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As filed with the Securities and Exchange Commission on November 26, 1997
SEC Registration No._333-37797
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
AMENDMENT NO. 1
TO
FORM S-3 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
EVERGREEN RESOURCES, INC.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 84-0834147
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(State of Other Jurisdiction (IRS Employer
of Incorporation) Identification Number)
1000 Writer Square
1512 Larimer Street
Denver, Colorado 80202
(303) 534-0400
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(Address and Telephone Number of Registrant's Principal
Executive Offices and Principal Place of Business)
1000 Writer Square
1512 Larimer Street
Denver, Colorado 80202
(303) 534-0400
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(Name, Address and Telephone Number of Agent for Service)
Copies to:
John B. Wills, Esq. Kevin R. Collins
410 Seventeenth Street, Suite 1940 1000 Writer Square, 1512 Larimer Street
Denver, Colorado 80202 Denver, Colorado 80202
(303) 628-0747 (303) 534-0400 (tel) 303 534-0420 (fax)
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box./ /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<TABLE>
CALCULATION OF REGISTRATION FEE
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Title of Each Amount Proposed Maximum Proposed Maximum Amount of
Class of Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered(1) Price Per Share Price (2) Fee
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<S> <C> <C> <C> <C>
Common Stock 200,000 $18.00 Per $3,600,000 $1,090.91(3)
$0.01 Stated Value Shares Share
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</TABLE>
(1) All securities subject to this Registration Statement are on behalf of
selling shareholders (see "Selling Shareholders").
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 by reference to the last sale reported on the NASDAQ
National Market System on October 10, 1997.
(3) Previously paid.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
PROSPECTUS
EVERGREEN RESOURCES, INC.
200,000 Shares Common Stock
($0.01 Stated Value)
All of the shares of Evergreen Resources, Inc. (the "Company" Common Stock
are being registered on behalf of security holders (the "Selling Shareholders"),
which are offering for sale 200,000 shares of the Company's Common Stock which
are presently outstanding or which underlie existing warrants. The Company will
receive up to $1,380,000 from the sale of such shares by the Selling
Shareholders upon exercise of the warrants (which have an exercise price of
$6.90). The Company will utilize proceeds for general working capital and for
capital expenditures associated with the development of the Company's natural
gas activities in the Raton Basin. The Selling Shareholders are not restricted
in the price or prices at which they may sell their shares and sales of such
shares may depress the market price of the Company's Common Stock. (See
"Selling Shareholders".)
This offering is not being underwritten. The shares will be offered and
sold by the Selling Shareholders from time to time at prices to be determined at
the time of such sales.
It is anticipated that sales of the 200,000 shares of Common Stock being
offered hereby when made, will be made through customary brokerage channels
either through broker-dealers acting as agents or brokers for the Selling
Shareholders, or through broker-dealers acting as principals who may then resell
the shares in the over-the-counter market or otherwise, or at private sales in
the over-the-counter market or otherwise, at negotiated prices related to
prevailing market prices at the time of the sales or by a combination of such
methods of offering. Thus, the period of distribution of such shares may occur
over an extended period of time. The Selling Shareholders will pay or assume
brokerage commissions or discounts incurred in the sale of their shares.
The Company is paying all of the expenses of registering the Common Stock
under the Securities Act of 1933, as amended, estimated to be $10,000 for
filing, printing, legal, accounting and miscellaneous expenses in connection
with the offering.
On November 25, 1997, the closing sale price of the Company's Common Stock
as reported on the NASDAQ National Market System was $14.31.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. (SEE "RISK FACTORS"
BEGINNING ON PAGE 5.)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is November _____, 1997.
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No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with the offer
contained in this Prospectus, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the Company
or the Selling Stockholders. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create an implication that
there has been no change in the affairs of the Company since the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, Room 1024 and at the following
Regional Offices of the Commission: Everett McKinley Dirksen Building, 219 South
Dearborn Street, Chicago, Illinois 60604, Room 1204, and Jacob K. Javits
Building, 75 Park Place, 14th Floor, New York, New York 10007. Copies of such
material also can be obtained at prescribed rates by writing to the Commission,
Public Reference Section, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission also maintains a Web Site that contains reports,
proxy and information statements and other information regarding registrants,
including the Company, that file electronically with the Commission at
http:www.sec.gov. In addition, copies of such documents and other information
are provided to Nasdaq and can be inspected at the Nasdaq offices maintained at
the National Association of Securities Dealers, Inc., 1735 'K' Street,
Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, all of which were previously filed with the
Commission, are hereby incorporated by reference in this Prospectus:
1. The Company's Transition Report on Form 10-K for the nine-month
fiscal period ended December 31, 1996, as amended by Form 10-K/A.
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997, as amended
by Form 10-Q/A for the quarters ended June 30, 1997 and September 30,
1997.
3. The Company's Form 8-K dated August 21, 1996, as amended by Form
8-K/A and Form 8-K/A(2).
All documents filed by the Company subsequent to the date of this
Prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act prior
to the termination of the offering of the shares of Common Stock shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of those documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that such statement is modified or replaced by a statement contained
in this Prospectus or in any other subsequently filed document that also is or
is deemed to be incorporated by reference into this Prospectus. Any such
statement so modified or superseded shall not be deemed, except as so modified
or replaced, to constitute a part of this Prospectus. The Company undertakes to
provide without charge to each person to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, including any
beneficial owner, a copy of any or all of the documents referred to above that
have been or may be incorporated in this Prospectus by reference, other than
exhibits to such documents. Written or oral requests for such copies should be
directed to Evergreen Resources, Inc., 1512 Larimer Street, Suite 1000, Denver,
Colorado, 80202, (303) 534-0400.
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TABLE OF CONTENTS
Page
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Available Information.......................................... 2
Incorporation of Certain Documents by Reference................ 2
Prospectus Summary............................................. 4
Risk Factors................................................... 5
Recent Developments............................................ 10
Selling Shareholders........................................... 14
Plan of Distribution........................................... 14
Experts........................................................ 15
Legal Opinions................................................. 15
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information appearing elsewhere in this
Prospectus.
