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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):
May 2, 1995
PLAINS PETROLEUM COMPANY
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(Exact name of Registrant as specified in its charter)
Delaware 1-8975 84-0928792
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
12596 West Bayaud
P. O. Box 281306
Lakewood, Colorado 80228
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(303) 969-9325
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On May 2, 1995 Barrett Resources Corporation ("Barrett"), Vanilla
Corporation, a wholly-owned subsidiary of Barrett ("Sub"), and the Registrant
executed a definitive merger agreement pursuant to which Sub will be merged
with and into the Registrant. The terms of the merger agreement provide that
each outstanding share of the Registrant's common stock will be converted
into the right to receive 1.3 shares of Barrett common stock.
The merger will take the form of a tax-free exchange and will be
accounted for as a pooling of interests. The merger has been approved by the
Boards of Directors of Barrett, Sub and the Registrant and is subject to
approval by their respective stockholders as well as other customary conditions
and approvals. At the conclusion of the merger, Barrett will expand its Board
of Directors to include four members of the Registrant's Board.
The Agreement and Plan of Merger dated as of May 2, 1995 among
Barrett, Sub and the Registrant, attached hereto as Exhibit 2.1, the Second
Amendment to Rights Agreement, attached hereto as Exhibit 4.1, and the press
release dated May 3, 1995, attached hereto as Exhibit 99.1, are hereby
incorporated herein by reference.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated May 2, 1995 among Barrett
Resources Corporation, Vanilla Corporation and the
Registrant
4.1 Second Amendment to Rights Agreement.
99.1 Press Release dated May 3, 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.
PLAINS PETROLEUM COMPANY
Date: May 3, 1995 By: /s/ James A. Miller
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James A. Miller
Chairman and Chief
Executive Officer
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EXHIBIT INDEX
No. Exhibit
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2.1 Agreement and Plan of Merger dated as
of May 2, 1995 among Barrett Resources
Corporation, Vanilla Corporation and
the Registrant
4.1 Second Amendment to Rights Agreement.
99.1 Press Release dated May 3, 1995.
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Exhibit 2.1
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CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AMONG
BARRETT RESOURCES CORPORATION,
VANILLA CORPORATION
AND
PLAINS PETROLEUM COMPANY
DATED AS OF MAY 2, 1995
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TABLE OF CONTENTS
Page
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Parties and Recitals................................................... 1
ARTICLE I
THE MERGER
Section 1.1 The Merger.................................................. 1
Section 1.2 Effective Time.............................................. 2
Section 1.3 Effects of the Merger....................................... 2
Section 1.4 Certificate of Incorporation,
By-laws and Directors.................................... 2
Section 1.5 Conversion of Securities.................................... 2
Section 1.6 Parent to Make Certificates Available....................... 3
Section 1.7 Dividends; Transfer Taxes................................... 4
Section 1.8 No Fractional Securities.................................... 5
Section 1.9 Return of Exchange Fund..................................... 5
Section 1.10 Adjustment of Exchange Ratio................................ 5
Section 1.11 No Further Ownership Rights in Company
Common Stock............................................. 6
Section 1.12 Closing of Company Transfer Books........................... 6
Section 1.13 Further Assurances.......................................... 6
Section 1.14 Closing..................................................... 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT
Section 2.1 Organization, Standing and Power............................ 7
Section 2.2 Capital Structure........................................... 7
Section 2.3 Authority; Non-Contravention................................ 8
Section 2.4 SEC Documents............................................... 10
Section 2.5 Engineering Reports......................................... 10
Section 2.6 Oil and Gas Reserve Information............................. 11
Section 2.7 Registration Statement and Proxy Statement.................. 12
Section 2.8 Absence of Material Adverse Change.......................... 13
Section 2.9 Pooling of Interests; Reorganization........................ 13
Section 2.10 Taxes....................................................... 14
Section 2.11 Title to Property........................................... 14
Section 2.12 Employee Benefit Plans...................................... 15
Section 2.13 Labor Matters............................................... 15
Section 2.14 Environmental Matters....................................... 16
Section 2.15 Litigation.................................................. 18
Section 2.16 Governmental Licenses and Permits;
Compliance with Law...................................... 18
Section 2.17 Required Vote of Parent Stockholders........................ 18
Section 2.18 Opinion of Financial Advisor................................ 19
Section 2.19 Brokers..................................................... 19
(i)
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization, Standing and Power............................ 19
Section 3.2 Capital Structure........................................... 19
Section 3.3 Authority; Non-Contravention................................ 20
Section 3.4 SEC Documents............................................... 21
Section 3.5 Engineering Reports......................................... 22
Section 3.6 Oil and Gas Reserve Information............................. 22
Section 3.7 Registration Statement and Proxy Statement.................. 23
Section 3.8 Absence of Material Adverse Change.......................... 24
Section 3.9 Pooling of Interests; Reorganization........................ 24
Section 3.10 Taxes....................................................... 25
Section 3.11 Title to Property........................................... 25
Section 3.12 Employee Benefit Plans...................................... 25
Section 3.13 Labor Matters............................................... 26
Section 3.14 Environmental Matters....................................... 27
Section 3.15 Litigation.................................................. 28
Section 3.16 Governmental Licenses and Permits;
Compliance with Law...................................... 28
Section 3.17 Required Vote of the Company Stockholders................... 28
Section 3.18 Company Action.............................................. 28
Section 3.19 Section 203 of the DGCL Not Applicable...................... 29
Section 3.20 Amendment to Company Rights Agreement....................... 29
Section 3.21 Opinion of Financial Advisor................................ 29
Section 3.22 Brokers..................................................... 29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING SUB
Section 4.1 Organization and Standing................................... 30
Section 4.2 Capital Structure........................................... 30
Section 4.3 Authority; Non-Contravention................................ 30
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business Pending the Merger...................... 31
Section 5.2 No Solicitation............................................. 34
Section 5.3 Pooling of Interests; Reorganization........................ 35
Section 5.4 Conduct of Business of Sub Pending the
Merger................................................... 36
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Stockholder Approval........................................ 36
Section 6.2 Registration Statement and Proxy Statement.................. 37
Section 6.3 Access to Information....................................... 37
Section 6.4 Compliance with the Securities Act; Pooling................. 38
Section 6.5 Stock Exchange Listing...................................... 39
Section 6.6 Fees and Expenses........................................... 39
Section 6.7 Company Stock Options....................................... 40
Section 6.8 Reasonable Efforts.......................................... 41
(ii)
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Section 6.9 Public Announcements........................................ 42
Section 6.10 Real Estate Transfer and Gains Tax.......................... 42
Section 6.11 Indemnification; Directors and Officers
Insurance................................................ 42
Section 6.12 Employee Benefits........................................... 43
Section 6.13 Stay Bonuses; Merit Bonuses; Severance
Policy................................................... 44
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
Section 7.1 Conditions to Each Party's Obligation to
Effect the Merger........................................ 45
Section 7.2 Conditions to Obligation of the Company to
Effect the Merger........................................ 46
Section 7.3 Conditions to Obligations of Parent and Sub
to Effect the Merger..................................... 50
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination................................................. 54
Section 8.2 Effect of Termination....................................... 56
Section 8.3 Amendment................................................... 56
Section 8.4 Waiver...................................................... 57
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and
Warranties............................................... 57
Section 9.2 Notices..................................................... 57
Section 9.3 Interpretation.............................................. 58
Section 9.4 Counterparts................................................ 58
Section 9.5 Entire Agreement; No Third-Party
Beneficiaries............................................ 58
Section 9.6 Governing Law............................................... 59
Section 9.7 Assignment.................................................. 59
Section 9.8 Severability................................................ 59
Section 9.9 Enforcement of This Agreement............................... 59
Section 9.10 Jurisdiction and Venue...................................... 59
(iii)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 2, 1995 (this
"Agreement"), among Barrett Resources Corporation, a Delaware corporation
("Parent"), Vanilla Corporation, a Delaware corporation and a wholly-owned
subsidiary of Parent ("Sub"), and Plains Petroleum Company, a Delaware
corporation (the "Company") (Sub and the Company being hereinafter collectively
referred to as the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved and declared fair to and advisable and in the best
interests of their respective stockholders the merger of Sub and the Company
(the "Merger"), upon the terms and subject to the conditions set forth herein,
whereby each issued and outstanding share of Common Stock, par value $.01 per
share, of the Company ("Company Common Stock") not owned directly or indirectly
by Parent or the Company, will be converted into shares of Common Stock, par
value $.01 per share, of Parent ("Parent Common Stock");
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, it is intended that the Merger shall be recorded for
accounting purposes as a pooling of interests; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the
conditions hereof, and in accordance with the General Corporation Law of the
State of Delaware (the "DGCL"), Sub shall be merged with and into the Company at
the Effective Time (as hereinafter defined). At the election of Parent, any
direct wholly-owned subsidiary of Parent may be substituted for Sub as a
constituent corporation in the Merger. In such event, the
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parties agree to execute an appropriate amendment to this Agreement in order to
reflect the foregoing. Following the Merger, the separate corporate existence
of Sub shall cease and the Company shall continue as the surviving corporation
(the "Surviving Corporation") and shall succeed to and assume all the rights and
obligations of Sub in accordance with the DGCL. Notwithstanding the foregoing,
Sub may elect at any time prior to the Merger, instead of merging into the
Company as provided above, to merge the Company with and into Sub; PROVIDED,
HOWEVER, that the Company shall not be deemed to have breached any of its
representations, warranties or covenants herein solely by reason of such
election. In such event, the parties agree to execute an appropriate amendment
to this Agreement in order to reflect the foregoing and, where appropriate, to
provide that Sub shall be the Surviving Corporation and will continue under the
name "Plains Petroleum Company."
Section 1.2 EFFECTIVE TIME. The Merger shall become effective
when the Certificate of Merger (the "Certificate of Merger"), executed in
accordance with the relevant provisions of the DGCL, is filed with the Secretary
of State of the State of Delaware; PROVIDED, HOWEVER, that, upon mutual
consent of the Constituent Corporations the Certificate of Merger may provide
for a later date of effectiveness of the Merger not more than 30 days after the
date the Certificate of Merger is filed. When used in this Agreement, the term
"Effective Time" shall mean the later of the date and time at which the
Certificate of Merger is accepted for record or such later time established by
the Certificate of Merger. The filing of the Certificate of Merger shall be
made as soon as practicable after the satisfaction or waiver of the conditions
to the Merger set forth herein.
Section 1.3 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in Section 259 of the DGCL.
Section 1.4 CERTIFICATE OF INCORPORATION, BY-LAWS AND DIRECTORS.
The Certificate of Incorporation and By-laws of Sub, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation and
By-laws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law. The directors of Sub at the Effective
Time shall be the directors of the Surviving Corporation until their respective
successors have been duly elected or appointed in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation or by
applicable law.
Section 1.5 CONVERSION OF SECURITIES. As of the Effective Time,
by virtue of the Merger and without any action on the part of any stockholder of
the Company:
(a) All shares of Company Common Stock, and the associated
Preferred Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of May 12, 1988, as
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amended (the "Rights Agreement"), between the Company and Chemical Bank
(successor to the Manufacturers Hanover Trust Company), as Rights Agent, that
are held in the treasury of the Company or by any wholly-owned Subsidiary (as
hereinafter defined) of the Company and any shares of Company Common Stock (and
associated Rights) owned by Parent, Sub or any other wholly-owned Subsidiary of
Parent shall be cancelled and no capital stock of Parent or other consideration
shall be delivered in exchange therefor.
(b) Each issued and outstanding share of capital stock of Sub shall
be converted into and become one fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Surviving Corporation.
(c) Subject to the provisions of Sections 1.8 and 1.10 hereof, each
share of Company Common Stock (and associated Right) issued and outstanding
immediately prior to the Effective Time (other than shares (and associated
Rights) to be cancelled in accordance with Section 1.5(a)) shall be converted
into 1.30 shares (the "Exchange Ratio") of validly issued, fully paid and
nonassessable shares of Parent Common Stock. All such shares of Company Common
Stock (and associated Rights), when so converted, shall no longer be outstanding
and shall automatically be cancelled and retired and each holder of a
Certificate (as defined in Section 1.6(a)) representing any such shares (and
associated Rights) shall cease to have any rights with respect thereto, except
the right to receive certain dividends and other distributions as contemplated
by Section 1.7 and shares of Parent Common Stock and any cash, without interest,
in lieu of fractional shares to be issued or paid in consideration therefor upon
the surrender of such Certificate in accordance with Section 1.6.
Section 1.6 PARENT TO MAKE CERTIFICATES AVAILABLE.
(a) EXCHANGE OF CERTIFICATES. Parent and the Company shall
authorize The Bank of Boston (or such other person or persons as shall be
reasonably acceptable to Parent and the Company) to act as Exchange Agent
hereunder (the "Exchange Agent"). As soon as practicable after the Effective
Time, Parent shall deposit with the Exchange Agent for the benefit of the
holders of certificates which immediately prior to the Effective Time
represented shares of Company Common Stock (and associated Rights) (the
"Certificates") certificates representing the shares of Parent Common Stock
(such shares of Parent Common Stock, together with any dividends or
distributions with respect thereto payable as provided in Section 1.7, being
hereinafter referred to as the "Exchange Fund") issuable pursuant to Section
1.5(c) in exchange for outstanding shares of Company Common Stock (and
associated Rights).
(b) EXCHANGE PROCEDURES. As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each holder
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of record of a Certificate whose shares (and associated Rights) were converted
pursuant to Section 1.5 into shares of Parent Common Stock a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual and proper
delivery of the Certificates to the Exchange Agent and shall contain
instructions for use in effecting the surrender of the Certificates in exchange
for certificates representing shares of Parent Common Stock and shall be in such
form and contain such other provisions as Parent and the Company may reasonably
specify). Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Parent Common Stock which such
holder has the right to receive pursuant to this Article I, and the Certificate
so surrendered shall forthwith be cancelled. Until surrendered as contemplated
by this Section 1.6, each Certificate shall, at and after the Effective Time, be
deemed to represent only the right to receive, upon surrender of such
Certificate, the certificate representing the appropriate number of shares of
Parent Common Stock, cash in lieu of fractional shares as contemplated by
Section 1.8 and certain dividends and other distributions as contemplated by
Section 1.7.
Section 1.7 DIVIDENDS; TRANSFER TAXES. No dividends or other
distributions that are declared on or after the Effective Time on Parent Common
Stock or are payable to the holders of record thereof on or after the Effective
Time will be paid to persons entitled by reason of the Merger to receive
certificates representing Parent Common Stock until such persons surrender their
Certificates, as provided in Section 1.6, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 1.8 until
such holder of such Certificate shall so surrender such Certificate. Subject to
the effect of applicable law, there shall be paid to the record holder of the
certificates representing such Parent Common Stock (i) at the time of such
surrender or as promptly as practicable thereafter, the amount of any dividends
or other distributions theretofore paid with respect to whole shares of such
Parent Common Stock and having a record date on or after the Effective Time and
a payment date prior to such surrender and (ii) at the appropriate payment date
or as promptly as practicable thereafter, the amount of dividends or other
distributions payable with respect to whole shares of Parent Common Stock and
having a record date on or after the Effective Time but prior to surrender and a
payment date subsequent to surrender. In no event shall the person entitled to
receive such dividends or other distributions be entitled to receive interest on
such dividends or other distributions. If any cash or certificate representing
shares of Parent Common Stock is to be paid to or issued in a name other than
that in which the Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the Certificate so surrendered
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shall be properly endorsed and otherwise in proper form for transfer and that
the person requesting such exchange shall pay to the Exchange Agent any transfer
or other taxes required by reason of the issuance of certificates for such
shares of Parent Common Stock in a name other than that of the registered holder
of the Certificate surrendered, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable.
