNER
By: CIGNA Investments, Inc.,
as authorized agent
By /s/ Thomas P. Shea
-------------------------------------
Name Thomas P. Shea
Title Vice President
POGO PRODUCING COMPANY
By /s/ Gerald A. Morton
-------------------------------------
Gerald A. Morton
Vice President-Law
and Corporate Secretary
Page 16 of 27 Pages
<PAGE>
SCHEDULE 2.01
1. None
Page 17 of 27 Pages
<PAGE>
EXHIBIT 6
STOCKHOLDER AGREEMENT
(CONNECTICUT GENERAL LIFE INSURANCE COMPANY)
This Stockholder Agreement (this "Agreement") dated as of May 28,
1998 is between Pogo Producing Company, a Delaware corporation ("Pogo") and
Connecticut General Life Insurance Company, a life insurance company organized
under the laws of the State of Connecticut (the "Stockholder").
WHEREAS, Pogo, Alphac, Inc., a Delaware corporation and a wholly
owned subsidiary of Pogo ("Sub"), and Arch Petroleum Inc. ("Arch"), a Delaware
corporation, are entering into an Agreement and Plan of Merger dated as of the
date hereof (as amended from time to time pursuant thereto, the "Merger
Agreement");
WHEREAS, the Stockholder is the beneficial owner of 39,829.5
shares of Exchangeable Convertible Preferred Stock, par value $0.01 per share,
of Arch (the "Arch Preferred Stock"), $27,373 principal amount of the Arch's
9.75% Convertible Subordinated Notes due 2004 (the "Series A Notes"), and
$246,361 of Arch's Adjustable Rate Series B Subordinated Notes due 2004 (the
"Series B Notes" and, collectively with the Series A Notes, the "Notes") (such
shares of Preferred Common Stock, together with any shares of capital stock of
Arch acquired by the Stockholder after the date hereof and during the term of
this Agreement, whether by conversion of the Arch Preferred Stock, conversion of
the Notes, or otherwise, being collectively referred to herein as the
"Stockholder Shares"); and
WHEREAS, as a condition to the willingness of Pogo to enter into
the Merger Agreement, and as an inducement to it to do so, the Stockholder
hereby makes the agreements as set forth in this Agreement for the benefit of
Pogo.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained in this
Agreement, the parties hereby agree as follows (terms defined in the Merger
Agreement and used but not defined herein having the meanings assigned to such
terms in the Merger Agreement):
ARTICLE I
COVENANTS OF THE STOCKHOLDER
Section 1.01. AGREEMENT TO VOTE. At any meeting of the
stockholders of Arch held prior to the earlier of (i) the Effective Time of the
Merger and (ii) the termination of the Merger Agreement (such earlier time being
herein referred to as the "Voting Termination Date"), however called, and at
every adjournment or postponement thereof prior to the Voting Termination Date,
or in connection
Page 18 of 27 Pages
<PAGE>
with any written consent of the stockholders of Arch given prior to the Voting
Termination Date, the Stockholder shall vote or cause to be voted the
Stockholder Shares in favor of the approval of the Merger and each of the other
transactions contemplated by the Merger Agreement and in favor of the approval
and adoption of the Merger Agreement, and any actions required in furtherance
hereof and thereof. The Stockholder shall not enter into any agreement or
understanding with any person prior to the Voting Termination Date, directly or
indirectly, to vote, grant any proxy or give instructions with respect to the
voting of the Stockholder Shares in any manner inconsistent with the preceding
sentence.
Section 1.02. PROXIES AND VOTING AGREEMENTS. The Stockholder
hereby revokes any and all previous proxies granted with respect to matters set
forth in Section 1.01. Prior to the Voting Termination Date, the Stockholder
shall not, directly or indirectly, except as contemplated hereby, grant any
proxies or powers of attorney with respect to matters set forth in Section 1.01,
deposit any of the Stockholder Shares or enter into a voting agreement with
respect to any of the Stockholder Shares.
Section 1.03. NO SOLICITATION.
(a) From and after the date hereof until the termination of the
Merger Agreement, the Stockholder will not, and will not authorize or permit any
of its officers, directors, employees, general partners, agents, affiliates over
which it has control or other representatives (collectively, "Stockholder
Representatives") to, directly or indirectly, solicit or encourage (including by
way of providing information) any prospective acquiror or the invitation or
submission of any inquiries, proposals or offers or any other efforts or
attempts that constitute, or may reasonably be expected to lead to, an
Acquisition Proposal.
(b) The Stockholder shall immediately cease and cause to be
terminated any existing solicitation, initiation, encouragement, activity,
discussion or negotiation with any parties conducted heretofore by the
Stockholder or any Stockholder Representatives with respect to any Acquisition
Proposal existing on the date hereof.