THE COMPANY
Evergreen Resources, Inc. ("Evergreen" or the "Company"), is a Colorado
corporation organized on January 14, 1981. Evergreen maintains its principal
executive offices at Suite 1000, 1512 Larimer Street, Denver, Colorado 80202,
and its telephone number is (303) 534-0400.
Evergreen is an independent energy company engaged in the exploration,
development and acquisition of oil and gas properties. The Company's current
operations are principally focused on developing and expanding its coalbed
methane project located in the Raton Basin in southern Colorado. Evergreen also
holds exploration licenses onshore in the United Kingdom, a net 2% interest in a
group exploring offshore in the Falkland Islands, and an oil and gas license on
approximately 2.4 million acres in northern Chile.
Evergreen is one of the largest holders of oil and gas leases in the Raton
Basin with approximately 135,000 gross acres. In addition, the Company's daily
gas sales represent approximately 68% of the gas currently sold from the Raton
Basin. Evergreen currently has 78 producing gas wells on its Raton Basin
property, and has drilled an additional 24 wells, 20 of which are expected to be
placed into production by December 31, 1997, four of which are exploratory
and subject to further evaluation. The Company has identified approximately 560
drilling locations on its Raton Basin acreage, of which 136 are presently
included in the Company's proved reserve base at September 30, 1997. These 136
proven locations comprise approximately 20% of the Company's total acreage in
the Raton Basin. Evergreen intends to spend approximately $80 million over the
next three years on the development of the Raton Basin, including drilling
approximately 210 wells and expanding and upgrading its gathering and
compression facilities.
Evergreen Operating Corp., a wholly owned subsidiary, operates
approximately 180 oil and gas wells on behalf of the Company and, on a fee
basis, for others, coordinating drilling activities and arranging for the
production, gathering and sale of the gas and oil from the wells it operates.
THE OFFERING
Securities Offered by Selling Shareholders 200,000 Shares of Common Stock,
$0.01 stated value per share.
Offering Price All or part of the Shares offered
hereby may be sold from time to
time in amounts and on terms to be
determined by the Selling
Shareholders at the time of the
sale.
NASDAQ National Market Symbol EVER
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RISK FACTORS
This Prospectus, including the information incorporated by reference
herein, contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including statements regarding, among other items, (i) the Company's growth
strategies, (ii) anticipated trends in the Company's business and its future
results of operations, (iii) market conditions in the oil and gas industry, (iv)
the ability of the Company to make and integrate acquisitions and (v) the
outcome of litigation and the impact of governmental regulation. These forward-
looking statements are based largely on the Company's expectations and are
subject to a number of risks and uncertainties, many of which are beyond the
Company's control. Actual results could differ materially from these forward-
looking statements as a result of, among other things, a decline in natural gas
production, a decline in natural gas prices, incorrect estimations of required
capital expenditures, increases in the cost of drilling, completion and gas
gathering, an increase in the cost of production and operations, an inability to
meet growth projections, and/or changes in general economic conditions. Actual
results could materially differ and could be adversely affected by the
information set forth below. In light of these risks and uncertainties, there
can be no assurance that actual results will be as projected in the forward-
looking statements.
VOLATILITY OF OIL AND GAS PRICES
The Company's revenues, profitability and future rate of growth are
substantially dependent upon prevailing market prices for natural gas and oil,
which can be extremely volatile and in recent years have been depressed by
excess domestic and imported supplies. In addition to market factors, actions
of state and local agencies, the United States and foreign governments, and
international cartels affect oil and gas prices. All of these factors are
beyond the control of the Company. These external factors and the volatile
nature of the energy markets make it difficult to estimate future prices of
natural gas and oil. There is no assurance that current price levels can be
sustained or that the Company will be able to produce oil or gas on an economic
basis in light of prevailing market prices. Any substantial or extended decline
in the price of natural gas would have a material adverse effect on the
Company's financial condition and results of operations, including reduced cash
flow and borrowing capacity and could reduce both the value and the amount of
the Company's oil and gas reserves.
RESERVE REPLACEMENT RISK
The Company's future success depends upon its ability to find, develop or
acquire additional oil and natural gas reserves in the Raton Basin that are
economically recoverable. The proved reserves of the Company will generally
decline as reserves are depleted, except to the extent that the Company conducts
successful exploration or development activities or acquires properties
containing proved reserves. At September 30, 1997, the Company had proved
undeveloped reserves of approximately 67 Bcfe, which constituted approximately
33% of the Company's total proved reserves at September 30, 1997. The Company's
current development plan includes increasing its reserve base through continued
drilling and development of its existing properties in the Raton Basin. There
can be no assurance, however, that the Company's planned development projects in
the Raton Basin will result in significant additional reserves or that the
Company will have continuing success drilling productive wells at anticipated
finding and development costs.
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PRIOR OPERATING LOSSES
The Company experienced losses in fiscal 1995 and 1996 and through
September 30, 1997, had an accumulated deficit of $6,222,000. The Company had
net income of $675,000 for the nine month period ended December 31, 1996 and had
net income of $2,977,000 for the nine months ended September 30, 1997. Although
the Company expects its results of operations to continue to improve as
additional Raton Basin wells are completed, there are no assurance that this
will occur or that the Company will achieve, or be able to sustain, profitable
operations.
FUTURE CAPITAL REQUIREMENTS
The Company will require additional equity or debt capital, as well as the
anticipated cash flow from operations of its developed properties, to fund the
full development of the Raton Basin. Any development of other properties,
including the Company's United Kingdom properties, is expected to require
substantial additional capital. There is no assurance that any required capital
will be available or that it will be available on terms acceptable to the
Company. Any inability of the Company to fund development of its properties
could cause the Company to lose all or portions of such properties through
failure to comply with minimum lease or license requirements or could require
the Company to farm out or otherwise dispose of or abandon such properties.