Section 1.8 NO FRACTIONAL SECURITIES. No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates pursuant to this Article I, and no Parent
dividend or other distribution or stock split or combination shall relate to any
fractional security, and such fractional interests shall not entitle the owner
thereof to vote or to any rights of a security holder of Parent. In lieu of any
such fractional securities, each holder of shares of Company Common Stock who
would otherwise have been entitled to receive a fraction of a share of Parent
Common Stock (after taking into account all shares of Company Common Stock then
held of record by such holder) shall receive cash (without interest) in an
amount equal to the product of such fractional part of a share of Company Common
Stock multiplied by the Closing Price. As used in this Agreement, (i) "Closing
Price" means the average of the midpoint of the daily high and low trading
prices of Parent Common Stock, rounded to four decimal places, as reported under
New York Stock Exchange Composite Transactions Reports in THE WALL STREET
JOURNAL for each of the first 20 consecutive Trading Days in the period
commencing 25 Trading Days prior to the date of the Closing and (ii) "Trading
Day" means a day on which the New York Stock Exchange, Inc. (the "NYSE") is open
for trading.
Section 1.9 RETURN OF EXCHANGE FUND. Any portion of the Exchange
Fund which remains undistributed to the former stockholders of the Company for
one year after the Effective Time shall be delivered to Parent, upon demand of
Parent, and any former stockholders of the Company who have not theretofore
complied with this Article I shall thereafter look only to Parent for payment of
their claim for Parent Common Stock, any cash in lieu of fractional shares of
Parent Common Stock and any dividends or distributions with respect to Parent
Common Stock. None of Parent, the Company or the Surviving Corporation shall be
liable to any holder of shares of Company Common stock (and associated Rights)
for shares (or dividends or distributions with respect thereto) or cash in lieu
of fractional shares of Parent Common Stock delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
Section 1.10 ADJUSTMENT OF EXCHANGE RATIO. Subject to Section
5.1(a), in the event of any reclassification, recapitalization, stock split,
stock combination, stock dividend or share exchange with respect to Parent
Common Stock or Company Common Stock, as the case may be, (or if a record date
with respect to
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any of the foregoing should occur) prior to the Effective Time, appropriate and
proportionate adjustments, if any, shall be made to the Exchange Ratio, and all
references to the Exchange Ratio in this Agreement shall be deemed to be to the
Exchange Ratio as so adjusted.
Section 1.11 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK.
All shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms hereof (including any cash paid
pursuant to Sections 1.7 or 1.8) shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Company Common Stock (and
associated Rights), subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distribution with a record date prior to
the Effective Time which may have been declared or made by the Company on such
shares of Company Common Stock in accordance with the terms of this Agreement.
Section 1.12 CLOSING OF COMPANY TRANSFER BOOKS. At the Effective
Time, the stock transfer books of the Company shall be closed and no transfer of
shares of Company Common Stock (and associated Rights) shall thereafter be made.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be cancelled and exchanged as provided in this
Article I.
Section 1.13 FURTHER ASSURANCES. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations in the Merger,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of such Constituent Corporations, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
Section 1.14 CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Bearman Talesnick & Clowdus Professional Corporation, 1200 Seventeenth
Street, Suite 2600, Denver, Colorado, at 10:00 a.m. local time, on the second
business day after the day on which the last of the conditions set forth in
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Article VII hereof shall have been fulfilled or waived or at such other time and
place as Parent and the Company shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
Section 2.1 ORGANIZATION, STANDING AND POWER. Parent is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to carry on its business as now being conducted. Parent and each of
its Significant Subsidiaries (as hereinafter defined) is duly qualified to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect on Parent.
For purposes of this Agreement (a) "Material Adverse Change" or "Material
Adverse Effect" means, when used with respect to Parent or the Company, as the
case may be, any change or effect that is or, so far as can reasonably be
determined, is likely to be materially adverse to the assets, properties,
condition (financial or otherwise), business or results of operations of Parent
and its Significant Subsidiaries taken as a whole or the Company and its
Significant Subsidiaries taken as a whole, as the case may be, (b) "Subsidiary"
means any corporation, partnership, joint venture or other legal entity of which
Parent or the Company, as the case may be (either alone or through or together
with any other Subsidiary), owns, directly or indirectly, 50% or more of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other legal entity and (c) "Significant Subsidiary" means any
Significant Subsidiary within the meaning of Rule 1-02 of Regulation S-X of the
United States Securities and Exchange Commission (the "SEC").
Section 2.2 CAPITAL STRUCTURE. As of the date hereof, the
authorized capital stock of Parent consists of 17,000,000 shares of Parent
Common Stock and 1,000,000 shares of Preferred Stock, par value $.001 per share
("Parent Preferred Stock"). At the close of business on April 28, 1995 (i)
11,956,238 shares of Parent Common Stock were validly issued and outstanding,
fully paid and nonassessable and free of preemptive rights, (ii) 704,500 shares
of Parent Common Stock were reserved for issuance upon the exercise of
outstanding options for Parent Common Stock, (iii) 228,500 shares of Parent
Common Stock were reserved for issuance under Parent's 1990 Stock Option Plan,
the 1994 Stock Option Plan and the Non-Discretionary Stock Option Plan, (iv)
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1,322 shares of Parent Common Stock were held by Parent in its treasury and (v)
no shares of Parent Preferred Stock were issued and outstanding. There are no
outstanding stock appreciation rights ("SARs"). All of the shares of Parent
Common Stock issuable in exchange for Company Common Stock (and associated
Rights) at the Effective Time in accordance with this Agreement will be, when so
issued, duly authorized, validly issued, fully paid and nonassessable and free
of preemptive rights and will be, subject to official notice of issuance, either
listed on a national securities exchange or designated as a national market
system security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. ("Nasdaq") or held of record by more than 2,000
stockholders. Except for options granted pursuant to Parent's 1990 Stock Option
Plan, the 1994 Stock Option Plan and the Non-Discretionary Stock Option Plan,
there are no options, warrants, rights, commitments, agreements, arrangements or
undertakings of any kind to which Parent or any of its Significant Subsidiaries
is a party or by which any of them is bound obligating Parent or any of its
Significant Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of Parent or of any of its Significant Subsidiaries. True and correct copies of
all agreements, instruments and other governing documents relating to the
Parent's 1990 Stock Option Plan, the 1994 Stock Option Plan and the
Non-Discretionary Stock Option Plan have been furnished to the Company.
Section 2.3 AUTHORITY; NON-CONTRAVENTION. The Board of Directors
of Parent has declared fair to and advisable and in the best interests of the
stockholders of Parent an amendment to Parent's Certificate of Incorporation to
increase the number of authorized shares of Parent Common Stock to 35,000,000
shares (the "Charter Amendment") and the issuance of shares of Parent Common
Stock pursuant to the Merger (the "Share Issuance"). Parent has all requisite
power and authority to enter into this Agreement and, subject to the approval of
the Charter Amendment and the Share Issuance by the stockholders of Parent, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and the consummation by Parent of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent, subject to such approval of the Charter Amendment and the
Share Issuance by the stockholders of Parent. This Agreement has been duly
executed and delivered by Parent and (assuming the valid authorization,
execution and delivery of this Agreement by the Company) constitutes a valid and
binding obligation of Parent enforceable against Parent in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws of general applicability relating to or affecting the enforcement of
creditors' rights and by the effect of general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at
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law). The Charter Amendment, the Share Issuance and the filing of a
registration statement with the SEC by Parent on Form S-4 under the Securities
Act of 1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), for the purpose of registering the shares of
Parent Common Stock to be issued in the Merger (together with any amendments or
supplements thereto, the "Registration Statement") has been duly authorized by
Parent's Board of Directors. Except as set forth in Section 2.3 of the
disclosure statement of Parent dated as of the date hereof previously furnished
to the Company (the "Parent Disclosure Schedule"), the execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material benefit under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Parent or any of its Significant
Subsidiaries under, any provision of (i) the Certificate of Incorporation or
By-laws (true and complete copies of which as of the date hereof have been
delivered to the Company) of Parent or any provision of the comparable charter
or organization documents of any of its Significant Subsidiaries, (ii) any loan
or credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or any
of its Significant Subsidiaries or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Parent or any of its
Significant Subsidiaries or any of their respective properties or assets, other
than, in the case of clauses (ii) or (iii), any such conflicts, violations,
defaults, rights, liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not have a Material Adverse Effect on
Parent, materially impair the ability of Parent to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby. Except as set forth on Section 2.3 of the Parent Disclosure Schedule,
no filing or registration with, or authorization, consent or approval of, any
domestic (federal and state), foreign or supranational court, commission,
governmental body, regulatory agency, authority or tribunal (a "Governmental
Entity") is required by or with respect to Parent or any of its Significant
Subsidiaries in connection with the execution and delivery of this Agreement by
Parent or is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement, except for (i) in connection, or in
compliance, with the provisions of the Securities Act and the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act"), (ii) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (iii) such filings
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and consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by this Agreement, (iv)
such filings as may be required in connection with applicable taxes, (v) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under the corporation, takeover or "Blue Sky" laws of
various states, (vi) such filings and approvals as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "Improvements Act"),
and (vii) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on Parent,
materially impair the ability of Parent to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
Section 2.4 SEC DOCUMENTS. Parent has filed all required
documents with the SEC since January 1, 1993 (the "Parent SEC Documents"). As
of their respective dates, the Parent SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and none of the Parent SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Parent included in the Parent SEC Documents comply as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
the unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto) and fairly present the consolidated financial position
of Parent and its consolidated Subsidiaries as at the dates thereof and the
consolidated results of their operations and statements of cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments and to any other adjustments described therein).
There is no liability or obligation of any kind, whether accrued, absolute,
fixed or contingent, of Parent or any Subsidiary of Parent of which the
executive officers of Parent have knowledge and which is required by generally
accepted accounting principles to be reflected or reserved against or otherwise
disclosed in the most recent financial statements of Parent included in the
Parent SEC Documents which is not so reflected or reserved against that
individually or in the aggregate would have a Material Adverse Effect on Parent.
Section 2.5 ENGINEERING REPORTS. All information supplied to
Ryder Scott Company by or on behalf of Parent and its Subsidiaries that was
material to such firm's review of Parent's estimates of oil and gas reserves
attributable to the Oil and Gas
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Interests of Parent and its Subsidiaries in connection with the preparation of
the oil and gas reserve engineering report concerning the Oil and Gas Interests
of Parent and its Subsidiaries as of September 30, 1994 reviewed by Ryder Scott
Company (the "Parent Engineering Report") was (at the time supplied or as
modified or amended prior to the issuance of the Parent Engineering Report) true
and correct in all material respects. For purposes of this Agreement "Oil and
Gas Interests" means, when used with respect to Parent or the Company or each of
their respective Subsidiaries, as the case may be, direct and indirect interests
in and rights with respect to oil, gas, helium, carbon dioxide, mineral, and
related properties and assets of any kind and nature, direct or indirect,
including working, royalty, and overriding royalty interests, production
payments, operating rights, net profit interests, other nonworking interests,
and nonoperating interests; all interests in and rights with respect to oil,
condensate, gas, casinghead gas, helium, carbon dioxide and other liquid or
gaseous hydrocarbons (collectively, "Hydrocarbons") and other minerals or
revenues therefrom and all contracts in connection therewith and claims and
rights thereto (including all oil and gas leases, operating agreements,
unitization and pooling agreements and orders, division orders, transfer orders,
mineral deeds, royalty deeds, oil and gas sales, exchange and processing
contracts and agreements, and in each case, interests thereunder), surface
interests, fee interests, reversionary interests, reservations, and concessions;
all easements, rights of way, licenses, permits, leases, and other interests
associated with, appurtenant to, or necessary for the operation of any of the
foregoing; and all interests in equipment and machinery (including well
equipment and machinery), oil and gas production, gathering, transmissions,
treating, processing, and storage facilities (including tanks, tank batteries,
pipelines, and gathering systems), pumps, water plants, electric plants,
gasoline and gas processing plants, refineries, and other tangible personal
property and fixtures associated with, appurtenant to, or necessary for the
operation of any of the foregoing. Except for changes in classification or
values of oil and gas reserve or property interests that occurred in the
ordinary course of business since September 30, 1994, and except for changes
(including changes in commodity prices) generally affecting the oil and gas
industry on a nationwide basis, there has been no Material Adverse Change in
respect of Parent regarding the matters addressed in the Parent Engineering
Report.
Section 2.6 OIL AND GAS RESERVE INFORMATION. Except as otherwise
set forth in Section 2.6 of the Parent Disclosure Schedule:
(a) None of the wells included in the Oil and Gas Interests of
Parent and its Subsidiaries has been overproduced such that it is subject
or liable to being shut-in or to any other overproduction penalty, except
where any
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such overproduction would not have a Material Adverse Effect on Parent;
(b) There have been no changes proposed in the production
allowables for any wells included in the Oil and Gas Interests of Parent
and its Subsidiaries that would have a Material Adverse Effect on Parent;
(c) All wells included in the Oil and Gas Interests of Parent and
its Subsidiaries have been drilled and (if completed) completed, operated,
and produced in accordance with good oil and gas field practices and in
compliance in all material respects with applicable oil and gas leases and
applicable laws, rules, and regulations, except where any failure or
violation would not have a Material Adverse Effect on Parent;
(d) Neither Parent nor its Subsidiaries has agreed to or is now
obligated to abandon any well included in the Oil and Gas Interests of
Parent and its Subsidiaries that is not or will not be abandoned and
reclaimed in accordance with the applicable laws, rules, and regulations
and good oil and gas industry practices, except where any abandonment
would not have a Material Adverse Effect on Parent;
(e) Proceeds from the sale of Hydrocarbons produced from the Oil
and Gas Interests of Parent and its Subsidiaries are being received by
Parent and its Subsidiaries in a timely manner and are not being held by
third parties in suspense for any reason (except for amounts, individually
or in the aggregate, not in excess of $1,000,000 and held in suspense in
the ordinary course of business); and
(f) No person has any call on, option to purchase, or similar
rights with respect to the Oil and Gas Interests of Parent and its
Subsidiaries or to the production attributable thereto, and upon
consummation of the transactions contemplated by this Agreement, Parent or
its Subsidiaries will have the right to market production from the Oil and
Gas Interests of Parent and its Subsidiaries on terms no less favorable
than the terms upon which such company is currently marketing such
production, except where any call or option would not have a Material
Adverse Effect on Parent.
Section 2.7 REGISTRATION STATEMENT AND PROXY STATEMENT. None of
the information to be supplied by Parent or Sub for inclusion or incorporation
by reference in the Registration Statement or the proxy statement (together with
any amendments or supplements thereto, the "Proxy Statement") relating to the
Stockholder Meetings (as defined in Section 6.1) will (i) in the case of the
Registration Statement, at the time it becomes effective and at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be
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stated therein or necessary in order to make the statements therein not
misleading or (ii) in the case of the Proxy Statement, at the time of the
mailing of the Proxy Statement and at the time of the Stockholder Meetings,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event with respect
to Parent, its officers and directors or any of its Subsidiaries shall occur
which is required to be described in the Proxy Statement or the Registration
Statement, such event shall be so described, and an amendment or supplement
shall be promptly filed with the SEC and, as required by law, disseminated to
the stockholders of the Company and Parent. The Registration Statement will
comply (with respect to Parent and Sub) as to form in all material respects with
the provisions of the Securities Act, and the Proxy Statement will comply (with
respect to Parent and Sub) as to form in all material respects with the
provisions of the Exchange Act.