(c) Prior to the termination of the Merger Agreement, the
Stockholder will promptly notify Pogo of any requests for information made to
the Stockholder or any Stockholder Representative or the receipt of any
Acquisition Proposal made to the Stockholder or any Stockholder Representative,
including the identity of the person or group engaging in such discussions or
negotiations, requesting such information or making such Acquisition Proposal,
and the material terms and conditions of any Acquisition Proposal.
(d) Prior to the termination of the Merger Agreement, the
Stockholder shall not enter into any agreement with any person that provides
for, or in any way facilitates, an Acquisition Proposal.
(e) Notwithstanding anything contained herein to the contrary, the
provisions of this Section 1.03 do not prohibit any Stockholder Representative
who is also an Arch Representative from taking actions permitted by Section 4.2
of the Merger Agreement.
Page 19 of 27 Pages
<PAGE>
Section 1.04. TRANSFER OF STOCKHOLDER SHARES BY THE STOCKHOLDER.
Prior to the record date for the Arch stockholder meeting to vote on the Merger
Agreement, the Stockholder will not sell, transfer, assign, convey or otherwise
dispose of any of the Stockholder Shares; except dividends or distributions to
the stockholders of the Stockholder if such persons agree in writing to be bound
by the terms hereof and provided further, that such transfer does not, in the
opinion of a tax advisor reasonably acceptable to Pogo, violate the terms of
Section 1.05(b) hereof.
Section 1.05. OTHER ACTIONS.
(a) Prior to the termination of this Stockholders Agreement, the
Stockholder shall not take any action that would in any way restrict, limit,
impede or interfere with the performance of its obligations hereunder or the
transactions contemplated hereby or by the Merger Agreement.
(b) The Stockholder agrees that from and after the date of this
Stockholder Agreement but prior to the termination of this Agreement, the
Stockholder will not sell or in any other way reduce such party's risk relative
to any Stockholder Shares, Notes, shares of Pogo Common Stock, or securities
convertible into Pogo Common Stock controlled, owned or held by such Stockholder
prior to the Merger, nor will it sell, or in any other way reduce its risk
relative to any shares of Pogo Common Stock received in exchange for the
Stockholder Shares in the Merger (within the meaning of Section 201.01 of the
SEC's Financial Reporting Release No. 1) or any securities convertible into Pogo
Common Stock, until the earlier of (i) such time as financial results (including
combined sales and net income) covering at least 30 days of Pogo's post-merger
operations have been published, except as permitted by Staff Accounting Bulletin
No. 76 (or any successor thereto) issued by the SEC and (ii) 60 days after the
first full calendar month of Pogo's post-merger operations (the "Restricted
Period"); provided, however, that the provisions of this Section 1.05(b) shall
not apply with respect to Stockholder Shares and shares of Pogo Common Stock
held in separate accounts of Stockholder for which the management of such
securities is performed by outside portfolio managers not affiliated with
Stockholder.
(c) The Stockholder agrees that, at the Effective Time, it shall
convert the Notes owned by it into such number of shares of Pogo Common Stock as
is equal to (i) the unpaid principal amount of such Notes divided by (ii) $2.75
per share of Arch Common Stock, multiplied by (ii) the Common Exchange Ratio. In
addition, the Stockholder agrees to accept cash in lieu of any fractional
interest that it would otherwise be entitled to pursuant to the foregoing
conversion, calculated in the manner set forth in the Merger Agreement. To the
extent that the agreement set forth in the immediately preceding sentence
requires an amendment to the Notes, the Notes shall be deemed amended as of the
Effective Time to reflect such changes. The conversion price for the Notes will
also be subject, if applicable, as described in Section 11.3 of the Securities
Purchase Agreement, dated as of October 15, 1994, by and between the holder of
such Note and Arch (the "Securities Purchase Agreement") as a result of any
events that occur because of actions taken by Arch or Pogo from and after the
date of this Agreement.
(d) The Stockholder agrees that, at the Effective Time, it shall
convert all of the Stockholder Shares controlled, owned or held by it in
accordance with, and for the consideration described in, the Merger Agreement.
Page 20 of 27 Pages
<PAGE>
ARTICLE II
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS
OF THE STOCKHOLDER
The Stockholder represents, warrants and covenants to Pogo that:
Section 2.01. OWNERSHIP. Except as disclosed on Schedule 2.01, as
of the date hereof, the Stockholder is the beneficial and record owner of the
Stockholder Shares, the Stockholder has the sole right to vote the Stockholder
Shares and there are no restrictions on rights of disposition or other lien,
pledge, security interest, charge or other encumbrance or restriction pertaining
to the Stockholder Shares. None of the Stockholder Shares is subject to any
voting trust or other agreement, arrangement or restriction with respect to the
voting of the Stockholder Shares, and no proxy, power of attorney or other
authorization has been granted with respect to any of the Stockholder Shares.