There is no assurance that the Company could successfully farm out or dispose of
any such properties.
PENALTY PAYMENTS UNDER THE EL PASO AGREEMENT
In August 1992, Evergreen entered into a series of agreements with El Paso
Field Services Company ("El Paso") concerning the connection of Evergreen's San
Juan Basin wells to El Paso's non-jurisdictional gathering system. Under the
agreements, El Paso paid for construction of a gathering pipeline to a central
point in Evergreen's producing area. Evergreen paid for construction of its own
gathering system to the wells beyond that point, which was sold to Associated
Natural Gas, Inc. in 1993. Evergreen dedicated 90% of its San Juan Basin
production to El Paso's gathering line for a period of 10 years following
completion of the line and agreed to deliver a minimum of 11,000 MMBtu per day
for five years to El Paso's gathering line or pay a shortfall payment of $0.25
per MMBtu. The Company's production obligation began on August 1, 1993, and will
conclude on July 31, 1998. Production from the wells has been substantially
less than 11,000 MMBtu per day and Evergreen has accrued a shortfall obligation
of $2,434,000 as of June 30, 1997 that may grow to in excess of $3.0 million by
the end of the five year period. Evergreen's cumulative delivery shortfall
through September 30, 1997 was approximately 12.1 million MMBtu. In November
1997, Evergreen entered into a binding agreement with a third party which has
agreed to acquire Evergreen's interest in its San Juan Basin properties. In this
agreement, this third party has also agreed to assume all of Evergreen's
liabilities under its agreements with El Paso. El Paso's consent, among other
conditions, are necessary to consummation of this agreement. No assurance can be
given with respect to whether El Paso's consent will be received or other
conditions will be met.
SPECULATIVE NATURE OF OIL AND GAS EXPLORATION
The business of exploring for and, to a lesser extent, developing oil and
gas properties is an inherently speculative activity that involves a high degree
of business and financial risk. Property acquisition decisions generally are
based on various assumptions and subjective judgments that are speculative.
Although available geological and geophysical information can provide
information with respect to a potential oil or gas property, it is impossible to
determine accurately the ultimate production potential, if any, of a particular
property or well. Moreover, the successful completion of an oil or gas well
does not ensure a profit on the Company's investment therein. While the portion
of the Company's Raton Basin property in which the Company is currently
operating appears to present only moderate risk in this regard, the
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remainder of the Raton Basin property, the Company's United Kingdom
properties and any properties in which the Company may invest in the future
are or may be largely untested and therefore subject to more substantial risk
that they will be uneconomic or marginally economic.
OPERATING HAZARDS
Oil and gas operations involve a high degree of risk. Natural hazards,
such as excessive underground pressures, may cause a costly or dangerous
blowout or make further operations on a well financially or physically
impractical. Equipment failures, human errors and other factors can result in
the substantial impairment or destruction of property, environmental damage
and/or human injury. The Company is subject to all the risks inherent in the
exploration for, and development of, oil and gas, including blowouts, fires
and other casualties. Any such event can result in the exposure of the
Company to claims of individuals or governmental agencies or to the loss or
impairment of the value of its properties, or both. The Company maintains
insurance coverage as is customary for entities of a similar size engaged in
similar operations, but losses can occur from uninsurable risks or in amounts
in excess of existing insurance coverage.
UNCERTAINTY OF ESTIMATED RESERVES
This Prospectus contains estimates of reserves and future net revenues
which have been prepared by independent petroleum engineers. However,
petroleum engineering is not an exact science and involves estimates based on
many variable and uncertain factors. Estimates of reserves and future net
revenues prepared by different petroleum engineers may vary substantially
depending, in part, on the assumptions made and may be subject to adjustment
either up or down in the future. The actual amounts of production, revenues,
taxes, development expenditures, operating expenses and quantities of
recoverable oil and gas reserves to be encountered may vary substantially
from the engineers' estimates. The Company's reserve values remain sensitive
to gas prices in the current environment of fluctuating commodities prices.
REGULATION
The oil and gas industry is extensively regulated by federal, state and
local authorities. Legislation and regulation affecting the industry are under
constant review for amendment or expansion, raising the possibility of changes
that may effect, among other things, the pricing or marketing of oil and gas
production. Substantial penalties may be assessed for noncompliance with
various applicable statutes and regulations, and the overall regulatory burden
on the industry increases its cost of doing business and, in turn, decreases its
profitability.
State and local authorities regulate various aspects of oil and gas
drilling and production activities, including the drilling of wells (through
permit and bonding requirements), the spacing of wells, the unitization or
pooling of oil and gas properties, environmental matters, safety standards, the
sharing of markets, production limitations, plugging and abandonment, and
restoration.
ENVIRONMENTAL CONSIDERATIONS
Various federal, state and local laws and regulations covering the
discharge of materials into the environment, or otherwise relating to the
protection of the environment, may affect the operations and costs of the
Company. For example, the Company operates under permits issued by the State of
Colorado to discharge water provided from its coalbed methane wells. Inasmuch
as such laws and regulations are frequently changed, the Company is unable to
predict the ultimate cost of compliance.
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COMPETITION
Major oil companies, independent producers, institutional and individual
investors and various oil and gas income funds are actively seeking to acquire
oil and gas properties throughout the world, as well as the equipment, labor,
and materials required to operate such properties. Many of the Company's
competitors have financial and technological resources vastly exceeding those
available to the Company. Many oil and gas properties are sold in a competitive
bidding process in which the Company, if it is making an independent bid, may
lack technological information or expertise available to other bidders. There
is no assurance that the Company will be successful in acquiring and developing
profitable properties in the face of such competition.