Section 2.8 ABSENCE OF MATERIAL ADVERSE CHANGE. Except as
disclosed in the Parent SEC Documents filed with the SEC prior to the date
hereof, there has not been any Material Adverse Change with respect to Parent
(other than changes in generally accepted accounting principles or
interpretations thereof that affect the oil and gas industry generally or
changes in general economic conditions that affect the oil and gas industry on a
nationwide basis).
Section 2.9 POOLING OF INTERESTS; REORGANIZATION. To the
knowledge of Parent, neither Parent nor Sub has (i) taken any action or failed
to take any action which action or failure to take action would jeopardize the
treatment of Sub's combination with the Company in the Merger as a pooling of
interests for accounting purposes or (ii) taken any action or failed to take any
action which action or failure to take action would jeopardize the qualification
of the Merger as a reorganization within the meaning of Section 368(a) of the
Code. Without limiting the foregoing: (i) Sub is wholly owned directly by
Parent, and Sub has never owned or held any assets and has never incurred any
liabilities, except for assets transferred to Sub in connection with its
incorporation, all of which assets will be held by the Surviving Corporation
immediately following the Merger, (ii) Parent has no plan or intention: to cause
the Surviving Corporation to issue any shares of stock following the Merger, to
reacquire any of the Parent Common Stock issued in the Merger, to liquidate the
Surviving Corporation, to merge the Surviving Corporation with or into another
corporation, to sell or otherwise dispose of any stock of the Surviving
Corporation, or to cause the Surviving Corporation to sell or otherwise dispose
of (except in the ordinary course of business) any of its assets, (iii)
following the Merger, the Surviving Corporation will continue at least one
significant historic business line of the Company, or use at least a significant
portion of the
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Company's historic business assets in a business, in each case within the
meaning of Treas. Reg. Section 1.368-1(d) and (iv) neither Parent nor any of its
Subsidiaries own, nor have any of them owned during the past five years, any
capital stock of the Company.
Section 2.10 TAXES. Except as otherwise set forth in Section
2.10 of the Parent Disclosure Schedule, (i) Parent and each Significant
Subsidiary has filed all material Tax Returns required to have been filed on or
before the date hereof or extensions have been duly obtained; (ii) all Taxes
shown to be due on the Tax Returns referred to in clause (i) have been timely
paid or extensions have been duly obtained or such taxes have been adequately
provided for or are being timely and properly contested; (iii) neither Parent
nor any Significant Subsidiary has waived any statute of limitations in respect
of Taxes of Parent or such Subsidiary; (iv) the Tax Returns referred to in
clause (i) relating to federal and state income Taxes have been examined by the
Internal Revenue Service or the appropriate state taxing authority or the period
for assessment of the Taxes in respect of which such Tax Returns were required
to be filed has expired; (v) no issues that have been raised in writing by the
relevant taxing authority in connection with the examination of the Tax Returns
referred to in clause (i) are currently pending; (vi) all deficiencies asserted
or assessments made as a result of any examination of the Tax Returns referred
to in clause (i) by a taxing authority have been paid in full or adequately
provided for or are being timely and properly contested; and (vii) neither
Parent nor any Significant Subsidiary of Parent is a party to an income Tax
allocation or sharing agreement with respect to a group of corporations filing
tax returns on a combined, consolidated or unitary basis. For purposes of this
Agreement, (a) "Tax" (and, with correlative meaning, "Taxes" and "Taxable")
means any federal, state, local or foreign income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or added minimum, ad valorem, transfer or excise tax, or any other
tax, custom, duty, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or penalty, imposed by any
governmental authority and (b) "Tax Return" means any return, report or similar
statement required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
Section 2.11 TITLE TO PROPERTY. Except as set forth on Section
2.11 of the Parent Disclosure Schedule, Parent or its Subsidiaries has good and,
with respect to real property, marketable title to all of the material assets
reflected on the consolidated financial statements of Parent included in the
Parent SEC Documents as being owned by it or its Subsidiaries and all of the
material assets thereafter acquired by it or its Subsidiaries (except to the
extent that such assets have thereafter been disposed of in the ordinary course
of business consistent
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with past practice), subject to no liens, mortgages, pledges, security
interests, encumbrances, claims or charges of any kind (collectively, "Liens")
except for (i) Liens for taxes not yet delinquent or the validity of which is
being contested in good faith and (ii) any Liens arising by operation of law
securing obligations not yet overdue. Notwithstanding the foregoing, title to
the Oil and Gas Interests of Parent and its Subsidiaries is of the type
customarily acceptable to prudent investors in Oil and Gas Interests in the area
where such Oil and Gas Interests of Parent and its Subsidiaries are located.
Section 2.12 EMPLOYEE BENEFIT PLANS. With respect to all the
employee benefit plans, programs and arrangements maintained for the benefit of
any current or former employee, officer or director of Parent or any Subsidiary
of Parent (collectively, the "PARENT PLANS"), except as set forth in the
Parent SEC Documents and except as would not, individually or in the aggregate,
have a Material Adverse Effect on Parent: (i) none of the Parent Plans is a
multiemployer plan within the meaning of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"); (ii) none of the Parent Plans promises or
provides retiree medical or life insurance benefits to any person, except as
otherwise required by law in the applicable jurisdiction and, outside of the
United States, in accordance with local custom and practice; (iii) each Parent
Plan intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service that it is so
qualified and nothing has occurred since the date of such letter that could
reasonably be expected to affect the qualified status of such Parent Plan; (iv)
each Parent Plan has been operated in all respects in accordance with its terms
and the requirements of applicable law; (v) neither Parent nor any Subsidiary of
Parent has incurred any direct or indirect liability under, arising out of or by
operation of Title IV of ERISA in connection with the termination of, or
withdrawal from, any Parent Plan or other retirement plan or arrangement, and no
fact or event exists that could reasonably be expected to give rise to any such
liability; and (vi) Parent and its Subsidiaries have not incurred any liability
under, and have complied in all respects with, the Worker Adjustment Retraining
Notification Act, and no fact or event exists that could give rise to liability
under such Act. Except as set forth in the Parent SEC Documents, the aggregate
accumulated benefit obligations of each Parent Plan subject to Title IV of ERISA
(as of the date of the most recent actuarial valuation prepared for such Parent
Plan) do not exceed the fair market value of the assets of such Parent Plan (as
of the date of such valuation).
Section 2.13 LABOR MATTERS. (a) Neither Parent nor any of its
Significant Subsidiaries is a party to any collective bargaining agreement
or other material contract or agreement with any labor organization or other
representative of employees nor is any such contract being negotiated; (b) there
is no material unfair labor practice charge or complaint pending nor, to the
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knowledge of the executive officers of Parent, threatened, with regard to
employees of Parent or any Significant Subsidiary; (c) there is no labor strike,
material slowdown, material work stoppage or other material labor controversy in
effect, or, to the knowledge of the executive officers of Parent, threatened
against Parent or any of its Significant Subsidiaries; (d) as of the date
hereof, no representation question exists, nor to the knowledge of the executive
officers of Parent are there any campaigns being conducted to solicit cards from
the employees of Parent or any Significant Subsidiary of Parent to authorize
representation by any labor organization; (e) neither Parent nor any Significant
Subsidiary of Parent is a party to, or is otherwise bound by, any consent decree
with any governmental authority relating to employees or employment practices of
Parent or any Significant Subsidiary of Parent; and (f) Parent and each
Significant Subsidiary of Parent are in compliance with all applicable
agreements, contracts and policies relating to employment, employment practices,
wages, hours and terms and conditions of employment of the employees, except
where the failure to be in compliance with each such agreement, contract and
policy would not, either singly or in the aggregate, have a Material Adverse
Effect on Parent.
Section 2.14 ENVIRONMENTAL MATTERS. (a) Except as set forth on
Section 2.14 of the Parent Disclosure Schedule and except to the extent that
the inaccuracy of any of the following, individually or in the aggregate, would
not have a Material Adverse Effect on Parent, to the knowledge of the executive
officers of Parent:
(i) Parent and its Subsidiaries hold, and are in compliance with
and have been compliance with for the last two years, all Environmental
Permits, and are otherwise in substantial compliance and have been in
substantial compliance for the last two years with, all applicable
Environmental Laws and there is no condition that is reasonably likely to
prevent or materially interfere prior to the Effective Time with
compliance by Parent and its Subsidiaries with Environmental Laws;
(ii) no modification, revocation, reissuance, alteration, transfer
or amendment of any Environmental Permit, or any review by, or approval
of, any third party of any Environmental Permit is required in connection
with the execution or delivery of this Agreement or the consummation by
Parent of the transactions contemplated hereby or the operation of the
business of Parent or any of its Subsidiaries on the date of the Closing;
(iii) neither Parent nor any of its Subsidiaries has received any
Environmental Claim, nor has any Environmental Claim been threatened
against Parent or any of its Subsidiaries;
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(iv) neither Parent nor any of its Subsidiaries has entered into,
agreed to or is subject to any outstanding judgment, decree, order or
consent arrangement with any governmental authority under any
Environmental Laws, including without limitation those relating to
compliance with any Environmental Laws or to the investigation, cleanup,
remediation or removal of Hazardous Materials;
(v) there are no circumstances that are reasonably likely to give
rise to liability under any agreements with any person pursuant to which
Parent or any Subsidiary of Parent would be required to defend, indemnify,
hold harmless, or otherwise be responsible for any violation by or other
liability or expense of such person, or alleged violation by or other
liability or expense of such person, arising out of any Environmental Law;
and
(vi) there are no other circumstances or conditions that are
reasonably likely to give rise to liability of Parent or any of its
Subsidiaries under any Environmental Laws.
(b) For purposes of this Agreement, the terms below shall have the
following meanings:
"Environmental Claim" means any written complaint, notice, claim,
demand, action, suit or judicial, administrative or arbitral proceeding by
any person to Parent or any of its Subsidiaries (or, for purposes of
Section 3.14, the Company or any of its Subsidiaries) asserting liability
or potential liability (including without limitation, liability or
potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damage, personal
injury, fines or penalties) arising out of, relating to, based on or
resulting from (i) the presence, discharge, emission, release or
threatened release of any Hazardous Materials at any location, (ii)
circumstances forming the basis of any violation or alleged violation of
any Environmental Laws or Environmental Permits, or (iii) otherwise
relating to obligations or liabilities under any Environmental Law.
"Environmental Permits" means all permits, licenses, registrations,
exemptions and other governmental authorizations required under
Environmental Laws for Parent or any of its Subsidiaries (or, for purposes
of Section 3.14, the Company or any of its Subsidiaries) to conduct their
operations as presently conducted.
"Environmental Laws" means all applicable foreign, federal, state
and local statutes, rules, regulations, ordinances, orders, decrees and
common law relating in any
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manner to pollution or protection of the environment, to the extent and in
the form that such exist at the date hereof.
"Hazardous Materials" means all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any
fraction thereof) and petroleum products, asbestos and asbestos-containing
materials, pollutants, contaminants and all other materials and
substances, including but not limited to radioactive materials regulated
pursuant to any Environmental Laws or that could result in liability under
any Environmental Laws.
Section 2.15 LITIGATION. Except as set forth in Section 2.15 of
the Parent Disclosure Schedule and except as disclosed prior to the date
hereof in the Parent SEC Documents, there is no suit, action, investigation or
proceeding pending or, to the knowledge of the executive officers of Parent,
threatened against Parent or any of its Subsidiaries at law or in equity before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind, that would have a Material Adverse Effect on
Parent or, with respect to such matters that are pending or threatened as of the
date hereof, materially impair the ability of Parent to perform its obligations
hereunder or to consummate the transactions contemplated hereby, and there is no
judgment, decree, injunction, rule or order of any court, governmental
department, commission, board, bureau, agency, instrumentality or arbitrator to
which Parent or any of its Subsidiaries is subject that would have a Material
Adverse Effect on Parent or, with respect to such items that are outstanding and
applicable as of the date hereof, materially impair the ability of Parent to
perform its obligations hereunder or to consummate the transactions contemplated
hereby.
Section 2.16 GOVERNMENTAL LICENSES AND PERMITS; COMPLIANCE WITH
LAW. Except as disclosed prior to the date hereof in the Parent SEC Documents,
since December 31, 1994, neither Parent nor any of its Significant Subsidiaries
has received notice of any revocation or modification of any federal, state,
local or foreign governmental license, certification, tariff, permit,
authorization or approval, the revocation or modification of which would have a
Material Adverse Effect on Parent. To the knowledge of the executive officers
of Parent, the conduct of the business of each of Parent and its Subsidiaries
complies with all statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees or arbitration awards applicable thereto, except for violations
or failures to comply, if any, that, individually or in the aggregate, would
not have a Material Adverse Effect on Parent.
Section 2.17 REQUIRED VOTE OF PARENT STOCKHOLDERS. The affirmative
vote of the holders of not less than a majority of the outstanding shares of
Parent Common Stock is required to
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approve the Charter Amendment and the Share Issuance. No other vote of the
stockholders of Parent is required by law, the Certificate of Incorporation or
By-laws of Parent or otherwise in order for Parent to consummate the Merger and
the other transactions contemplated hereby.
Section 2.18 OPINION OF FINANCIAL ADVISOR. On the date hereof,
Parent has received the written opinion of Petrie Parkman & Co., Inc. to the
effect that the Merger is fair to the stockholders of Parent from a financial
point of view.
Section 2.19 BROKERS. No broker, investment banker or other
person, other than Petrie Parkman & Co., Inc., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's or other similar
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent or Sub. Parent
has previously delivered to the Company a true, correct and complete copy of any
engagement or fee agreement between Parent and its Subsidiaries, on the one
hand, and Petrie Parkman & Co., Inc. on the other.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
Section 3.1 ORGANIZATION, STANDING AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to carry on its business as now being conducted. The Company and each
of its Significant Subsidiaries is duly qualified to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.
Section 3.2 CAPITAL STRUCTURE. The authorized capital stock of
the Company consists of 20,000,000 shares of Company Common Stock and 1,000,000
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"). At
the close of business on April 28, 1995, (i) 9,828,533 shares of Company Common
Stock were issued and outstanding, (ii) 494,859 shares of Company Common Stock
were reserved for issuance upon the exercise of outstanding Company Stock
Options (as defined in Section 6.7), (iii) 18,201 shares of Company Common Stock
were held by the Company in its treasury, and (iv) 200,000 shares of Preferred
Stock were reserved for Series A Junior Participating Preferred Stock in
connection with the Rights Agreement. There are no
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outstanding SARs. All outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable and not subject to preemptive
rights. Except for (i) the Company Stock Options outstanding as of April 28,
1995, (ii) the obligations of the Company under the Plains Petroleum Company
401(k) Plan and Trust (the "401(k) Plan") and the Plains Petroleum Company
Profit Sharing Plan and Trust (the "Company Profit Sharing Plan"), and (iii) the
Rights issued pursuant to the Rights Agreement, there are no options, warrants,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its Significant Subsidiaries is a party or by which
any of them is bound obligating the Company or any of its Significant
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of the
Company or of any of its Significant Subsidiaries. True and correct copies of
all agreements, instruments and other governing documents relating to the 401(k)
Plan and the Company Profit Sharing Plan have been furnished to Parent.
