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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 17, 1995
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K N ENERGY, INC.
(Exact name of registrant as specified in its charter)
KANSAS 1-6446 49-0290000
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number) Identification No.)
370 VAN GORDON STREET
P. O. BOX 281304
LAKEWOOD, CO 80228-8304
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 989-1740
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Item 5. Other Events.
On August 17, 1995, the Board of Directors of K N Energy, Inc. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $5 per share
(the "Common Shares"), of the Company. The dividend is payable on September
15, 1995 (the "Record Date") to the stockholders of record on that date. As of
August 17, 1995, 27,862,604 Common Shares were issued and outstanding. Each
Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Class B Junior Participating Series Preferred
Stock, without par value (the "Preferred Shares"), of the Company, at a price
of $80.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") dated as of August 21, 1995
between the Company and The Bank of New York, as Rights Agent (the "Rights
Agent").
The Rights Plan has not been adopted in response to any pending
takeover threat to the Company. The Rights, however, have certain potential
anti-takeover effects. The Rights would cause substantial dilution to a person
or group attempting to acquire the Company on terms not approved by the Board
of Directors, except pursuant to an offer conditioned on a substantial number
of Rights being acquired. The Rights may be redeemed by the Board of Directors
under certain circumstances as described below, so they should not interfere
with any merger or other business combination approved by the Board of
Directors.
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the outstanding Voting Shares (as
defined in the Rights Agreement) of the Company, or (ii) 10 business days (or
such later date as may be determined by the Board of Directors prior to such
time as any person becomes an Acquiring Person) following the commencement or
announcement of an intention to commence a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of such outstanding Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of
the Rights) (i) the Rights will be evidenced, with respect to the Common Shares
outstanding on September 15, 1995, by the certificates representing such Common
Shares with a copy of the Summary of Rights to Purchase Preferred Shares
included as Exhibit 4 hereto (the "Summary of Rights") attached thereto, (ii)
the Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after September 15, 1995, upon transfer or new
issuance of the Common Shares, will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of September 15, 1995, even without such
notation or a copy of the Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on on the later of September 15, 2005 or the third
anniversary of the Distribution Date (the "Final Expiration Date"), unless the
Final Expiration Date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
If a person or group were to acquire 20% or more of the Voting Shares
of the Company, each Right then outstanding (other than Rights beneficially
owned by the Acquiring Person which would become null and void) would become a
right to buy that number of Common Shares (or under certain circumstances, the
equivalent number of one one-thousandths of a Preferred Share) that at the
time of such acquisition would have a market value of two times the Purchase
Price of the Right.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, proper provision will be made so that each holder of a Right will
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thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the Purchase Price of the Right.
PREFERRED SHARES. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all series of the Company's Class A Preferred Stock and equally with all other
series of the Company's Class B Preferred Stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $10.00 in cash, or (ii) in the aggregate,
1,000 times the dividend declared on the Common Shares. In the event of
liquidation, the holders of the Preferred Shares will be entitled to receive a
preferential liquidation payment equal to the greater of (i) $1,000 per share,
or (ii) in the aggregate, 1,000 times the payment made on the Common Shares.
In the event of any merger, consolidation or other transaction in which Common
Shares are exchanged for or changed into other stock or securities, cash or
other property, each whole Preferred Share will be entitled to receive 1,000
times the amount received per Common Share. Each whole Preferred Share shall
be entitled to 1,000 votes on all matters submitted to a vote of the
stockholders of the Company, and Preferred Shares shall generally vote together
as one class with the Common Stock and any other capital stock on all matters
submitted to a vote of stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
The Rights themselves will be listed on the New York Stock Exchange.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary
adjustments from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case
prior to the Distribution Date.
EXCHANGE OPTION. At any time after the acquisition by a person or
group of affiliated or associated persons of beneficial ownership of 20% or
more of the outstanding Voting Shares of the Company and before the acquisition
by a person or group of 50% or more of the outstanding Voting Shares of the
Company, the Board of Directors may, at its option, issue Common Shares (or
Preferred Shares) in mandatory redemption of, and in exchange for, all or part
of the then outstanding and exercisable Rights (other than Rights owned by such
person or group which would become null and void) at an exchange ratio of one
Common Share (or one one-thousandth of a Preferred Share) for each Right,
subject to adjustment.
REDEMPTION OF RIGHTS. At any time before the first public
announcement that a person or group has become the beneficial owner of 20% or
more of the outstanding Voting Shares, the Board of Directors of the Company
may redeem all but not less than all the then outstanding Rights at a price of
$0.01 per Right (the "Redemption Price"); provided, however, if the beneficial
ownership of such person or group is subsequently reduced below 5% of the
outstanding Voting Shares as a result of transactions not involving the
Company, the Rights will again be redeemable by the Board of Directors at the
Redemption Price. The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
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AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during
which the Rights may be redeemed, except that after the time that a person or
group has become the beneficial owner of 20% or more of the outstanding Voting
Shares, no such amendment may materially and adversely affect the interests of
the holders of the Rights.
The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
form of Certificate of Designation of Class B Junior Participating Series
Preferred Stock, form of Right Certificate, form of the Summary of Rights and
the specimen of the legend to be placed on new Common Share certificates, filed
as exhibits hereto and incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
1. Rights Agreement, dated as of August 21, 1995, between the
Company and The Bank of New York, as Rights Agent, specifying the terms of the
Rights, which includes the form of Certificate of Designation of Class B Junior
Participating Series Preferred Stock as Exhibit A, the form of Right
Certificate as Exhibit B and the form of the Summary of Rights as Exhibit C
(incorporated by reference to Exhibit 1 to the registrant's Registration
Statement on Form 8-A dated August 21, 1995).
2. Form of Certificate of Designation of Class B Junior
Participating Series Preferred Stock (included as Exhibit A to the Rights
Agreement (Exhibit 1 hereto)) setting forth the terms of the Class B Junior
Participating Series Preferred Stock, without par value.
3. Form of Right Certificate (included as Exhibit B to the Rights
Agreement (Exhibit 1 hereto)). Pursuant to the Rights Agreement, printed Right
Certificates will not be delivered until as soon as practicable after the
Distribution Date.
4. Form of Summary of Rights to Purchase Preferred Shares
(included as Exhibit C to Rights Agreement (Exhibit 1 hereto)) which, together
with certificates representing the outstanding Common Shares of the Company,
shall represent the Rights prior to the Distribution Date.
5. Specimen of legend to be placed, pursuant to Section 3(d) of
the Rights Agreement, on all new Common Share certificates issued by the
Company after September 15, 1995 and prior to the Distribution Date upon
transfer, exchange or new issuance (incorporated by reference to Exhibit 5 to
the registrant's Registration Statement on Form 8-A dated August 21, 1995).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
K N ENERGY, INC.
Date: September 15, 1995 By: /s/ William S. Garner, Jr.
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William S. Garner, Jr.
Vice President, General
Counsel and Secretary
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