OIL AND GAS LEASES
The Company's right to explore and produce oil and gas from its
properties derives from its oil and gas leases with the owners of the
properties. There are many version of oil and gas leases in use. The
Company has acquired most of its current leases from other companies who
first acquired the leases from the landowners. Oil and gas leases generally
call for annual rental payments and the payment of a percentage royalty on
the oil and gas produced. Courts in many states have interpreted oil and gas
leases to include various implied covenants, including the lessee's implied
obligation to develop the lease diligently, to prevent drainage of oil and
gas by wells on adjacent land, to seek diligently a market for production,
and to operate prudently according to industry standards. Oil and gas leases
with similar language may be interpreted quite differently depending on the
state in which the property is located. Issues decided differently in two
states may not yet have been decided by the courts of a third state, leading
to uncertainty as to the proper interpretation. For instance, royalty
calculations can be substantially different from state to state, depending on
each state's interpretation of typical lease language concerning the costs of
production. The Company believes it has followed industry standards in
interpreting its oil and gas leases in the states where it operates.
However, there can be no assurance that the leases will be free from
litigation concerning the proper interpretation of the lease terms. Adverse
decisions could result in material costs to the Company or the loss of one or
more leases.
TITLE TO PROPERTIES
As is customary in the oil and gas industry, the Company conducts only a
preliminary title examination at the time properties believed to be suitable for
drilling operations are acquired. Prior to the commencement of drilling
operations, a title examination of the drill site tract is conducted. The
Company believes that titles to its leasehold properties are good and defensible
in accordance with standards generally acceptable in the oil and gas industry,
but there is no assurance that the Company could defend title to its undeveloped
properties.
ACCOUNTING RISKS
The Company reports its operations using the full cost method of accounting
for gas and oil properties. Under full cost accounting rules, all productive
and non-productive costs incurred in connection with the exploration for and
development of oil and gas reserves are capitalized. Normal dispositions of oil
and gas properties are accounted for as adjustments of capitalized costs, with
no gain or loss recognized. Under full cost accounting rules, the net
capitalized costs of gas and oil properties may not exceed a "ceiling" limit of
the present value of estimated future net revenues from proved reserves,
discounted at 10%, plus the lower of cost or fair market value of unproved
properties. If the net investment in oil and gas properties exceeds an amount
equal to the sum of (1) the standardized measure of discounted future net cash
flows from proved reserves, and (2) the lower of cost or fair market value of
properties in process of development and unexplored acreage, the excess is
charged to expense as additional depletion. Natural gas prices are often
volatile, varying substantially from quarter to quarter depending on weather
conditions, quantities of gas in storage, and supply variations. Since the
"ceiling test" must be applied quarterly, the Company may be
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forced to write down the value of its oil and gas properties during a quarter
when gas prices are substantially below present levels. Full cost accounting
rules would not allow the Company to increase the value of its oil and gas
properties in a subsequent quarter when gas prices improved.
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RECENT DEVELOPMENTS
FISCAL YEAR
Effective with the period ended December 31, 1996, the Company elected to
begin utilizing a December 31 fiscal year end. Therefore, the period ended
December 31, 1996 represents a nine-month short period as compared to the twelve
month fiscal years ended March 31, 1996, 1995, and 1994.
CHILE
On March 18, 1997 the Government of Chile awarded an oil and gas
exploration contract to Evergreen on two 5,000 square kilometer (1.2 million
acre) blocks in Northern Chile.
Evergreen has 75% working interest in the blocks and will serve as
Operator. Empresa Nacional del Petroleo (ENAP), the State-owned energy company,
holds the remaining 25% working interest. The Chilean government will initially
receive a 10% royalty on production up to 10,000 barrels per day.
Evergreen and ENAP will share the following work commitments
proportionately, stated as Exploration Periods for each block:
Period Term Work Commitment
------ ---- ---------------
1 1 Year Geologic mapping, aeromagnetic and gravity surveys
2 2 Years 200 km seismic
3 2 Years 1 exploratory well
4-9 1 year each 1 exploratory well
Under the exploration contract, Evergreen and ENAP will share
proportionately the work commitments for the project. Evergreen's estimated
financial commitment for years one through three is approximately $1.8 million.
The Company expects to fulfill its commitment through cash flow from operations
and available borrowings under its $30 million credit facility.
UNDERWRITING
On October 28, 1996, the Company completed a public offering of its common
shares, whereby it sold 2,000,000 shares at $5.75 per share. Total proceeds,
net of underwriters' commissions, were approximately $10.3 million and were used
to fund development of the Company's Raton Basin Project.
RATON BASIN
Since December 1991, Evergreen has acquired oil and gas leases covering
over 135,000 gross acres in the Raton Basin, Las Animas County in Southeastern
Colorado. This acreage position will support over 500 wells on 160 acre
spacing. Independent engineering estimates indicate reserve potential of
approximately 1.5 - 2.0 billion cubic feet of gas per well.
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Two exploratory wells have been drilled in the Northern portion of the
Spanish Peaks Unit, and two exploratory wells have been drilled in the central
portion of the Sangre de Cristo Unit. The exploratory wells will test
production levels, provide additional geologic control, and also will fulfill
Unit obligations.
Gas sales began in January 1995 and production has improved as new wells
have been drilled to a present level of approximately 25 million cubic feet
(MMcf) per day gross. Evergreen's net sales are approximately 20 MMcf per day
at present.
The Company enters into contractual obligations that require future
physical delivery to attempt to manage price risk with regard to a portion of
its natural gas production. As of October 31, 1997, the Company had entered
into contracts to sell approximately 21.5 MMcf per day (substantially all of its
current sales) at $2.05 per Mcf for the period November 1997 through March 1998
and approximately 10 MMcf per day (approximately half of its current sales) at
$2.05 per Mcf for the period April 1998 through October 1998. The Company
identifies minimum internal price targets and assuming other market conditions
are deemed favorable, the Company will enter into hedging contracts to manage
price risk.