Section 3.3 AUTHORITY; NON-CONTRAVENTION. The Board of Directors
of the Company has declared the Merger fair to and advisable and in the best
interest of the stockholders of the Company, and the Company has all requisite
power and authority to enter into this Agreement and, subject to approval of the
Merger by the stockholders of the Company, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company, subject to such approval of the Merger by the stockholders of
the Company. This Agreement has been duly executed and delivered by the Company
and (assuming the valid authorization, execution and delivery of this Agreement
by Parent and Sub) constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law). Except as set forth in Section
3.3 of the disclosure statement of the Company dated as of the date hereof,
previously delivered to Parent (the "Company Disclosure Schedule"), the
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss of a material
benefit under, or result in the creation of any lien, security interest, charge
or encumbrance upon any of the properties or assets of the Company or any of its
Significant Subsidiaries
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under, any provision of (i) the Restated Certificate of Incorporation or By-laws
of the Company (true and complete copies of which as of the date hereof have
been delivered to Parent) or any provision of the comparable charter or
organization documents of any of its Significant Subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the Company
or any of its Significant Subsidiaries or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
its Significant Subsidiaries or any of their respective properties or assets,
other than, in the case of clauses (ii) or (iii), any such conflicts,
violations, defaults, rights, liens, security interests, charges or encumbrances
that, individually or in the aggregate, would not have a Material Adverse Effect
on the Company, materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby. No filing or registration with, or authorization, consent
or approval of, any Governmental Entity is required by or with respect to the
Company or any of its Significant Subsidiaries in connection with the execution
and delivery of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, except for (i) in connection, or in
compliance, with the provisions of the Exchange Act, (ii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which the
Company or any of its Significant Subsidiaries is qualified to do business,
(iii) such filings and consents as may be required under any environmental,
health or safety law or regulation pertaining to any notification, disclosure or
required approval triggered by the Merger or the transactions contemplated by
this Agreement, (iv) such filings as may be required in connection with
applicable taxes, (v) such other consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under the
corporation, takeover or "Blue Sky" laws of various states, (vi) such filings
and approvals as may be required under the Improvements Act, and (vii) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings the failure of which to be obtained or made would not, individually
or in the aggregate, have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
Section 3.4 SEC DOCUMENTS. The Company has filed all required
documents with the SEC since January 1, 1993 (the "Company SEC Documents"). As
of their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and none of the Company SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order
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to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the Company SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as at the dates thereof and the consolidated results
of their operations and changes in financial position for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein). There is no
liability or obligation of any kind, whether accrued, absolute, fixed or
contingent, of the Company or any Subsidiary of the Company of which the
executive officers of the Company have knowledge and which is required by
generally accepted accounting principles to be reflected or reserved against or
otherwise disclosed in the most recent financial statements of the Company
included in the Company SEC Documents which is not so reflected or reserved
against that individually or in the aggregate would have a Material Adverse
Effect on the Company.
Section 3.5 ENGINEERING REPORTS. All information supplied to
Netherland, Sewell & Associates, Inc. ("NSA") by or on behalf of the Company and
its Subsidiaries that was material to such firm's preparation of its oil and gas
reserve engineering report dated as of December 31, 1994 (the "Company
Engineering Report") regarding the Oil and Gas Interests of Plains Petroleum
Operating Company, a wholly-owned subsidiary of the Company ("PPOC"), was (at
the time supplied or as modified or amended prior to the issuance of the Company
Engineering Report) true and correct in all material respects. Except for
changes in classification or values of oil and gas reserve or property interests
that occurred in the ordinary course of business since December 31, 1994, and
except for changes (including changes in commodity prices) generally affecting
the oil and gas industry on a nationwide basis, there has been no Material
Adverse Change in respect of the Company regarding the matters addressed in the
Company Engineering Report. All of the Oil and Gas Interests of the Company and
its Subsidiaries are held by PPOC, except the gathering, transportation and
automation equipment held by Plains Petroleum Gathering Company, a wholly-owned
subsidiary of PPOC ("PPGC").
Section 3.6 OIL AND GAS RESERVE INFORMATION. (a) None of the
wells included in the Oil and Gas Interests of PPOC has been overproduced such
that it is subject or liable to being shut-in or to any other overproduction
penalty, except where any such overproduction would not have a Material Adverse
Effect on the Company.
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(b) There have been no changes proposed in the production
allowables for any wells included in the Oil and Gas Interests of PPOC that
would have a Material Adverse Effect on the Company.
(c) All wells included in the Oil and Gas Interests of PPOC have
been drilled and (if completed) completed, operated, and produced in accordance
with good oil and gas field practices and in compliance in all material respects
with applicable oil and gas leases and applicable laws, rules, and regulations,
except where any failure or violation would not have a Material Adverse Effect
on the Company.
(d) Neither the Company nor its Significant Subsidiaries has
agreed to or is now obligated to abandon any well included in the Oil and Gas
Interests of PPOC that is not or will not be abandoned and reclaimed in
accordance with the applicable laws, rules, and regulations and good oil and gas
industry practices, except where any abandonment would not have a Material
Adverse Effect on the Company.
(e) Proceeds from the sale of Hydrocarbons produced from the Oil
and Gas Interests of PPOC are being received by the Company or its Significant
Subsidiaries in a timely manner and are not being held by third parties in
suspense for any reason (except for amounts, individually or in the aggregate,
not in excess of $1,000,000 and held in suspense in the ordinary course of
business).
(f) No person has any call on, option to purchase, or similar
rights with respect to the Oil and Gas Interests of PPOC or PPGC or to the
production attributable thereto, and upon consummation of the transactions
contemplated by this Agreement, the Company or its Significant Subsidiaries will
have the right to market production from the Oil and Gas Interests of PPOC on
terms no less favorable than the terms upon which such company is currently
marketing such production, except where any call or option would not have a
Material Adverse Effect on the Company.
Section 3.7 REGISTRATION STATEMENT AND PROXY STATEMENT. None of
the information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Registration Statement or the Proxy Statement
will (i) in the case of the Registration Statement, at the time it becomes
effective and at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading or (ii) in the
case of the Proxy Statement, at the time of the mailing of the Proxy Statement
and at the time of the Stockholder Meetings, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If at any time prior
to the Effective Time any event
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with respect to the Company, its officers and directors or any of its
Subsidiaries should occur which is required to be described in an amendment of,
or a supplement to, the Proxy Statement or the Registration Statement, such
event shall be so described, and such amendment or supplement shall be promptly
filed with the SEC and, as required by law, disseminated to the stockholders of
the Company and Parent. The Registration Statement will comply (with respect to
the Company) as to form in all material respects with the provisions of the
Securities Act, and the Proxy Statement will comply (with respect to the
Company) as to form in all material respects with the provisions of the Exchange
Act.
Section 3.8 ABSENCE OF MATERIAL ADVERSE CHANGE. Except as
disclosed in the Company SEC Documents filed with the SEC prior to the date
hereof, there has not been any Material Adverse Change with respect to the
Company (other than changes in oil and gas generally accepted accounting
principles or interpretations thereof that affect the oil and gas industry
generally or changes in general economic conditions that affect the oil and gas
industry on a nationwide basis).
Section 3.9 POOLING OF INTERESTS; REORGANIZATION. To the
knowledge of the Company, neither it nor any of its Subsidiaries has (i) taken
any action or failed to take any action which action or failure to take action
would jeopardize the treatment of Sub's combination with the Company in the
Merger as a pooling of interests for accounting purposes or (ii) taken any
action or failed to take any action which action or failure to take action would
jeopardize the qualification of the Merger as a reorganization within the
meaning of Section 368(a) of the Code. Without limiting the foregoing: (i) to
the knowledge of the executive officers of the Company, there is no plan or
intention on the part of the holders of Company Common Stock to sell, exchange,
or otherwise dispose of a number of shares of Parent Common Stock that would
cause paragraph 2 of Section 7.03 of Rev. Proc. 77-37 (as amplified) not to be
true as applied to the Merger, and the only Company stockholders beneficially
owning more than 5% of the outstanding Company Common Stock are as set forth in
the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
(ii) as of the Effective Time and immediately following the Merger, the
Surviving Corporation will hold "substantially all" of the Company's properties
within the meaning of Section 368(a)(2)(E) of the Code and Rev. Proc. 77-37 (as
amplified), (iii) there is no intercorporate indebtedness between the Company
and Parent, (iv) immediately following the Merger, the Surviving Corporation
will be wholly owned directly by Parent, and the Surviving Corporation will not
have outstanding any type of right or obligation pursuant to which any person
could acquire capital stock of the Surviving Corporation, and (v) the Company
has no plan or intention for the Surviving Corporation to issue additional
shares of its capital stock following the Merger.
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Section 3.10 TAXES. Except as otherwise set forth in Section
3.10 of the Company Disclosure Schedule, (i) the Company and each Significant
Subsidiary has filed all material Tax Returns required to have been filed on or
before the date hereof; (ii) all Taxes shown to be due on the Tax Returns
referred in clause (i) have been timely paid or extensions have been duly
obtained or such Taxes have been adequately provided for or are being timely and
properly contested; (iii) neither the Company nor any Significant Subsidiary has
waived any statute of limitations in respect of Taxes of the Company or such
Subsidiary; (iv) the Tax Returns referred to in clause (i) relating to federal
and state income Taxes have been examined by the Internal Revenue Service or the
appropriate state taxing authority or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has expired; (v) no
issues that have been raised in writing by the relevant taxing authority in
connection with the examination of the Tax Returns referred to in clause (i) are
currently pending; (vi) all deficiencies asserted or assessments made as a
result of any examination of the Tax Returns referred to in clause (i) by a
taxing authority have been paid in full or adequately provided for or are being
timely and properly contested; and (vii) neither the Company nor any Significant
Subsidiary of the Company is a party to an income Tax allocation or sharing
agreement with respect to a group of corporations filing Tax Returns on a
combined, consolidated or unitary basis.
Section 3.11 TITLE TO PROPERTY. The Company or its Subsidiaries
has good and, with respect to real property, marketable title to all of the
material assets reflected on the consolidated financial statements of the
Company included in the Company SEC Documents as being owned by it or its
Subsidiaries and all of the material assets thereafter acquired by it or its
Subsidiaries (except to the extent that such assets have thereafter been
disposed of in the ordinary course of business consistent with past practice),
subject to no Liens, except for (i) Liens for taxes not yet delinquent or the
validity of which is being contested in good faith and (ii) any Liens arising by
operation of law securing obligations not yet overdue. Notwithstanding the
foregoing, title to the Oil and Gas Interests of the Company and its
Subsidiaries is of the type customarily acceptable to prudent investors in Oil
and Gas Interests in the area where such Oil and Gas Interests of the Company
and its Subsidiaries are located.
Section 3.12 EMPLOYEE BENEFIT PLANS. With respect to all the
employee benefit plans, programs and arrangements maintained for the benefit of
any current or former employee, officer or director of the Company or any
Subsidiary of the Company (collectively, the "Company Plans"), except as set
forth in the Company SEC Documents and except as would not, individually or in
the aggregate, have a Material Adverse Effect on the Company: (i) none of the
Company Plans is a multiemployer plan within the meaning of ERISA; (ii) none
of the Company Plans
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promises or provides retiree medical or life insurance benefits to any person,
except as otherwise required by law in the applicable jurisdiction and, outside
of the United States, in accordance with local custom and practice; (iii) each
Company Plan intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service that
it is so qualified and nothing has occurred since the date of such letter that
could reasonably be expected to affect the qualified status of such Company
Plan; (iv) each Company Plan has been operated in all respects in accordance
with its terms and the requirements of applicable law; (v) neither the Company
nor any Subsidiary of the Company has incurred any direct or indirect liability
under, arising out of or by operation of Title IV of ERISA in connection with
the termination of, or withdrawal from, any Company Plan or other retirement
plan or arrangement, and no fact or event exists that could reasonably be
expected to give rise to any such liability; and (vi) the Company and its
Subsidiaries have not incurred any liability under, and have complied in all
respects with, the Worker Adjustment Retraining Notification Act, and no fact or
event exists that could give rise to liability under such Act. Except as set
forth in the Company SEC Documents, the aggregate accumulated benefit
obligations of each Company Plan subject to Title IV of ERISA (as of the date of
the most recent actuarial valuation prepared for such Company Plan) do not
exceed the fair market value of the assets of such Company Plan (as of the date
of such valuation).
Section 3.13 LABOR MATTERS. (a) Neither the Company nor any of
its Significant Subsidiaries is party to any collective bargaining agreement or
other material contract or agreement with any labor organization or other
representative of employees nor is any such contract being negotiated; (b) there
is no material unfair labor practice charge or complaint pending nor, to the
knowledge of the executive officers of the Company, threatened, with regard to
employees of the Company or any Significant Subsidiary; (c) there is no labor
strike, material slowdown, material work stoppage or other material labor
controversy in effect, or, to the knowledge of the executive officers of the
Company, threatened against the Company or any of its Significant Subsidiaries;
(d) as of the date hereof, no representation question exists, nor to the
knowledge of the executive officers of the Company are there any campaigns being
conducted to solicit cards from the employees of the Company or any Significant
Subsidiary of the Company to authorize representation by a labor organization;
(e) neither the Company nor any Significant Subsidiary of the Company is party
to, or is otherwise bound by, any consent decree with any governmental authority
relating to employees or employment practices of the Company or any Significant
Subsidiary of the Company; and (f) the Company and each Significant Subsidiary
of the Company are in compliance with all applicable agreements, contracts and
policies relating to employment, employment practices, wages, hours and terms
and conditions of employment of the employees, except where the failure to be in
compliance with each such agreement,
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contract and policy would not, either singly or in the aggregate, have a
Material Adverse Effect on the Company.
Section 3.14 ENVIRONMENTAL MATTERS. Except to the extent that
the inaccuracy of any of the following, individually or in the aggregate, would
not have a Material Adverse Effect on the Company, to the knowledge of the
executive officers of the Company:
(i) the Company and its Subsidiaries hold, and are in compliance
with and have been in compliance with for the last two years, all
Environmental Permits, and are otherwise in substantial compliance and
have been in substantial compliance for the last two years with, all
applicable Environmental Laws and there is no condition that is reasonably
likely to prevent or materially interfere prior to the Effective Time with
compliance by the Company and its Subsidiaries with Environmental Laws;
(ii) no modification, revocation, reissuance, alteration, transfer
or amendment of any Environmental Permit, or any review by, or approval
of, any third party of any Environmental Permit is required in connection
with the execution or delivery of this Agreement or the consummation by
the Company of the transactions contemplated hereby or the operation of
the business of the Company or any of its Subsidiaries on the date of the
Closing;
(iii) neither the Company nor any of its Subsidiaries has received
any Environmental Claim, nor has any Environmental Claim been threatened
against the Company or any of its Subsidiaries;
(iv) neither the Company nor any of its Subsidiaries has entered
into, agreed to or is subject to any outstanding judgment, decree, order
or consent arrangement with any governmental authority under any
Environmental Laws, including without limitation those relating to
compliance with any Environmental Laws or to the investigation, cleanup,
remediation or removal of Hazardous Materials;
(v) there are no circumstances that are reasonably likely to give
rise to liability under any agreements with any person pursuant to which
the Company or any Subsidiary of the Company would be required to defend,
indemnify, hold harmless, or otherwise be responsible for any violation by
or other liability or expense of such person, or alleged violation by or
other liability or expense of such person, arising out of any
Environmental Law; and
(vi) there are no other circumstances or conditions that are
reasonably likely to give rise to liability of the Company or any of its
Subsidiaries under any Environmental Laws.