Section 2.02. AUTHORITY AND NON-CONTRAVENTION. The Stockholder is
a life insurance company duly organized and validly existing under the laws of
the State of Connecticut. CIGNA Investments, Inc. ("CII") as authorized agent on
behalf of the Stockholder has all requisite power and authority to enter into
this Agreement on behalf of Stockholder and perform Stockholder's obligations
hereunder. Such actions by the Stockholder (a) require no action by or in
respect of, or filing with, any Governmental Entity with respect to the
Stockholder, other than any required filings under Section 13 of the Exchange
Act or under the HSR Act, and (b) do not and will not contravene or constitute a
default under any provision of applicable law or regulation or any agreement,
judgment, injunction, order, decree or other instrument binding on the
Stockholder or result in the imposition of any lien, pledge, security interest,
charge or other encumbrance or restriction on any of the Stockholder Shares
(other than as provided in this Agreement with respect to Stockholder Shares).
Section 2.03. BINDING EFFECT. This Agreement has been duly
executed and delivered by CII, as authorized agent on behalf of the Stockholder
and is the valid and binding agreement of the Stockholder, enforceable against
the Stockholder in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and by equitable principles to which the remedies of
specific performance and injunctive and similar forms of relief are subject.
Section 2.04. TOTAL SHARES. The 39,829.5 shares of Arch Preferred
Stock are the only shares of capital stock of Arch owned beneficially or of
record as of the date hereof by the Stockholder, and the Stockholder does not
have any option to purchase or right to subscribe for or otherwise acquire any
securities of Arch other than upon conversion of the Notes and has no other
interest in or voting rights with respect to any other securities of Arch.
Section 2.05. FINDER'S FEES. No investment banker, broker or
finder is entitled to a commission or fee from Arch, Pogo or Sub in respect of
this Agreement based upon any arrangement or agreement made by or on behalf of
the Stockholder.
Page 21 of 27 Pages
<PAGE>
Section 2.06. REASONABLE EFFORTS. Prior to the Voting Termination
Date, the Stockholder shall use reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with Pogo in doing, all things necessary, proper or advisable to consummate and
make effective the Merger and the other transactions contemplated by the Merger
Agreement and this Agreement.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF POGO
Pogo represents, warrants and covenants to the Stockholder that:
Section 3.01. CORPORATE POWER AND AUTHORITY. Pogo has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
Pogo of this Agreement and the consummation by Pogo of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Pogo.
Section 3.02. BINDING EFFECT. This Agreement has been duly
executed and delivered by Pogo and is a valid and binding agreement of Pogo,
enforceable against Pogo in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights generally and by equitable principles to which the remedies
of specific performance and injunctive and similar forms of relief are subject.
Section 3.03. COOPERATION. Subject to Section 5.16 of the Merger
Agreement and the rules and requirements of applicable securities laws, Pogo
shall use reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the Stockholder in
doing, all things necessary, proper or advisable to allow the Stockholder to
publicly sell shares of Pogo Common Stock received in the Merger after the
Restricted Period without any unreasonable delay or restrictions.
ARTICLE IV
MISCELLANEOUS
Section 4.01. EXPENSES. Each party hereto shall pay its own
expenses incident to preparing for entering into and carrying out this Agreement
and the consummation of the transactions contemplated hereby.
Section 4.02. FURTHER ASSURANCES. From time to time, at the
request of the other party, each party shall execute and deliver or cause to be
executed and delivered such additional documents and instruments and take all
such further action as may be necessary or reasonably desirable to consummate
the transactions contemplated by this Agreement.
Page 22 of 27 Pages
<PAGE>
Section 4.03. SPECIFIC PERFORMANCE. (a) The Stockholder agrees
that Pogo would be irreparably damaged if for any reason the Stockholder fails
to perform any of the Stockholder's obligations under this Agreement, and that
Pogo would not have an adequate remedy at law for money damages in such event.
Accordingly, Pogo shall be entitled to seek specific performance and injunctive
and other equitable relief to enforce the performance of this agreement by the
Stockholder. This provision is without prejudice to any other rights that Pogo
may have against the Stockholder for any failure to perform its obligations
under this Agreement; (b) Pogo agrees that the Stockholder would be irreparably
damaged if for any reason Pogo fails to perform any of Pogo's obligations under
this Agreement, and that the Stockholder would not have an adequate remedy at
law for money damages in such event. Accordingly, the Stockholder shall be
entitled to seek specific performance and injunctive and other equitable relief
to enforce the performance of this agreement by Pogo. This provision is without
prejudice to any other rights that the Stockholder may have against Pogo for any
failure to perform its obligations under this Agreement.