Colorado Interstate Gas Company ("CIG") plans to construct a new 120 -
mile, 16 inch pipeline from Trinidad to Campo, Colorado. Capacity of this new
pipeline will initially be approximately 100 million cubic feet per day. CIG
expects that this new line will be in service in August of 1998.
The Company has executed an agreement for transportation on this pipeline,
providing for firm-volume commitments. The terms of the agreement will be
finalized in accordance with the "open season" provisions mandated by the
Federal Energy Regulatory Commission.
UNITED KINGDOM
Under a new onshore Licensing regime implemented by the UK Department of
Trade and Industry (DTI), Evergreen has converted its existing onshore
Exploration Licenses to new onshore Licenses, called Petroleum Exploration and
Development Licenses. These new Licenses will provide up to a 30 year term with
optional periodic relinquishment of portions of the licenses, subject to future
development plans. There are no royalties or burdens encumbering the Licenses.
Work commitments on the Licenses have been fulfilled through 1997 as a result of
Evergreen's prior UK activity.
The DTI has approved the Company's request to relinquish 259,461 presently
licensed acres, which were not considered highly prospective for coalbed methane
(CBM) development. The Company retains 371,018 acres, which were high-graded
for CBM and conventional hydrocarbon potential. Evergreen expects that it will
be required to spend $1.2 million over the next three years to maintain these
licenses. Work commitments for acreage retained will include remote sensing
studies, additional seismic studies and the drilling of three wells, one per
year beginning in 1999.
Evergreen is continuing to hold discussions with various funding sources,
including potential industry partners, for the purpose of resuming evaluation
and development of the Licenses.
FALKLAND ISLANDS
Evergreen has a net 2% working interest in a consortium which has recently been
awarded an exploration license for Tranche A in the First Offshore Falkland
Islands Licensing Round. Amerada Hess (Falklands Islands) Limited is Operator
of the consortium, which includes Fina Exploration Atlantic BV, Murphy South
Atlantic Oil Company, Teikoku Oil Co. Ltd., and Argos Evergreen Limited.
11
<PAGE>
Argos Evergreen Limited, a 5% working interest holder in the consortium, is a
joint venture company formed in the Falkland Islands and owned 60% by Argos
Resources Limited and 40% by Evergreen Resources (UK) Limited, the UK subsidiary
of Evergreen Resources Inc.
Argos Resources Limited is a subsidiary of Argos Limited, a Falkland Islands
company which owns and operates a fleet of deep sea fishing vessels in the
Falkland Islands area.
The license covers 626 square miles and lies approximately 150 miles to the
north of the islands in water depths ranging up to 1,575 feet. This area
incorporates part of a major unexplored sedimentary basin which has not yet been
tested by drilling. It therefore represents a rare opportunity to be involved
during the early phase of exploration in an unexplored basin. The Company
expects to spend approximately $1.4 million on this project over the next three
years.
SHAREHOLDER RIGHTS PLAN
On July 7, 1997 the Board of Directors adopted a Shareholder Rights Plan
("Rights Plan"), pursuant to which stock purchase rights will be distributed as
a dividend to its common stockholders at a rate of one Right for each share of
common stock held of record as of July 22, 1997.
The Rights Plan is designed to enhance the Board's ability to prevent an
acquiror from depriving stockholders of the long-term value of their investment
and to protect shareholders against attempts to acquire the Company by means of
unfair or abusive takeover tactics that have been prevalent in many unsolicited
takeover attempts.
This action is not taken in response to any pending or threatened takeover
effort to acquire the Company.
Under the Rights Plan, the rights will become exercisable only if a person
or a group (except for existing 20% shareholders) acquires or commences a tender
offer for 20% or more of the Company's common stock. Until they become
exercisable, the Rights attach to and trade with the Company's common stock.
The Rights will expire July 22, 2007. The Rights may be redeemed by the
continuing members of the Board at $.001 per Right prior to the day after a
person or group has accumulated 20% or more of the Company's common stock.
In the event that a person or group acquires 20% of the Company's common
stock, the rights would then be modified to represent the right to receive for
the exercise price, Company common stock having a value worth twice the exercise
price.
In the event that the Company is involved in a merger or other business
combination at any time after a person or group has acquired 20% or more of the
Company's common stock, the Rights will be modified so as to entitle a holder to
buy a number of shares of common stock of the acquiring entity having a market
value of twice the exercise price of each Right.
All Rights held or acquired by a person or group holding 20% or more of the
Company's shares are void. The Rights are not triggered by continued stock
ownership of the Company's existing 20% shareholders, unless these Shareholders
increase their holdings in the Company above 30%.
Additional details of the Shareholder Rights plan were outlined in a letter
recently mailed to the Company's stockholders.
12
<PAGE>
AMOCO LITIGATION
On June 25, 1997, Evergreen filed an action in the Las Animas County, Colorado
District Court seeking a declaratory judgment against Amoco Production Company
("Amoco") regarding the proposed sale by Amoco of certain property located in
the Raton Basin, Las Animas County. Included in this property was approximately
22,000 gross non-producing acres which is located within the Cottontail Pass
Federal Unit situated near the center of Evergreen's present 135,000 gross acre
position in the Raton Basin. Evergreen, as a working interest owner in the
unit, had a preferential right under the applicable unit operating agreement to
purchase these 22,000 acres for $3,179,000. Evergreen tendered to Amoco notice
of its intention to exercise this preferential right to purchase. Amoco
contended that it did not receive a valid notice of the preferential purchase
rights from Evergreen. In its action, Evergreen sought a declaratory judgment
that Evergreen had properly exercised its preferential right of purchase, and
that Amoco was obligated to sell the properties covered by that right of
purchase to Evergreen. On November 12, 1997, the court granted that Evergreen's
motion for summary judgement and ruled that Evergreen properly exercised its
right of purchase for the subject properties. Amoco has the right to appeal this
ruling.