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Section 3.15 LITIGATION. Except as set forth on Schedule 3.15 of
the Company Disclosure Schedule and except as disclosed prior to the date hereof
in the Company SEC Documents, there is no suit, action, investigation or
proceeding pending or, to the knowledge of the executive officers of the
Company, threatened against the Company or any of its Subsidiaries at law or in
equity before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind, that would have a Material
Adverse Effect on the Company or, with respect to such matters that are pending
or threatened as of the date hereof, materially impair the ability of the
Company to perform its obligations hereunder or to consummate the transactions
contemplated hereby, and there is no judgment, decree, injunction, rule or order
of any court, governmental department, commission, board, bureau, agency,
instrumentality or arbitrator to which the Company or any of its Subsidiaries is
subject that would have a Material Adverse Effect on the Company or, with
respect to such items that are outstanding and applicable as of the date hereof,
materially impair the ability of the Company to perform its obligations
hereunder or to consummate the transactions contemplated hereby.
Section 3.16 GOVERNMENTAL LICENSES AND PERMITS; COMPLIANCE WITH
LAW. Except as disclosed prior to the date hereof in the Company SEC
Documents, since December 31, 1994, neither the Company nor any of its
Significant Subsidiaries has received notice of any revocation or modification
of any federal, state, local or foreign governmental license, certification,
tariff, permit, authorization or approval, the revocation or modification of
which would have a Material Adverse Effect on the Company. To the knowledge of
the executive officers of the Company, the conduct of the business of each of
the Company and its Subsidiaries complies with all statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees or arbitration awards applicable
thereto, except for violations or failures to comply, if any, that, individually
or in the aggregate, would not have a Material Adverse Effect on the Company.
Section 3.17 REQUIRED VOTE OF THE COMPANY STOCKHOLDERS. The
affirmative vote of the holders of not less than a majority of the outstanding
shares of the Company Common Stock is required to adopt this Agreement and
approve the Merger and the other transactions contemplated hereby. No other
vote of the stockholders of the Company is required by law, the Restated
Certificate of Incorporation or By-laws of the Company or otherwise to adopt
this Agreement and approve the Merger and the other transactions contemplated
hereby.
Section 3.18 COMPANY ACTION. The Board of Directors of the
Company (at a meeting duly called and held) unanimously (a) determined that the
Merger is fair to and advisable and in the best interests of the Company and its
stockholders, (b) approved this Agreement and the Merger in accordance with the
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DGCL, (c) resolved to recommend approval and adoption of this Agreement and
Merger by the Company's stockholders and (d) directed that this Agreement be
submitted to the Company's stockholders. As a result of the approvals and
determinations described in clauses (a) and (b) above, the provisions of Article
Eleventh of the Restated Certificate of Incorporation of the Company will not be
applicable to the Merger as a "Business Transaction" (as defined in such
Restated Certificate of Incorporation).
Section 3.19 SECTION 203 OF THE DGCL NOT APPLICABLE. The Board
of Directors of the Company has approved the Merger and this Agreement and such
approval is sufficient to render inapplicable to the Merger and the other
transactions contemplated hereby the restrictions contained in Section 203 of
the DGCL.
Section 3.20 AMENDMENT TO COMPANY RIGHTS AGREEMENT. (a) The
Board of Directors of the Company has taken all necessary action to amend the
Rights Agreement so that none of the execution and delivery of this Agreement,
the conversion of shares of the Company Common Stock (and associated Rights)
into shares of Parent Common Stock and cash in lieu of fractional shares in
accordance with Article I of this Agreement, and the consummation of the Merger
or any other transaction contemplated hereby will cause (i) the Rights issued
pursuant to the Rights Agreement to become exercisable under the Rights
Agreement or (ii) Parent or any of Parent's direct or indirect Subsidiaries to
be deemed an "Acquiring Person" (as defined in the Rights Agreement). The
Company has delivered to Parent a true, correct and complete copy of the Rights
Agreement to Parent prior to the date hereof and has delivered a true, correct
and complete copy of the aforesaid amendment executed by the Company, a
counterpart of which will be promptly delivered to the Rights Agent for its
counter-execution.
(b) The "Distribution Date" (as defined in the Rights Agreement)
has not occurred and will not occur as a result of the Merger.
Section 3.21 OPINION OF FINANCIAL ADVISOR. On the date hereof,
the Company has received the written opinion of Goldman, Sachs & Co. to the
effect that the Exchange Ratio is fair to the holders of the Company Common
Stock.
Section 3.22 BROKERS. No broker, investment banker or other
person, other than Goldman, Sachs & Co. and Batchelder & Partners, Inc., the
fees and expenses of each which will be paid by the Company, is entitled to any
broker's, finder's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company. The Company has previously delivered to Parent a
true, correct and complete copy of any engagement or fee agreement between the
Company and its Subsidiaries, on the
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one hand, and Goldman, Sachs & Co. or Batchelder & Partners, Inc., on the other.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING SUB
Parent and Sub jointly and severally represent and warrant to the
Company as follows:
Section 4.1 ORGANIZATION AND STANDING. Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Sub was organized solely for the purpose of acquiring the Company
and engaging in the transactions contemplated by this Agreement and has not
engaged in any business since it was incorporated which is not in connection
with the Merger and this Agreement.
Section 4.2 CAPITAL STRUCTURE. The authorized capital stock of
Sub consists of 1,000 shares of common stock, par value $.01 per share, all of
which are validly issued and outstanding, fully paid and nonassessable and are
owned by Parent free and clear of all liens, claims and encumbrances.
Section 4.3 AUTHORITY; NON-CONTRAVENTION. Sub has the requisite
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement,
the performance by Sub of its obligations hereunder and the consummation of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and Parent as its sole stockholder, and, except for the corporate
filings required by state law, no other corporate proceedings on the part of Sub
are necessary to authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by Sub
and (assuming the due authorization, execution and delivery hereof by the
Company) constitutes a valid and binding obligation of Sub enforceable against
Sub in accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability relating to or affecting
the enforcement of creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law). The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
the loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Sub under, any provision of (i) the
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Certificate of Incorporation or By-laws (true and complete copies of which as of
the date hereof have been delivered to the Company) of Sub, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Sub or (iii)
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Sub or any of its properties or assets, other than, in the case of
clauses (ii) or (iii), any such conflicts, violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on Sub, materially impair
the ability of Sub to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 CONDUCT OF BUSINESS PENDING THE MERGER.
(a) ACTIONS. During the period from the date of this Agreement
through the Effective Time, unless Parent or the Company, as the case may be,
shall consent thereto in writing (which consent will not be unreasonably
withheld), each of the Company and Parent shall, and each shall cause its
respective Subsidiaries to, in all material respects carry on its respective
businesses in the ordinary course and consistent with past practice and, to the
extent consistent therewith and with the terms of this Agreement, use all
reasonable efforts to preserve intact its current business organizations, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing businesses shall be unimpaired at
the Effective Time. Without limiting the generality of the foregoing, prior to
the Effective Time, except as otherwise expressly contemplated by this Agreement
(including, but not limited to, Section 5.2) or Section 5.1 of the Company
Disclosure Schedule, each of the Company and Parent shall not, and each shall
cause its respective Subsidiaries not to, without the prior written consent of
the other parties to this Agreement:
(i) (x) declare, set aside or pay any dividends on, or make any
other actual, constructive or deemed distributions in respect of, any of
its respective capital stock, or otherwise make any payments to its
respective stockholders in their capacity as such, other than (1) ordinary
quarterly dividends by the Company consistent with past practice in an
amount not in excess of $.06 per share with respect to Company Common
Stock, (2) dividends declared by the Company prior to the date of this
Agreement, and (3) dividends payable to the Company declared by any of the
Company's
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Subsidiaries or to Parent declared by any of Parent's Subsidiaries, (y)
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock, or (z) purchase,
redeem or otherwise acquire any shares of capital stock of each of the
Company or Parent, or any of its respective Subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities, except in connection with the terms of their
respective stock option plans in existence on February 15, 1995, and in
the case of the Company, except in connection with the terms of its 401(k)
Plan and the Company Profit Sharing Plan;
(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber
any shares of its or its Subsidiaries' capital stock, any other voting
securities or equity equivalent or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting securities
or convertible securities or equity equivalent (other than, in the case of
the Company or Parent, the issuance of Company Common Stock or Parent
Common Stock, as the case may be, during the period from the date of this
Agreement through the Effective Time (x) upon the exercise of Company
Stock Options or Parent stock options, as the case may be, outstanding on
the date of this Agreement in accordance with their current terms or (y)
in accordance with the terms, existing at the date of this Agreement, of
the 401(k) Plan and the Company Profit Sharing Plan in the case of the
Company, and the Barrett Resources Corporation 1990 Stock Option Plan and
the Barrett Resources Corporation 1994 Stock Option Plan in the case of
Parent);
(iii) amend its Certificate of Incorporation or amend in any
material respects its By-laws, other than the Charter Amendment and an
amendment to Parent's By-laws to satisfy the condition contained in
Section 7.2(e);
(iv) acquire, merge or consolidate with, or purchase a portion of
the assets of or equity in, any corporation, partnership, association or
other business organization or division thereof or otherwise acquire any
assets, in each case that involves a transaction exceeding $50,000 in the
aggregate, or engage in any negotiations with any person or entity
concerning any such transaction; PROVIDED, HOWEVER, that the Company
and Parent may acquire Oil and Gas Interests in the ordinary course of
business consistent with past practice;
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(v) except in the ordinary course of business, sell, lease or
otherwise dispose of or agree to sell, lease or otherwise dispose of, any
business or line of business or any of its assets, in each case that are
material, individually or in the aggregate, to the Company and its
Subsidiaries taken as a whole, or to Parent and its Subsidiaries taken as
a whole, respectively;
(vi) make any capital expenditures, except in the ordinary course
of business;
(vii) (A) pay, discharge, or satisfy any material claims,
liabilities, or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), except for the payment, discharge or
satisfaction of its liabilities or its obligations in the ordinary course
of business or in accordance with their terms as in effect on the date
hereof; (B) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution,
restructuring, recapitalization or reorganization; (C) enter into any
collective bargaining agreement, successor collective bargaining agreement
or amended collective bargaining agreement; (D) change any accounting
principle used by it, except for such changes required to be implemented
prior to the Effective Time pursuant to generally accepted accounting
principles or rules of the SEC; or (E) settle or compromise any litigation
brought against it, other than settlements or compromises of any
litigation where the amount paid in settlement or compromise (including
without limitation the cost to Parent and its Subsidiaries or the Company
and its Subsidiaries, as the case may be, of complying with any provision
of such settlement or compromise other than cash payments) does not exceed
$200,000, exclusive of amounts covered by insurance;
(viii) (A) enter into any new, or amend any existing, severance
agreement or arrangement, deferred compensation arrangement or employment
agreement with any officer, director or employee, except that, subject to
Section 6.13(e), Parent and the Company may hire additional employees to
the extent deemed by their respective managements to be in the best
interests of Parent or the Company, as the case may be, PROVIDED, that
neither the Company nor Parent may enter into any employment or severance
agreement or any deferred compensation arrangement with any such
additional employees, (B) adopt any new, or amend any existing, incentive,
retirement or welfare benefit arrangements, plans or programs for the
benefit of current, former or retired employees (other than amendments
required by
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law or to maintain the tax qualified status of such plans under the Code),
or (C) grant any increases in employee compensation, other than in the
ordinary course or pursuant to promotions, in each case consistent with
past practice (which shall include normal individual periodic performance
reviews and related compensation and benefit increases and bonus payments
and awarded under existing plans and forgiveness of employee indebtedness
incurred in connection with relocation loans made under existing
policies);
(ix) except in the ordinary course of business consistent with past
practice, (y) incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any debt securities or guarantee any
debt securities of others or (z) make any loans, advances or capital
contributions to, or investments in, any other person, other than to the
Company or any wholly-owned Subsidiary of the Company or to Parent or any
wholly-owned Subsidiary of Parent, respectively; or
(x) authorize or enter into any agreement to do any of the
foregoing.
(b) ADVICE OF CHANGES. Each of the Company and Parent shall
promptly advise the other such party orally and in writing of any change or
event which would have a Material Adverse Effect on the Company or Parent,
respectively.
Section 5.2 NO SOLICITATION. From and after the date hereof, the
Company will not, and will cause its Subsidiaries and its officers, directors,
employees, agents and other representatives and those of any of its Subsidiaries
not to, directly or indirectly, solicit or initiate any takeover proposal or
offer for the Company, and not to solicit or initiate, directly or indirectly,
discussions, negotiations, considerations or inquiries concerning a takeover
proposal or offer for the Company, from any person, or engage in discussions or
negotiations relating thereto, or provide to any other person any information or
data relating to the Company or its Subsidiaries for the purpose of, or have any
substantive discussions with, any person relating to, or otherwise cooperate
with or assist or participate in, or facilitate, any takeover proposal or offer
or any inquiry or proposal which would reasonably be expected to lead to any
effort or attempt by any other person to seek to effect a takeover proposal or
offer, or agree to or endorse any such inquiry, takeover proposal or offer;
PROVIDED, HOWEVER, that (i) the Company may engage in discussions or
negotiations with a third party who, without the Company taking any action which
is proscribed as provided above in this Section 5.2, seeks to initiate such
discussions or negotiations or may furnish such third party information
concerning the Company and its business, properties or assets (provided that
such third party executes a
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confidentiality agreement with the Company) and (ii) the Company's Board of
Directors may take and disclose to the Company's stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, but
in each case referred to in the foregoing clauses (i) and (ii) only to the
extent that a majority of the Board of Directors of the Company shall conclude
in good faith, after consultation with and based upon the written advice of
Sidley & Austin or Richards, Layton & Finger (which advice need not constitute
an opinion), that such action is necessary in order for the Board of Directors
of the Company not to breach its fiduciary obligations under applicable law.
The Company will promptly (but in no case later than 24 hours) notify Parent of
any inquiry, takeover proposal or offer for the Company, including the material
terms and conditions thereof, but shall not be required to indicate the identity
of the person or group making such takeover proposal or offer. It is agreed and
understood that any termination of this Agreement shall be solely pursuant to
Section 8.1 and that, prior to any such termination, the Company shall not enter
into any written agreement with any person that provides for, or in any way
facilitates, a takeover proposal or offer, other than a confidentiality
agreement. Except as permitted by this Section 5.2, the Company and its
Subsidiaries and their officers, directors, employees, agents and other
representatives will immediately cease the Company's or its Subsidiaries'
existing discussions, negotiations and other activities with any parties (other
than Parent) relating to any possible takeover proposal or offer. As used in
this Agreement, "takeover proposal" or "offer" shall mean any proposal or offer
(other than a proposal or offer by Parent or any of its affiliates) for a tender
or exchange offer, a merger, consolidation or other business combination
involving the Company or any Subsidiary of the Company, or any proposal to
acquire in any manner a substantial equity interest in, or a substantial portion
of the assets of, the Company or any of its Subsidiaries. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
this Section 5.2 by any officer or director or authorized employee, agent or
representative of the Company or any of its Subsidiaries shall be deemed to be a
breach of this Section 5.2 by the Company.
Section 5.3 POOLING OF INTERESTS; REORGANIZATION. During the
period from the date of this Agreement through the Effective Time, unless the
other parties shall otherwise agree in writing, none of Parent, Sub, any other
Subsidiary of Parent, the Company nor any Subsidiary of the Company shall (a)
knowingly take or fail to take any action which action or failure to act would
jeopardize the treatment of Sub's combination with the Company as a pooling of
interests for accounting purposes or (b) knowingly take or fail to take any
action which action or failure to act would jeopardize qualification of the
Merger as a reorganization within the meaning of Section 368(a) of the Code.
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Section 5.4 CONDUCT OF BUSINESS OF SUB PENDING THE MERGER.