Section 4.04. NOTICES. Any notice or communication required or
permitted hereunder shall be in writing and either delivered personally,
telegraphed or telecopied or sent by certified or registered mail, postage
prepaid, and shall be deemed to be given, dated and received when so delivered
personally, telegraphed or telecopied or, if mailed, five business days after
the date of mailing to the following address or telecopy number, or to such
other address or addresses as such person may subsequently designate by notice
given hereunder:
(a) if to Pogo or Sub, to:
Pogo Producing Company
5 Greenway Plaza, Suite 2700
Houston, Texas 77046
Attention: Gerald A. Morton
Facsimile: 713-297-4970
with a copy to:
Robert Stilwell
Baker & Botts, L.L.P.
3000 One Shell Plaza
Houston, Texas 77002
Facsimile: 713-229-1522
(b) if to Stockholder, to:
Connecticut General Life Insurance Company
c/o CIGNA Investments, Inc.
900 Cottage Grove Road, S-307
Hartford, CT 06152-2307
Attention: Thomas P. Shea, Private Securities Division (S-307)
Facsimile: 860-726-7203
Page 23 of 27 Pages
<PAGE>
with an additional copy to:
William M. Duncan
CIGNA Corporation
900 Cottage Grove Road, S-215
Hartford, CT 06152-2215
Facsimile: 860-726-8885
Section 4.05. INTERPRETATION. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the word "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." Unless the context otherwise requires, "or" is
disjunctive but not necessarily exclusive, and words in the singular include the
plural and in the plural include the singular. The term "person" is to be
interpreted broadly to include any individual, corporation, partnership, trust,
limited liability company, government or other entity and any group (as used
with respect to Section 13(d) of the Exchange Act).
Section 4.06. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when a counterpart has been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
Section 4.07. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (b) is not intended to confer upon any
person other than the parties hereto, any rights or remedies hereunder.
Section 4.08. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
Section 4.09. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) except to the
stockholders of the Stockholder as permitted herein without the prior written
consent of the other party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
Section 4.10. AMENDMENTS; TERMINATION. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. This Agreement
shall terminate upon the termination of the Merger Agreement in accordance with
the terms thereof. This Agreement may be terminated by Stockholder if (i) the
Page 24 of 27 Pages
<PAGE>
Effective Time fails to occur by November 30, 1998 (provided that the right to
terminate this Agreement under this clause (i) shall not be available to
Stockholder if the failure by Stockholder to fulfill any covenant or agreement
under this Agreement has been the cause of or resulted in the failure of the
Merger to occur on or before such date; provided, further, that if the failure
of the Effective Time to have occurred is attributable to any court of competent
jurisdiction, or some other governmental body or regulatory authority having
issued an order, decree or ruling or taken any other action temporarily
restraining, enjoining or otherwise prohibiting the Merger, then the
Stockholder's right to terminate this Agreement under this clause (i) shall not
be exercisable until the earlier of (x) one day after such order, decree or
ruling has been dissolved or (y) February 28, 1999); or (ii) sections 2.1(b),
2.1(c), 2.1(d), 2.3(a), 5.6, 5.18 or 6.1(b) of the Merger Agreement are amended
or waived without the consent of Stockholder.
Section 4.11. CERTAIN EVENTS. The Stockholder agrees that this
Agreement and the obligations hereunder shall attach to the Stockholder Shares
beneficially owned by such Stockholder and shall be binding upon any person to
which legal or beneficial ownership of such shares shall pass, whether by
operation of law or otherwise.
Section 4.12. SEVERABILITY. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision, and this Agreement will be reformed,
construed and enforced as if such invalid, illegal or unenforceable provision or
portion of any provision had never been contained herein. The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provision with a valid provision the effects of which come as
close as possible to those of such invalid, illegal or unenforceable provision.
Section 4.13. ATTORNEYS' FEES. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which such party may be
entitled.
[The Remainder of This Page Has Been Intentionally Left Blank]
Page 25 of 27 Pages
<PAGE>
IN WITNESS WHEREOF, Pogo and the Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA Investments, Inc.,
its authorized agent
By /s/ Thomas P. Shea
-------------------------------
Name Thomas P. Shea
Title Vice President
POGO PRODUCING COMPANY
By /s/ Gerald A. Morton
-------------------------------
Gerald A. Morton
Vice President-Law
and Corporate Secretary
Page 26 of 27 Pages
<PAGE>
SCHEDULE 2.01
1. None
Page 27 of 27 Pages