CONVERSION OF PREFERRED STOCK
Effective November 1, 1997, all outstanding shares of the Company's 8%
Convertible Preferred Stock were converted into 905,660 shares of Common Stock.
13
<PAGE>
SELLING SHAREHOLDERS
All of the securities offered hereby are to be offered for the account of
the security holders set forth below ("Selling Shareholders").
Shares Registered
Pursuant To
Name This Offering (1)
---- -----------------
Paulson Investment Co., Inc. 151,375
Chester L.F. Paulson 15,750
M. Lorraine Maxwell 7,875
Robert O. McDonald 8,155
Robert G. Rader 5,081
Gregory M. Jones 1,967
John E. Adams 1,000
Norman Frager 2,155
Robert M. Jones 1,363
Edward F. Marburger 1,363
E. Robin Landry 1,189
T. Ray Phillips III 967
Donald A. Pape 967
Ernest McCollum 793
-------
TOTAL 200,000
- --------------
(1) Shares of restricted common stock underlying warrants issued by
the Company to Underwriters as compensation.
PLAN OF DISTRIBUTION
The Selling Shareholders are not restricted as to the prices at which they
may sell their shares and sales of such shares at less than the market price may
depress the market price of the Company's Common Stock. Further, the Selling
Shareholders are not restricted as to the number of shares which may be sold at
any one time, and it is possible that a significant number of shares could be
sold at the same time which may also have a depressive effect on the market
price of the Company's Common Stock. However, it is anticipated that the sale
of the Common Stock being offered hereby will be made through customary
brokerage channels either through broker-dealers acting as agents or brokers for
the seller, or through broker-dealers acting as principals, who may then resell
the shares in the over-the-counter market, or a private sale in the over-the-
counter market or otherwise, at negotiated prices related to prevailing market
prices and customary brokerage commissions at the time of the sales, or by a
combination of such methods. Thus, the period for sale of such shares by the
Selling Shareholders may occur over an extended period of time.
There are no contractual arrangements between or among any of the Selling
Shareholders and the Company with regard to the sale of the shares and no
professional underwriter in its capacity as such will be acting for the Selling
Shareholders.
14
<PAGE>
EXPERTS
The financial statements and schedules incorporated by reference in this
Prospectus have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their report
incorporated herein by reference, and are incorporated herein in reliance upon
such report given upon the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of Powerbridge, Inc. and subsidiaries for
the year ended December 31, 1995 incorporated in this prospectus by reference
from the Company's Form 8-K/A dated September 6, 1996, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report (which
expresses an unqualified opinion and includes an explanatory paragraph relating
to substantial doubt about Powerbridge, Inc.'s ability to continue as a going
concern), which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
LEGAL OPINIONS
The legality of the Shares offered hereby will be passed upon for the Company by
John B. Wills, Attorney At Law.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering, all of which are to be born by the
Registrant, are as follows:
SEC Filing Fee $ 1,090.91
Printing Expenses 500.00*
Accounting Fees and Expenses 1,000.00*
Legal Fees and Expenses 6,000.00*
Miscellaneous 1,409.09*
----------
Total $10,000.00*
----------
----------
- -----------------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only charter provision, bylaw, contract, arrangement or statute under
which any Director or Officer of the Registrant is insured or indemnified in any
manner against any liability which he may incur in his capacity as such, is as
follows:
(a) Section 7-109-102, 103, 104, 105, 106, 107, 108, 109 and 110 of
the Colorado Business Corporation Act provides that each corporation shall
have the following powers:
"7-109-102. Authority to Indemnify directors
(1) Except as provided in subsection (4) of this section, a
corporation may indemnify a person made a party to a
proceeding because the person is or was a director against
liability incurred in the proceeding if:
(a) The person conducted himself or herself in good faith;
and
(b) The person reasonably believed:
(I) In the case of conduct in an official capacity
with the corporation, that his or her conduct was
in the corporation's best interests; and
(II) In all other cases, that his or her conduct was at
least not opposed to the corporation's best
interests; and
(c) In the case of any criminal proceeding, the person had
no reasonable cause to believe his or her conduct was
unlawful.
(2) A director's conduct with respect to an employee benefit
plan for a purpose the director reasonably believed to be in
the interests of the participants in or beneficiaries of the
plan is conduct that satisfies the requirement of
subparagraph (II) of paragraph (b) of subsection (1) of this
section. A director's conduct with respect to an employee
benefit plan for a purpose that the director did not
reasonably believe to be in the interests of the
participants in or beneficiaries of the plan shall be deemed
not to satisfy the requirements of paragraph (a) of
subsection (1) of this section.
(3) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or
its equivalent is not, of itself, determinative that the
director did not meet the standard of conduct described in
this section.
<PAGE>
(4) A corporation may not indemnify a director under this
section:
(a) In connection with a proceeding by or in the right of
the corporation in which the director was adjudged
liable to the corporation; or
(b) In connection with any other proceeding charging that
the director derived an improper personal benefit,
whether or not involving action in an official
capacity, in which proceeding the director was adjudged
liable on the basis that he or she derived an improper
personal benefit.
(5) Indemnification permitted under this section in connection
with a proceeding by or in the right of the corporation is
limited to reasonable expenses incurred in connection with
the proceeding.
"7-109-103. Mandatory indemnification of directors
Unless limited by its articles of incorporation, a
corporation shall indemnify a person who was wholly successful,
on the merits or otherwise, in the defense of any proceeding to
which the person was a party because the person is or was a
director, against reasonable expenses incurred by him or her in
connection with the proceeding.
"7-109-104. Advance of expenses to directors
(1) A corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a
proceeding in advance of final disposition of the
proceeding if:
(a) The director furnishes to the corporation a written
affirmation of the director's good faith belief that
he or she has met the standard of conduct described in
section 7-109-102;
(b) The director furnishes to the corporation a written
undertaking, executed personally or on the director's
behalf, to repay the advance if it is ultimately
determined that he or she did not meet the standard of
conduct; and
(c) A determination is made that the facts then known to
those making the determination would not preclude
indemnification under this article.