During the period from the date of this Agreement through the Effective Time,
Sub shall not engage in any activities of any nature except as expressly
provided in or contemplated by this Agreement or incident thereto.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 STOCKHOLDER APPROVAL. (a) The Company shall
promptly call a meeting of its stockholders (the "Company Stockholder Meeting")
for the purpose of voting upon the Merger and shall use its reasonable best
efforts to obtain stockholder approval of the Merger. The Company Stockholder
Meeting shall be held as soon as practicable following the date upon which the
Registration Statement becomes effective, and the Company will, through its
Board of Directors (unless the Board of Directors shall conclude in good faith,
after consultation with and based upon the written advice of Sidley & Austin or
Richards, Layton & Finger (which advice need not constitute an opinion), that
not recommending the Merger, or withdrawing or modifying any such
recommendation, is necessary in order for the Board of Directors not to breach
its fiduciary obligations under applicable law), recommend to its stockholders
the approval of the Merger and not rescind its declaration that the Merger is
fair to and advisable and in the best interest of the Company and its
stockholders; PROVIDED, HOWEVER, that any failure of the Board of Directors
of the Company to recommend the approval of the Merger, or any withdrawal or
modification of such a recommendation, shall not be deemed a violation of
Section 5.2.
(b) Parent shall promptly call a meeting of its stockholders (the
"Parent Stockholder Meeting" and, together with the Company Stockholder Meeting,
the "Stockholder Meetings") for the purpose of voting upon the Charter Amendment
and the Share Issuance and shall use its reasonable best efforts to obtain
stockholder approval of such matters. Parent will, through its Board of
Directors (unless the Board of Directors shall conclude in good faith, after
consultation with and based upon the written advice of Simpson Thacher &
Bartlett (which advice need not constitute an opinion), that not recommending
the Charter Amendment and Share Issuance, or withdrawing or modifying any such
recommendation, is necessary in order for the Board of Directors not to breach
its fiduciary obligations under applicable law), recommend to its stockholders
the approval of the Charter Amendment and the Share Issuance and not rescind its
declaration that such transactions are fair to and advisable and in the best
interest of Parent and its stockholders. The Parent Stockholder Meeting shall
be on the date of the Company Stockholder Meeting or, if such date is not
practicable, on the closest date practicable.
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Section 6.2 REGISTRATION STATEMENT AND PROXY STATEMENT. (a)
Parent and the Company shall prepare and file with the SEC as soon as
practicable a proxy statement for use at the Stockholder Meetings (the "Proxy
Statement"), and Parent shall prepare and file with the SEC as soon as
practicable the Registration Statement (including the Proxy Statement as a
prospectus therein) and shall use all reasonable efforts to have the
Registration Statement declared effective by the SEC as soon as practicable.
Parent shall also take any action required to be taken under state securities or
"Blue Sky" laws in connection with the issuance of the Parent Common Stock
pursuant to the Merger and the exercise of the Company Stock Options after the
Effective Time. The Company and Parent shall furnish each other all information
concerning the Company and the holders of Company Common Stock or Parent and the
holders of Parent Common Stock, as the case may be, required for use in the
Registration Statement and the Proxy Statement, and the Company and Parent each
shall take such other actions as the other may reasonably request in connection
with the preparation of such Registration Statement and the Proxy Statement and
the actions to be taken pursuant to this Section 6.2.
Section 6.3 ACCESS TO INFORMATION. (a) The Company shall, and
shall cause each of its Subsidiaries to, afford to Parent, and to Parent's
accountants, counsel, financial advisers and other representatives, reasonable
access and permit them to make such inspections as they may reasonably require
during the period from the date of this Agreement through the Effective Time to
all their respective properties, books, contracts, commitments and records and,
during such period, the Company shall, and shall cause each of its Subsidiaries
to, furnish promptly to Parent (i) access to each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state laws and (ii) all other information concerning
the Company, its business, properties and personnel as Parent may reasonably
request. In no event shall the Company be required to supply to Parent, or to
Parent's accountants, counsel, financial advisors or other representatives, any
information relating to indications of interest from, or discussions with, any
other potential acquirors of the Company which were received or conducted prior
to the date hereof except to the extent necessary for use in the Registration
Statement. Except as required by law, Parent will hold, and will cause its
affiliates, associates and representatives to hold, any nonpublic information in
confidence until such time as such information otherwise becomes publicly
available and shall use its reasonable best efforts to ensure that such
affiliates, associates and representatives do not disclose such information to
others without the prior written consent of the Company. In the event of
termination of this Agreement for any reason, Parent shall promptly return or
destroy all nonpublic documents so obtained from the Company or any of its
Subsidiaries and any copies made of such documents for Parent. Parent shall
not, and shall cause its affiliates, associates and representatives not
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to, use any nonpublic information regarding the Company and its Subsidiaries in
any way detrimental to the Company and its Subsidiaries.
(b) Parent shall, and shall cause each of its Subsidiaries to,
afford to the Company, and to Company's accountants, counsel, financial advisers
and other representatives, reasonable access and permit them to make such
inspections as they may reasonably require during the period from the date of
this Agreement through the Effective Time to all their respective properties,
books, contracts, commitments and records and, during such period, Parent shall,
and shall cause each of its Subsidiaries to, furnish promptly to the Company (i)
access to each report, schedule, registration statement and other document filed
by it during such period pursuant to the requirements of federal or state laws
and (ii) all other information concerning Parent, its business, properties and
personnel as the Company may reasonably request. Except as required by law, the
Company will hold, and will cause its affiliates, associates and representatives
to hold, any nonpublic information in confidence until such time as such
information otherwise becomes publicly available and shall use its reasonable
best efforts to ensure that such affiliates, associates and representatives do
not disclose such information to others without the prior written consent of
Parent. In the event of termination of this Agreement for any reason, the
Company shall promptly return or destroy all nonpublic documents so obtained
from Parent or any of its Subsidiaries and any copies made of such documents for
the Company. The Company shall not, and shall cause its affiliates, associates
and representatives not to, use any nonpublic information regarding Parent and
it Subsidiaries in any way detrimental to Parent and its Subsidiaries.
(c) No investigation pursuant to this Section 6.3 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
Section 6.4 COMPLIANCE WITH THE SECURITIES ACT; POOLING. Prior
to the Effective Time, the Company shall cause to be prepared and delivered to
Parent a list (reasonably satisfactory to counsel for Parent) identifying all
persons who, at the time of the Stockholder Meetings, may be deemed to be
"affiliates" of the Company as that term is used in paragraphs (c) and (d) of
Rule 145 under the Securities Act (the "Affiliates"). The Company shall use its
reasonable best efforts to cause each person who is identified as an Affiliate
in such list to deliver to Parent on or prior to the Effective Time a written
agreement, in the form previously approved by the parties hereto, that such
Affiliate will not sell, pledge, transfer or otherwise dispose of any shares of
Parent Common Stock issued to such possible Affiliate pursuant to the Merger,
except pursuant to an effective registration statement or in compliance with
Rule 145 or an exemption from the registration requirements of the
Securities
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Act and that such Affiliate will not sell or in any other way reduce such
Affiliate's risk relative to any shares of Parent Common Stock received in the
Merger (within the meaning of Section 201.01 of the SEC's Financial Reporting
Release No. 1), until such time as financial results (including combined sales
and net income) covering at least 30 days of post-Merger operations have been
published, except as permitted by Staff Accounting Bulletin No. 76 issued by the
SEC.
Section 6.5 STOCK EXCHANGE LISTING. Parent shall use its
reasonable best efforts to list on the NYSE, upon official notice of issuance,
the shares of Parent Common Stock to be issued in connection with the Merger and
pursuant to the Company Stock Options.
Section 6.6 FEES AND EXPENSES. (a) Whether or not the Merger is
consummated, except as provided in Section 6.6(b), all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.
(b) (i) Notwithstanding any provision in this Agreement to the
contrary, if Parent terminates this Agreement pursuant to Section 8.1(b)(i) or
8.1(e), then the Company shall pay to Parent, within five business days
following such termination, an amount in cash equal to all out-of-pocket
expenses actually and reasonably incurred by Parent and its Subsidiaries in
connection with this Agreement and the transactions contemplated hereby. In
addition, if within nine months after such termination the Company enters into
an agreement with respect to a Third Party Acquisition of the Company (the
"Company Acquisition Agreement") or there shall have occurred, or the Board of
Directors shall have recommended to the stockholders of the Company or resolved
to do so, a Third Party Acquisition, then upon the earliest of such events, the
Company shall immediately pay to Parent an amount in cash equal to $8,000,000
less the amount paid by the Company to Parent pursuant to the immediately
preceding sentence in respect of Parent's expenses.
(ii) Notwithstanding any provision in this Agreement to the
contrary, if Parent terminates this Agreement pursuant to Section 8.1(b)(ii) or
the Company terminates this Agreement pursuant to Section 8.1(c)(ii), and, in
addition, within nine months after such termination the Company enters into a
Company Acquisition Agreement or there shall have occurred, or the Board of
Directors shall have recommended to the stockholders of the Company or resolved
to do so, a Third Party Acquisition, then, upon the earliest of such events, the
Company shall immediately pay to Parent cash in the amount of $8,000,000.
(iii) Notwithstanding any provision in this Agreement to the
contrary, if Parent terminates this Agreement pursuant to Section 8.1(f)(i),
then the Company shall immediately
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pay to Parent cash in the amount of $5,000,000. In addition, if within nine
months thereafter the Company enters into a Company Acquisition Agreement or
there shall have occurred, or the Board of Directors shall have recommended to
the stockholders of the Company or resolved to do so, a Third Party Acquisition,
then upon the earliest of such events, the Company shall immediately pay to
Parent cash in the amount of $3,000,000.
(iv) Notwithstanding any provision in this Agreement to the
contrary, if the Company terminates this Agreement pursuant to Section 8.1(h) or
Parent terminates this Agreement pursuant to Sections 8.1(f)(ii) or 8.1(i), then
the Company shall immediately pay to Parent cash in the amount of $8,000,000.
(v) The Company shall in no event be obligated to make
payments under this Section 6.6(b) exceeding, in the aggregate, $8,000,000.
(c) For purposes of this Agreement, the term "Third Party
Acquisition" means the occurrence of any of the following events: (i) the
acquisition of the Company by merger, tender offer or otherwise, other than by
Parent or any of its affiliates, (ii) except as contemplated by clause (iii) of
this Section 6.6(c), the acquisition of more than 20% of the outstanding shares
of Company Common Stock (measured after such issuance), or securities
exercisable, convertible or exchangeable into more than 20% of the outstanding
shares of Company Common Stock (assuming the exercise, conversion or exchange of
such securities), or any other securities which represent, or are exercisable,
convertible or exchangeable into securities which represent, more than 20% of
the voting power of the outstanding securities of the Company (assuming the
exercise, conversion or exchange of such securities) ordinarily (absent the
occurrence of any contingency) having the right to vote in the election of
directors of the Company, by any person other than Parent or its affiliates or
(iii) the issuance to any person (other than Parent or its affiliates) of more
than 30% of the outstanding shares of Company Common Stock (measured after such
issuance), or securities exercisable, convertible or exchangeable into more than
30% of the outstanding shares of Company Common Stock (assuming the exercise,
conversion or exchange of such securities), or any other securities which
represent, or are exercisable, convertible or exchangeable into securities which
represent, more than 30% of the voting power of the outstanding securities of
the Company (assuming the exercise, conversion or exchange of such securities)
ordinarily (absent the occurrence of any contingency) having the right to vote
in the election of directors of the Company, in connection with an acquisition
by the Company of any other person or entity.
Section 6.7 COMPANY STOCK OPTIONS. No later than the Effective
Time, each option to purchase shares of Company Common Stock (a "Company Stock
Option") which is outstanding immediately
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prior to the Effective Time pursuant to the Company's stock option plans (the
"Stock Plans") shall become and represent an option to purchase the number of
shares of Parent Common Stock (a "Substituted Option") (decreased to the nearest
full share) determined by multiplying (i) the number of shares of Company Common
Stock subject to such Company Stock Option immediately prior to the Effective
Time by (ii) the Exchange Ratio, at an exercise price per share of Parent Common
Stock (rounded down to the nearest whole cent) equal to the exercise price per
share of Company Common Stock immediately prior to the Effective Time divided by
the Exchange Ratio. Parent shall pay cash to holders of Company Stock Options
in lieu of issuing fractional shares of Parent Common Stock upon the exercise of
Company Stock Options for shares of Parent Common Stock. After the Effective
Time, except as provided above in this Section 6.7, each Substituted Option
shall be exercisable upon the same terms and conditions as were applicable under
the related Company Stock Option simultaneously with the Effective Time.
Section 6.8 REASONABLE EFFORTS. Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
all 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 other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement and the prompt satisfaction of the conditions
hereto, including (a) the obtaining of all necessary actions or non-actions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings and the taking of all reasonable steps as
may be necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by any Governmental Entity, including but not limited to any filing
under the Improvements Act, (b) the obtaining of all necessary consents,
approvals or waivers from third parties, (c) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, (d) the execution and delivery of
any additional instruments necessary to consummate the transactions contemplated
by this Agreement; PROVIDED, HOWEVER, that neither of the parties shall be
under any obligation to take any action to the extent that the Board of
Directors of such party shall conclude in good faith, after consultation with
and based upon the written advice of Sidley & Austin or Richards, Layton &
Finger in the case of the Company, and Simpson Thacher & Bartlett, in the case
of Parent, (which advice in each case need not constitute an opinion), that such
action would cause a breach of that board of directors' fiduciary obligations
under applicable law, and (e) the obtaining of a written agreement, concurrently
with the execution of this Agreement or as soon as practicable thereafter, from
each of the
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individuals identified in Section 6.8 of the Parent Disclosure Schedule and
Section 6.8 of the Company Disclosure Schedule, to vote at the Stockholder
Meetings the shares of Parent Common Stock or Company Common Stock, as the case
may be, beneficially owned by such individuals in favor of this Agreement, the
Merger and the transactions contemplated hereby (in the case of the Company
Stockholder Meeting), and this Agreement, the Charter Amendment, the Share
Issuance and the transactions contemplated hereby (in the case of the Parent
Stockholder Meeting). Notwithstanding anything to the contrary in this Section
6.8, neither party shall be required to agree to, nor shall either party without
the prior consent of the other party commit to, any divestiture transaction.
Section 6.9 PUBLIC ANNOUNCEMENTS. Before issuing any press
release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, Parent and Sub, on the one hand,
and the Company, on the other hand, will consult with each other, and will
undertake reasonable efforts to agree upon the terms of such press release, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange.
Section 6.10 REAL ESTATE TRANSFER AND GAINS TAX. Parent and the
Company agree that either the Company or the Surviving Corporation will pay any
real property transfer or gains tax or similar tax, in each case attributable to
the transfer of the beneficial ownership of the Company's or its Subsidiaries'
real property, if any (collectively, the "Gains Taxes"), and any penalties or
interest with respect to the Gains Taxes, payable in connection with the
consummation of the Merger. The Company agrees to cooperate with Sub in the
filing of any returns with respect to the Gains Taxes, including supplying in a
timely manner a complete list of all real property interests held by the Company
or its Subsidiaries and any information with respect to such property that is
reasonably necessary to complete such returns. The portion of the consideration
allocable to the real property of the Company and its Subsidiaries shall be
determined by Sub or Parent in its reasonable discretion. The stockholders of
the Company shall be deemed to have agreed to be bound by the allocation
established pursuant to this Section 6.10 in the preparation of any return with
respect to the Gains Taxes.
Section 6.11 INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE.