(2) The undertaking required by paragraph (b) of subsection (1)
of this section shall be an unlimited general obligation of
the director but need not be secured and may be accepted
without reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this
section shall be made in the manner specified in section
7-109-106.
"7-109-105. Court-ordered indemnification of directors
(1) Unless otherwise provided in the articles of incorporation,
a director who is or was a party to a proceeding may apply
for indemnification to the court conducting the proceeding
or to another court of competent jurisdiction. On receipt
of an application, the court, after giving any notice the
court considers necessary, may order indemnification in the
following manner:
(a) If it determines that the director is entitled to
mandatory indemnification under section 7-109-103, the
court shall order indemnification, in which case the
court shall also order the corporation to pay the
director's reasonable expenses incurred to obtain
court-ordered indemnification.
(b) If it determines that the director is fairly and
reasonably entitled to indemnification in view of all
the relevant circumstances, whether or not the director
met the standard of conduct set forth in section
7-109-102(1) or was adjudged liable in the
circumstances described in section 7-109-102(4), the
court may order such indemnification as the court deems
proper; except that the indemnification with respect to
any proceeding in which liability shall have been
adjudged in the circumstances described in section
7-109-102(4) is limited to reasonable expenses incurred
in connection with the proceeding and reasonable
expenses incurred to obtain court-ordered
indemnification.
<PAGE>
"7-109-106. Determination and authorization of indemnification of
directors
(1) A corporation may not indemnify a director under section
7-109-102 unless authorized in the specific case after a
determination has been made that indemnification of the
director is permissible in the circumstances because the
director has met the standard of conduct set forth in
section 7-109-102. A corporation shall not advance expenses
to a director under section 7-109-104 unless authorized in
the specific case after the written affirmation and
undertaking required by section 7-109-104(1)(a) and (1)(b)
are received and the determination required by section
7-109-104(1)(c) has been made.
(2) The determinations required by subsection (1) of this
section shall be made:
(a) By the board of directors by a majority vote of those
present at a meeting at which a quorum is present, and
only those directors not parties to the proceeding
shall be counted in satisfying the quorum; or
(b) If a quorum cannot be obtained, by a majority vote of a
committee of the board of directors designated by the
board of directors, which committee shall consist of
two or more directors not parties to the proceeding;
except that directors who are parties to the proceeding
may participate in the designation of directors for the
committee.
(3) If a quorum cannot be obtained as contemplated in paragraph
(a) of subsection (2) of this section, and a committee
cannot be established under paragraph (b) of subsection (2)
of this section, or, even if a quorum is obtained or a
committee is designated, if a majority of the directors
constituting such quorum or such committee so directs, the
determination required to be made by subsection (1) of this
section shall be made:
(a) By independent legal counsel selected by a vote of the
board of directors or the committee in the manner
specified in paragraph (a) or (b) of subsection (2) of
this section or, if a quorum of the full board cannot
be obtained and a committee cannot be established, by
independent legal counsel selected by a majority vote
of the full board of directors; or
(b) By the shareholders.
(4) Authorization of indemnification and advance of expenses
shall be made in the same manner as the determination that
indemnification or advance of expenses is permissible;
except that, if the determination that indemnification or
advance of expenses is permissible is made by independent
legal counsel, authorization of indemnification and advance
of expenses shall be made by the body that selected such
counsel.
"7-109-107. Indemnification of officers, employees, fiduciaries, and
agents
(1) Unless otherwise provided in the articles of incorporation:
(a) An officer is entitled to mandatory indemnification
under section 7-109-103, and is entitled to apply for
court-ordered indemnification under section 7-109-105,
in each case to the same extent as a director;
(b) A corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent of the
corporation to the same extent as to a director; and
(c) A corporation may also indemnify and advance expenses
to an officer, employee, fiduciary, or agent who is not
a director to a greater extent, if not inconsistent
with public policy, and if provided for by its bylaws,
general or specific action of its board of directors or
shareholders, or contract.
"7-109-108. Insurance
A corporation may purchase and maintain insurance on behalf of a
person who is or was a director, officer, employee, fiduciary, or
agent of the corporation, or who, while a director, officer,
employee, fiduciary, or agent of the corporation, is or was
serving at the request of the corporation as a director, officer,
partner, trustee, employee, fiduciary, or agent of another
domestic or foreign corporation or other person or of an employee
benefit plan, against liability asserted against or
<PAGE>
incurred by the person in that capacity or arising from his or
her status as a director, officer, employee, fiduciary, or
agent, whether or not the corporation would have power to
indemnify the person against the same liability under section
7-109-102, 7-109-103, or 7-109-107. Any such insurance may be
procured from any insurance company designated by the board of
directors, whether such insurance company is formed under the
laws of this state or any other jurisdiction of the United
States or elsewhere, including any insurance company in which
the corporation has an equity or any other interest through
stock ownership or otherwise.
"7-109-109. Limitation of indemnification of directors
(1) A provision treating a corporation's indemnification of, or
advance of expenses to, directors that is contained in
its articles of incorporation or bylaws, in a resolution
of its shareholders or board of directors, or in a
contract, except an insurance policy, or otherwise, is
valid only to the extent the provision is not
inconsistent with sections 7-109-101 to 7-109-108. If
the articles of incorporation limit indemnification or
advance of expenses, indemnification and advance of
expenses are valid only to the extent not inconsistent
with the articles of incorporation.
(2) Sections 7-109-101 to 7-109-108 do not limit a corporation's
power to pay or reimburse expenses incurred by a director
in connection with an appearance as a witness in a
proceeding at a time when he or she has not been made a
named defendant or respondent in the proceeding.
"7-109-110. Notice to shareholders of indemnification of director
If a corporation indemnifies or advances expenses to a director
under this article in connection with a proceeding by or in the
right of the corporation, the corporation shall give written
notice of the indemnification or advance to the shareholders
with or before the notice of the next shareholders' meeting.
If the next shareholder action is taken without a meeting at
the instigation of the board of directors, such notice shall
be given to the shareholders at or before the time the first
shareholders signs a writing consenting to such action.
(b) Articles VII and XIII of Registrant's Articles of Incorporation
provide as follows:
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OTHERS
1. The corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right
of the corporation), by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit, or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduce was unlawful. The
termination of any action, suit, or proceeding by judgment, order,
settlement, or conviction or upon a plea of NOLO CONTENDERE or its
equivalent shall not of itself create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in the
best interests of the corporation and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
2. The corporation shall indemnify any person who was or is a party
or is threatened to be
<PAGE>
made a party to any threatened, pending, or completed action or suit by
or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee, or
agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation; but no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged
to be liable for negligence or misconduct in the performance of his duty
to the corporation unless and only to the extent that the court in which
such action or suit was brought determines upon application that,
despite the adjudication of liability, but in view of all circumstances
of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which such court deems proper.
3. To the extent that a director, officer, employee, or agent of the
corporation has been successful on the merits or otherwise in defense of
any action, suit, or proceeding referred to in this article or in defense
of any claim, issue, or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
4. Any indemnification under paragraph 1 or 2 of this article
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in said
paragraphs 1 or 2 of this article. Such determination shall be made by the
board of directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or, if such a
quorum is not obtainable or even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
by the shareholders.
5. Expenses (including attorneys' fees) incurred in defending a
civil or criminal action, suit, or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit, or
proceeding as authorized in paragraph 4 of this article upon receipt of an
undertaking by or on behalf of the director, officer, employee, or agent to
repay such amount unless it shall ultimately as authorized in this article.
6. The indemnification provided by this article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under the Articles of Incorporation, any bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise, and any procedure
provided for by any of the foregoing, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of heirs, executors, and
administrators of such a person.
7. The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation or who is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provision of this article.
8. A unanimous vote of each class of shares entitled to vote shall
be required to amend this article.
<PAGE>
ARTICLE XIII
LIMITATION OF LIABILITY OF DIRECTORS
TO CORPORATIONS AND SHAREHOLDERS
No director shall be liable to the Corporation or any shareholder for
monetary damages for breach of fiduciary duty as a director, except for any
matter in respect of which such director (a) shall be liable under C.R.S.
Section 7-5-114 or any amendment thereto or successor provision thereto;
(b) shall have breached the director's duty of loyalty to the Corporation
or its shareholders; (c) shall have not acted in good faith; (d) shall have
acted or failed to act in a manner involving intentional misconduct or a
knowing violation of law; or (e) shall have derived an improper personal
benefit. Neither the amendment nor repeal of this Article, nor the
adoption of any provision in the Articles of Incorporation inconsistent
with this Article, shall eliminate or reduce the effect of this Article in
respect of any matter occurring prior to such amendment, repeal or adoption
of any inconsistent provision. This Article shall apply to the full extent
now permitted by Colorado law or as may be permitted in the future by
changes or enactments in Colorado law, including without limitation C.R.S.
Section 7-2-102 and/or C.R.S. Section 7-3-101.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement pursuant to Item 601 of Regulation S-K:
Exhibit No. Title
----------- -----
* 5 Opinion of John B. Wills, Attorney at Law, regarding the legality
of the securities being registered dated October 10, 1997.
* 24.1 Consent of John B. Wills, Attorney at Law, dated October 10,
1997.
24.2 Consent of BDO Seidman, LLP dated November 26, 1997.
24.3 Consent of Deloitte Touche LLP dated on or about November 19,
1997.
-----------------------------
* Previously filed
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant of Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Denver, State of
Colorado on November 21, 1997.
EVERGREEN RESOURCES, INC.
Date: November 21, 1997 By: /s/ Mark S. Sexton
--------------------------------------
Mark S. Sexton, President and
Chief Executive Officer
Date: November 21, 1997 By: /s/ Kevin R. Collins
--------------------------------------
Kevin R. Collins, Vice President,
Treasurer and Chief Financial Officer,
Principal Accounting Officer
SIGNATURES
Date: By:
--------------------------------------
Alain Blanchard, Director
Date: November 21, 1997 By: /s/ Dennis R. Carlton
--------------------------------------
Dennis R. Carlton, Director
Date: November 21, 1997 By: /s/ Larry D. Estridge
--------------------------------------
Larry D. Estridge, Director
Date: By:
--------------------------------------
John J. Ryan III, Director
Date: November 21, 1997 By: /s/ Mark S. Sexton
--------------------------------------
Mark S. Sexton, Director
Date: By:
--------------------------------------
Scott D. Sheffield, Director
Date: November 21, 1997 By: /s/ James S. Williams
--------------------------------------
James S. Williams, Director
<PAGE>
EXHIBIT 24.2
CONSENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Evergreen Resources, Inc.
Denver, Colorado
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated March 18,
1997 relating to the consolidated financial statements of Evergreen Resources,
Inc. and subsidiaries appearing in the Company's Annual Report on Form 10-K
for the nine-month period ended December 31, 1996.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO SEIDMAN, LLP
Denver, Colorado
November 26, 1997
<PAGE>
EXHIBIT 24.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-37797 of Evergreen Resources, Inc. on Form S-3 of
our report on the consolidated financial statements of Powerbridge, Inc. and
subsidiaries dated April 12, 1996 (August 15, 1996 as to Note 9) (which
expresses an unqualified opinion and includes an explanatory paragraph relating
to substantial doubt about Powerbridge, Inc.'s ability to continue as a going
concern), for the year ended December 31, 1995 appearing in Form 8-K/A dated
September 6, 1996 of Evergreen Resources, inc. and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
DELOITTE & TOUCHE LLP
Dallas, Texas
November 19, 1997