From and after the Effective Time, Parent agrees to indemnify and hold harmless
all past and present officers and directors of the Company and of its
Subsidiaries to the full extent such persons may be indemnified by the Company
pursuant to the Company's Certificate of Incorporation and By-Laws for acts or
omissions occurring at or prior to the Effective Time and shall advance
reasonable litigation expenses incurred by such officers and directors in
connection with defending any action
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arising out of such acts or omissions. In addition, Parent will provide, or
cause the Surviving Corporation to provide, for a period of not less than six
years from the Effective Time, the Company's current directors and officers with
an insurance and indemnification policy that provides coverage for events
occurring through the Effective Time (the "D&O Insurance") that is no less
favorable than the existing policy or, if substantially equivalent insurance
coverage is unavailable, the best available coverage; PROVIDED, HOWEVER,
that Parent and the Surviving Corporation shall not be required to pay an annual
premium for the D&O Insurance in excess of two times the last annual premium
paid by the Company prior to the date hereof (which annual premium the Company
represents and warrants to have been $90,274 in the aggregate), but in such case
shall purchase as much coverage as possible for such amount.
Section 6.12 EMPLOYEE BENEFITS. At the Effective Time, all
employee benefits plans and programs shall terminate, and subject to all
applicable laws, and all vested rights and benefits of such benefit plans and
programs shall be distributed to the eligible recipients in accordance with the
terms of such plans of the Company and its Subsidiaries; PROVIDED, HOWEVER,
that with respect to the qualified benefit plans, the parties may elect prior to
the Effective Time to freeze benefit accruals in lieu of terminating the plans
as of the Effective Time. The officers and employees of the Company and its
Subsidiaries shall be provided with employee benefits under plans and programs
which, in the aggregate, are no less favorable than those provided pursuant to
the plans and programs of Parent and its Subsidiaries in effect on the date
hereof (including but not limited to stock option, incentive compensation,
deferred compensation, pension, life insurance, medical, profit sharing
(including 401(k)), severance, salary continuation and fringe benefits). If
Parent or any of its Subsidiaries shall at any time provide benefits to retirees
of Parent or any of its Subsidiaries, retirees of the Company and its
Subsidiaries shall be provided benefits which, in the aggregate, are no less
favorable than those provided to retirees of Parent and its Subsidiaries. For
purposes of eligibility to participate in and vesting in all benefits provided
to retirees, officers and employees, individuals who are retirees, officers and
employees of the Company and its Subsidiaries as of the Effective Time or who
are thereafter employed pursuant to Section 6.13(e) will be credited with their
years of service with the Company and its Subsidiaries and years of service with
prior employers to the extent service with prior employers is taken into account
under analogous plans of the Company. With respect to officers or employees of
the Company or its Subsidiaries at the Effective Time who become eligible to
participate in the medical plan of Parent, (i) no condition that was eligible
for coverage under any medical plan of the Company shall be excluded from
coverage under the medical plan of Parent as a pre-existing condition and (ii)
amounts paid before the Effective Time by officers and employees of the Company
under any medical plans of the Company with
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respect to the plan year containing the Effective Time shall after the Effective
Time be taken into account in applying deductibles and maximum out-of-pocket
limits applicable under the medical plan of Parent provided as of the Effective
Time with respect to the balance of such plan year to the same extent as if such
amounts had been paid under such medical plan of Parent.
Section 6.13 STAY BONUSES; MERIT BONUSES; SEVERANCE POLICY.
(a) From the date hereof up to the Effective Time, after consultation with
Parent, the Company shall be permitted to offer and pay bonuses, in addition to
any bonuses or payments pursuant to any existing bonus or incentive plans of the
Company, payable to (i) non-officer employees who remain in the employ of the
Company or its Subsidiaries until a date set by the Company, which date shall be
no earlier than the date three months after the Effective Time ("Company Stay
Bonuses"), or (ii) non-officer employees whose performance and dedication to the
Company or its Subsidiaries merits, in the discretion of the Chief Executive
Officer of the Company, special compensation ("Company Merit Bonuses");
PROVIDED, HOWEVER, that the aggregate amount paid by the Company pursuant to
such Company Stay Bonuses and Company Merit Bonuses shall be no greater than
$625,000.
(b) From the date hereof up to the Effective Time, after
consultation with the Company, Parent shall be permitted to offer and pay
bonuses, in addition to any bonuses or payments pursuant to any existing bonus
or incentive plans of Parent, payable to (i) non-officer employees who remain in
the employ of Parent or its Subsidiaries until a date set by Parent, which date
shall be no earlier than the date three months after the Effective Time ("Parent
Stay Bonuses"), or (ii) non-officer employees whose performance and dedication
to Parent or its Subsidiaries merits, in the discretion of the Chief Executive
Officer of Parent, special compensation ("Parent Merit Bonuses"); PROVIDED,
HOWEVER, that the aggregate amount paid by Parent pursuant to such Parent Stay
Bonuses and Parent Merit Bonuses shall be no greater than $625,000.
(c) With respect to officers and employees who are or will be
terminated, Parent shall maintain the Company's severance policy as in effect on
the date hereof, or shall replace such policy with a policy providing equal or
more favorable compensation, for a period of at least two years from the
Effective Time.
(d) Parent shall honor or cause to be honored all severance and
employment agreements that existed as of February 15, 1995 with the Company's
officers and employees. The Company has provided to Parent a true, correct and
complete copy of each such severance agreement and employment agreement with the
Company's officers and employees. The Company represents and warrants that it
has not entered into any such severance or employment agreements after
February 15, 1995.
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(e) To the extent not inconsistent with any applicable law or
regulation, for one year after the Effective Time, before filling any job
vacancy or newly created position, Parent and its Subsidiaries will undertake
reasonable efforts to send written notification of such vacancy or position to
any officers or employees of the Company and its Subsidiaries who were
terminated subsequent to the Effective Time by the Company, the Parent, or a
Subsidiary of either of them and who had been employed in a comparable position
at the Effective Time. Determination of a comparable position shall be solely
in the reasonable discretion of the Parent and its Subsidiaries. Any such
notice will be sent to the address of the employee last appearing on the records
of the Company. Upon sending any such notice, the Company shall have satisfied
its obligations hereunder.
In addition to the matters set forth above, if any former employee
of the Company or its Subsidiaries is hired by Parent or its Subsidiaries in
accordance with this Section 6.13(e) within one year after the Effective Time,
the years of service of such employee with the Company, its Subsidiaries and any
prior employer shall be credited for purposes of eligibility and vesting as
provided in Section 6.12 and, in the case of employment opportunities requiring
a relocation of the employee's place of residence, such employee will be
provided relocation expenses and reimbursement under Parent's reimbursement
policy for transferred or newly hired employees in effect on the date hereof.
(f) Promptly after the Effective Time, Parent and its Subsidiaries
shall enter into an agreement with a professional outplacement agency to provide
reasonable and customary outplacement services ("Outplacement Services") to
officers and employees of the Company and its Subsidiaries who are terminated as
a result of, or within eighteen months following, the Merger, which Outplacement
Services provided to Senior Management shall include one-on-one counseling and
assistance; PROVIDED, HOWEVER, that the aggregate amount paid by the Parent
and its Subsidiaries in connection with such Outplacement Services shall be no
greater than $100,000. For purposes of this Section 6.13(f), "Senior
Management" means those individuals identified in Section 6.13(f) of the Company
Disclosure Schedule.
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment or waiver (where permissible) at or prior to the
Effective Time of each of the following conditions:
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(a) STOCKHOLDER APPROVAL. The Merger shall have been approved by
the requisite vote of the holders of Company Common Stock, and the Charter
Amendment and Share Issuance shall have been approved by the requisite vote of
the holders of Parent Common Stock.
(b) NYSE LISTING. The Parent Common Stock issuable in the Merger
and pursuant to the Company Stock Options shall have been authorized for listing
on the NYSE, upon official notice of issuance.
(c) IMPROVEMENTS ACT WAITING PERIOD. The applicable waiting
period under the Improvements Act shall have expired or been terminated.
(d) REGISTRATION STATEMENT. The Registration Statement shall
have become effective in accordance with the provisions of the Securities Act.
No stop order suspending the effectiveness of the Registration Statement shall
have been issued by the SEC and remain in effect. All necessary state
securities or "Blue Sky" authorizations shall have been received.
(e) NO ORDER. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of prohibiting the Merger or the transactions contemplated hereby;
PROVIDED that, in the case of any such decree, injunction or other order, each
of the parties shall have used reasonable best efforts to prevent the entry of
any such injunction or other order and to appeal as promptly as practicable any
decree, injunction or other order that may be entered.
(f) OTHER APPROVALS. All authorizations, consents, orders,
declarations or approvals of, or filings with, or terminations or expirations of
waiting periods imposed by, any Governmental Entity, the failure to obtain which
would have a Material Adverse Effect on Parent (assuming the Merger had taken
place) shall have been obtained, shall have occurred or shall have been filed.
Section 7.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following additional
conditions; PROVIDED that the Company may waive any of such conditions in its
sole discretion:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND WARRANTIES.
Parent and Sub shall have performed in all material respects each of their
agreements contained in this Agreement required to be performed on or prior to
the Effective Time, each of the representations and warranties of Parent and Sub
contained
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in this Agreement that is qualified by materiality shall be true and correct on
and as of the Effective Time as if made on and as of such date and each of the
representations and warranties that is not so qualified shall be true and
correct in all material respects on and as of the Effective Time as if made on
and as of such date, in each case except as contemplated or permitted by this
Agreement.
(b) OFFICERS' CERTIFICATE. Parent shall have furnished to the
Company a certificate, dated the Effective Time, signed by the appropriate
officers of Parent, certifying to the effect that to the best of the knowledge
and belief of each of them, the conditions set forth in this Section 7.2(a) have
been satisfied in full.
(c) OPINION OF BEARMAN TALESNICK & CLOWDUS PROFESSIONAL
Corporation. The Company shall have received an opinion from Bearman Talesnick
& Clowdus Professional Corporation, dated the Effective Time, substantially to
the effect that:
(i) The incorporation, existence and good standing of Parent and
Sub are as stated in this Agreement; the authorized shares of Parent and
Sub are as stated in this Agreement; all outstanding shares of Parent
Common Stock are duly and validly authorized and issued, fully paid and
nonassessable and have not been issued in violation of any preemptive
right of any stockholders.
(ii) Each of Parent and Sub has full corporate power and authority
to execute, deliver and perform this Agreement and this Agreement has been
duly authorized, executed and delivered by Parent or Sub, as the case may
be, and (assuming due and valid authorization, execution and delivery by
the Company) constitutes the legal, valid and binding agreement of Parent
or Sub.
(iii) The execution and performance by Parent and Sub of this
Agreement will not violate the Certificates of Incorporation or By-Laws of
Parent and Sub, respectively, and, to the knowledge of such counsel, will
not violate, result in a breach of or constitute a default under any
material lease, mortgage, contract, agreement, instrument, law, rule,
regulation, judgment, order or decree to which Parent and Sub is a party
or by which they or any of their properties or assets may be bound.
(iv) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body which
has not been obtained is required on behalf of Parent and Sub for the
consummation of the transactions contemplated by this Agreement.
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(v) To the knowledge of such counsel, there are no actions, suits
or proceedings, pending or threatened against or affecting Parent, its
Significant Subsidiaries or Sub, by any Governmental Entity which seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement.
(vi) (A) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements, financial
data, statistical data and supporting schedules included therein, and
information relating to or supplied by the Company as to which such
counsel expresses no opinion) complied as to form in all material respects
with the requirements of the Securities Act and the rules and regulations
of the SEC thereunder.
(B) In the course of the preparation of the Registration Statement
and the Proxy Statement such counsel has considered the information set
forth therein in light of the matters required to be set forth therein,
and has participated in conferences with officers and representatives of
the Company and Parent, including their respective counsel and independent
public accountants, during the course of which the contents of the
Registration Statement and the Proxy Statement and related matters were
discussed. Such counsel has not independently checked the accuracy or
completeness of, or otherwise verified, and accordingly is not passing
upon, and does not assume responsibility for, the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Proxy Statement; and such counsel has relied as to materiality, to a
large extent, upon the judgment of officers and representatives of the
Company and Parent. However, as a result of such consideration and
participation, nothing has come to such counsel's attention which causes
such counsel to believe that the Registration Statement (other than the
financial statements, financial data, statistical data and supporting
schedules included therein, and information relating to or supplied by the
Company as to which such counsel expresses no belief), at the time it
became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Proxy
Statement (other than the financial statements, financial data,
statistical data and supporting schedules included therein, and
information relating to or supplied by the Company, as to which such
counsel expresses no belief), at the time the Registration Statement
became effective, at the time of mailing or at the time of the Stockholder
Meetings, included any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
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(vii) The shares of Parent Common Stock to be issued pursuant to
this Agreement will be, when so issued, duly authorized, validly issued
and outstanding, fully paid and nonassessable.
(viii) The shares of Parent Common Stock included in the
Registration Statement have been listed on the NYSE subject to official
notice of issuance and evidence of satisfactory distribution.
In rendering such opinion, counsel for Parent may rely as to matters of fact
upon the representations of officers of Parent or Sub contained in any
certificate delivered to such counsel and certificates of public officials.
Such opinion shall be limited to the General Corporation Law of the State of
Delaware and the laws of the United States of America and the State of Colorado.
(d) OPINION OF SIMPSON THACHER & BARTLETT. The Company shall
have received an opinion from Simpson Thacher & Bartlett, dated the Effective
Time, substantially to the effect that:
(i) (A) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements, financial
data, statistical data and supporting schedules included therein, and
information relating to or supplied by the Company as to which such
counsel expresses no opinion) complied as to form in all material respects
with the requirements of the Securities Act and the rules and regulations
of the SEC thereunder.
(B) In the course of the preparation of the Registration Statement
and the Proxy Statement such counsel has considered the information set
forth therein in light of the matters required to be set forth therein,
and has participated in conferences with officers and representatives of
the Company and Parent, including their respective counsel and independent
public accountants, during the course of which the contents of the
Registration Statement and the Proxy Statement and related matters were
discussed. Such counsel has not independently checked the accuracy or
completeness of, or otherwise verified, and accordingly is not passing
upon, and does not assume responsibility for, the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Proxy Statement; and such counsel has relied as to materiality, to a
large extent, upon the judgment of officers and representatives of the
Company and Parent. However, as a result of such consideration and
participation, nothing has come to such counsel's attention which causes
such counsel to believe that the Registration Statement (other than the
financial statements, financial data, statistical data and supporting
schedules included therein, and information relating to or supplied by the
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Company as to which such counsel expresses no belief), at the time it
became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Proxy
Statement (other than the financial statements, financial data,
statistical data and supporting schedules included therein, and
information relating to or supplied by the Company, as to which such
counsel expresses no belief), at the time the Registration Statement
became effective, at the time of mailing or at the time of the Stockholder
Meetings, included any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(ii) The shares of Parent Common Stock to be issued pursuant to
this Agreement will be, when so issued, duly authorized, validly issued
and outstanding, fully paid and nonassessable.
(iii) The shares of Parent Common Stock included in the
Registration Statement have been listed on the NYSE subject to official
notice of issuance and evidence of satisfactory distribution.
In rendering such opinion, counsel for Parent may rely as to matters of fact
upon the representations of officers of Parent or Sub contained in any
certificate delivered to such counsel and certificates of public officials.
Such opinion shall be limited to the General Corporation Law of the State of
Delaware and the laws of the United States of America.
(e) PARENT BOARD OF DIRECTORS. Parent's Board of Directors
shall have taken all necessary and appropriate actions to cause the number of
directors comprising the full Board of Directors of Parent at the Effective Time
to be increased by four and the vacancies thus created to be filled at the
Effective Time by the election of four new directors, each of whom shall have
been designated by the Company prior to the Effective Time.
Section 7.3 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT
the Merger. The obligations of Parent and Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
additional conditions, PROVIDED that Parent may waive any such conditions in
its sole discretion:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND WARRANTIES.
The Company shall have performed in all material respects each of its agreements
contained in this Agreement required to be performed on or prior to the
Effective Time, each of the representations and warranties of the Company
contained in this Agreement that is qualified by materiality shall be true and
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correct on and as of the Effective Time as if made on and as of such date and
each of the representations and warranties that is not so qualified shall be
true in all material respects on and as of the Effective Time as if made on and
as of such date, in each case except as contemplated or permitted by this
Agreement.
(b) THIRD PARTY CONSENTS. All required authorizations, consents
or approvals of any third party (other than a Governmental Entity), the failure
to obtain which would have a Material Adverse Effect on Parent (assuming the
Merger had taken place), shall have been obtained.
(c) ACCOUNTING. Based on the advice of Arthur Andersen LLP and
such other advice as Parent may deem relevant, Parent shall have no reasonable
basis for believing that following the Merger, the combination of the Company
and Sub may not be accounted for as a "pooling of interests" in accordance with
generally accepted accounting principles.
(d) OFFICERS' CERTIFICATE. The Company shall have furnished to
Parent a certificate, dated the Effective Time, signed by the appropriate
officers of the Company, certifying to the effect that to the best of the
knowledge and belief of each of them, the conditions set forth in this Section
7.3(a) have been satisfied.
(e) OPINION OF SIDLEY & AUSTIN. Parent shall have received an
opinion of counsel from Sidley & Austin, special counsel to the Company, dated
the Effective Time, substantially to the effect that:
(i) The incorporation, existence, good standing and capitalization
of the Company are as stated in this Agreement; the authorized shares of
Company Common Stock are as stated in this Agreement; all outstanding
shares of Company Common Stock are duly and validly authorized and issued,
fully paid and non-assessable and have not been issued in violation of any
preemptive right of stockholders; and, to the knowledge of such counsel,
there is no existing option, warrant, right, call, subscription or other
agreement or commitment obligating the Company to issue or sell, or to
purchase or redeem, any shares of its capital stock other than as stated
in this Agreement.
(ii) The Company has full corporate power and authority to execute,
deliver and perform this Agreement and this Agreement has been duly
authorized, executed and delivered by the Company, and (assuming the due
and valid authorization, execution and delivery by Parent and Sub)
constitutes the legal, valid and binding agreement of the Company.
(iii) To the knowledge of such counsel, there are no actions, suits
or proceedings, pending or threatened against
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or affecting the Company or its Significant Subsidiaries, by any
Governmental Entity which seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement.
(iv) The execution and performance by the Company of this Agreement
will not violate the Certificate of Incorporation or By-laws of the
Company.
(v) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body which
has not been obtained is required on behalf of the Company or any of its
Subsidiaries for consummation of the transactions contemplated by this
Agreement.
(vi) (A) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements, financial
data, statistical data and supporting schedules included therein, and
information relating to or supplied by Parent or Sub as to which such
counsel expresses no opinion) complied as to form in all material respects
with the requirements of the Securities Act and the rules and regulations
of the SEC thereunder.
(B) In the course of the preparation of the Registration Statement
and the Proxy Statement such counsel has considered the information set
forth therein in light of the matters required to be set forth therein,
and has participated in conferences with officers and representatives of
the Company and Parent, including their respective counsel and independent
public accountants, during the course of which the contents of the
Registration Statement and the Proxy Statement and related matters were
discussed. Such counsel has not independently checked the accuracy or
completeness of, or otherwise verified, and accordingly is not passing
upon, and does not assume responsibility for, the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Proxy Statement; and such counsel has relied as to materiality, to a
large extent, upon the judgment of officers and representatives of the
Company and Parent. However, as a result of such consideration and
participation, nothing has come to such counsel's attention which causes
such counsel to believe that the Registration Statement (other than the
financial statements, financial data, statistical data and supporting
schedules included therein, and information relating to or supplied by or
Parent or Sub, as to which such counsel expresses no belief), at the time
it became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Proxy
Statement (other than the financial statements, financial data,
statistical data and supporting schedules included
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therein, and information relating to or supplied by Parent or Sub, as to
which such counsel expresses no belief), at the time the Registration
Statement became effective, at the time of mailing or at the time of the
Stockholder Meetings, included any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, counsel for the Company may rely as to matters of
fact upon the representations of officers of the Company and its Subsidiaries
contained in any certificate delivered to such counsel and certificates of
public officials.
Such opinion should be limited to the General Corporation Law of the
State of Delaware and the laws of the United States of America.
(f) OPINION OF GENERAL COUNSEL. Parent shall have received an
opinion of counsel from Eugene A. Lang, Jr., General Counsel to the Company,
dated the Effective Time, substantially to the effect that:
(i) The incorporation, existence and good standing of Significant
Subsidiaries are as stated in this Agreement.
(ii) All of the issued and outstanding shares of capital stock of
Significant Subsidiaries are owned of record and, to the knowledge of such
counsel, beneficially by the Company, and such counsel is aware of no
liens, charges and encumbrances on any such shares.
(iii) To the knowledge of such counsel, there is no existing
option, warrant, right, call, subscription or other agreement or
commitment obligating the Company or Significant Subsidiaries to issue or
sell, or to purchase or redeem, any shares of capital stock of Significant
Subsidiaries.
(iv) The execution and performance by the Company of this Agreement
will not violate the Certificate of Incorporation or By-laws of any of the
Company's Subsidiaries, and, to the knowledge of such counsel, will not
violate, result in a breach of, or constitute a default under, any
material lease, mortgage, contract, agreement, instrument, law, rule,
regulation, judgment, order or decree to which the Company or any of its
Subsidiaries is a party or to which they or any of their properties or
assets may be bound.
(v) In the course of the preparation of the Registration Statement
and the Proxy Statement such counsel has considered the information set
forth therein in light of the matters required to be set forth therein,
and has
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participated in conferences with officers and representatives of the
Company and Parent, including their respective counsel and independent
public accountants, during the course of which the contents of the
Registration Statement and the Proxy Statement and related matters were
discussed. Such counsel has not independently checked the accuracy or
completeness of, or otherwise verified, and accordingly is not passing
upon, and does not assume responsibility for, the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Proxy Statement; and such counsel has relied as to materiality, to a
large extent, upon the judgment of officers and representatives of the
Company and Parent. However, as a result of such consideration and
participation, nothing has come to such counsel's attention which causes
such counsel to believe that the Registration Statement (other than the
financial statements, financial data, statistical data and supporting
schedules included therein, and information relating to or supplied by or
Parent or Sub, as to which such counsel expresses no belief), at the time
it became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Proxy
Statement (other than the financial statements, financial data,
statistical data and supporting schedules included therein, and
information relating to or supplied by Parent or Sub, as to which such
counsel expresses no belief), at the time the Registration Statement
became effective, at the time of mailing or at the time of the Stockholder
Meetings, included any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel for the Company may rely as to matters
of fact upon the representations of officers of the Company and its Subsidiaries
contained in any certificate delivered to such counsel and certificates of
public officials.
Such opinion should be limited to the General Corporation Law of the
State of Delaware and the laws of the United States of America and the State of
Colorado.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after any approval by the
stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
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(b) by Parent if (i) the Company shall have failed to comply in any
material respect with any of its covenants or agreements contained in this
Agreement required to be complied with by the Company prior to the date of
such termination, which failure to comply has not been cured within five
business days following receipt by the Company of notice of such failure
to comply, (ii) the stockholders of the Company shall have failed to
approve the Merger at the Company Stockholder Meeting, or (iii) the
stockholders of Parent shall have failed to approve the Charter Amendment
or the Share Issuance at the Parent Stockholder Meeting;
(c) by the Company if (i) Parent or Sub shall have failed to comply
in any material respect with any of its covenants or agreements contained
in this Agreement required to be complied with by Parent or Sub prior to
the date of such termination, which failure to comply has not been cured
within five business days following receipt by Parent of notice of such
failure to comply, (ii) the stockholders of the Company shall have failed
to approve the Merger at the Company Stockholder Meeting, or (iii) the
stockholders of Parent shall have failed to approve the Charter Amendment
or the Share Issuance at the Parent Stockholder Meeting;
(d) by either Parent or the Company if (i) the Merger has not been
effected on or prior to the close of business on December 31, 1995;
PROVIDED, HOWEVER, that the right to terminate this Agreement pursuant
to this clause shall not be available to any party whose failure to
fulfill any obligation of this Agreement has been the cause of, or
resulted in, the failure of the Merger to have occurred on or prior to the
aforesaid date, or (ii) any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency or body shall
have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling
or other action shall have become final and nonappealable;
(e) by either Parent or the Company if there has been (i) a
material breach by the other of any representation or warranty that is not
qualified as to materiality or (ii) a breach by the other of any
representation or warranty that is qualified as to materiality, in each
case which breach has not been cured within five business days following
receipt by the breaching party of notice of the breach;
(f) by Parent, (i) if the Board of Directors of the Company shall
not have recommended, or shall have resolved not to recommend, or shall
have modified or withdrawn its recommendation of the Merger or declaration
that the Merger is fair to and advisable and in the best interest of the
Company and its stockholders, or shall have resolved to do
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so, or (ii) if the Board of Directors of the Company shall have
recommended, or shall have resolved to recommend, to the stockholders of
the Company any takeover proposal or offer for the Company;
(g) by the Company if the Board of Directors of Parent shall not
have recommended, or shall have resolved not to recommend, or shall have
modified or withdrawn its recommendation of this Agreement, the Charter
Amendment and the Share Issuance or declaration that such transactions are
fair to and advisable and in the best interest of Parent and its
stockholders, or shall have resolved to do so;
(h) by the Company if there is an offer to acquire all of the
outstanding shares of Company Common Stock or substantially all of the
assets of the Company for consideration that provides stockholders of the
Company a value per share of Company Common Stock which, in the good faith
judgment of the Board of Directors of the Company, provides a higher value
per share than the consideration per share pursuant to the Merger; or
(i) by Parent, if a Third Party Acquisition occurs.
Section 8.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement by either Parent or the Company, as provided in Section 8.1,
this Agreement shall forthwith become void and there shall be no liability
hereunder on the part of the Company, Parent or Sub or their respective officers
or directors (except as set forth in the last three sentences of Section 6.3(a)
and (b), which shall survive the termination); PROVIDED, HOWEVER, that
nothing contained in this Section 8.2 shall relieve any party hereto from any
liability for any breach of this Agreement; and PROVIDED, FURTHER, that, (i)
any termination under Section 8.1(h) shall not become effective until the fee
required to be paid pursuant to Section 6.6(b)(iv) shall have been paid to
Parent, (ii) if this Agreement is terminated pursuant to Sections 8.1(b)(i) or
8.1(e), the provisions of Section 6.6(b)(i) shall survive until any payments
required to be made thereunder are made, (iii) if this Agreement is terminated
pursuant to Section 8.1(b)(ii) or Section 8.1(c)(ii), the provisions of Section
6.6(b)(ii) shall survive until any payments required to be made thereunder are
made, (iv) if this Agreement is terminated pursuant to Section 8.1(f)(i), the
provisions of Section 6.6(b)(iii) shall survive until any payments required to
be made thereunder are made, and (v) if this Agreement is terminated pursuant to
Sections 8.1(f)(ii) or 8.1(i), the provisions of Section 6.6(b)(iv) shall
survive until any payments required to be made thereunder are made.
Section 8.3 AMENDMENT. This Agreement may be amended by the
parties hereto, by or pursuant to action taken by their respective Boards of
Directors, at any time before or after approval of the Merger by the
stockholders of the Company but, after any such approval by stockholders of the
Company, no amend-
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ment shall be made which changes the Exchange Ratio as provided in Section 1.5
or which in any way materially adversely affects the rights of such
stockholders, without the further approval of such stockholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
Section 8.4 WAIVER. At any time prior to the Effective Time, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time.
Section 9.2 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
sent by overnight courier or telecopied (with a confirmatory copy sent by
overnight courier) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Barrett Resources Corporation
1125 Seventeenth Street
Suite 2400
Denver, Colorado 80202
Attention: J. Frank Keller
Executive Vice President
with copies to:
Alan L. Talesnick
Bearman Talesnick & Clowdus P.C.
1200 Seventeenth Street, Suite 2600
Denver, Colorado 80202
and
John W. Carr
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
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<PAGE>
(b) if to the Company, to
Plains Petroleum Company
12596 West Bayaud Avenue, Suite 400
Lakewood, Colorado 80228
Attention: James A. Miller, Chairman and
Chief Executive Officer
with copies to:
Eugene A. Lang, Jr.
Plains Petroleum Company
12596 West Bayaud Avenue, Suite 400
Lakewood, Colorado 80228
and
Thomas A. Cole
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Section 9.3 INTERPRETATION. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated, and the words "hereof", "herein" and "hereunder" and
similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement, unless the context otherwise requires. The table
of contents and 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 words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 9.4 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, including the documents and instruments referred to herein, (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) except for the provisions of Sections 6.11, 6.12
and 6.13 (other than Section 6.13(e)), is not intended to confer upon any person
other than the parties any rights or remedies hereunder; PROVIDED, HOWEVER,
that attorneys for the parties hereto may rely upon the representations and
warranties contained herein and in the certificates delivered pursuant to
Sections 7.2(b) and 7.3(d).
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<PAGE>
Section 9.6 GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
Section 9.7 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties, except that Sub
may assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect
wholly-owned subsidiary of Parent, but no such assignment shall relieve Sub of
any of its obligations hereunder. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 9.8 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions be consummated as originally contemplated to the
fullest extent possible.
Section 9.9 ENFORCEMENT OF THIS AGREEMENT. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
Section 9.10 JURISDICTION AND VENUE. Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the District of Colorado or any court of the State of Delaware in any
action, suit or proceeding arising from or in connection with this Agreement,
and agrees that any such action, suit or proceeding shall be brought only in
such court (and waives any objection based on FORUM NON CONVENIENS or any
other objection to venue therein).
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<PAGE>
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
BARRETT RESOURCES CORPORATION
By /s/ William J. Barrett
----------------------------
William J. Barrett
Chairman and Chief
Executive Officer
Attest:
/s/ J.F. Keller
- ---------------------------
J.F. Keller
Executive Vice President
VANILLA CORPORATION
By /s/ William J. Barrett
----------------------------
William J. Barrett
Chief Executive Officer
Attest:
/s/ J.F. Keller
- ---------------------------
J.F. Keller
Vice President and Secretary
PLAINS PETROLEUM COMPANY
By /s/ James A. Miller
----------------------------
James A. Miller
Chairman and Chief
Executive Officer
Attest:
/s/ Eugene A. Lang, Jr.
- ---------------------------
Eugene A. Lang, Jr.
Secretary
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<PAGE>
Exhibit 4.1
<PAGE>
SECOND AMENDMENT TO RIGHTS AGREEMENT
SECOND AMENDMENT, dated as of May 2, 1995 (the "Amendment"), to the
Rights Agreement, dated as of May 12, 1988, as amended as of October 19, 1994
(the "Rights Agreement"), between Plains Petroleum Company, a Delaware
corporation (the "Company"), and Chemical Bank (as successor to Manufacturers
Hanover Trust Company), a New York banking association (the "Rights Agent").
Pursuant to and in compliance with Section 26 of the Rights Agreement,
the Company and the Rights Agent desire to amend the Rights Agreement as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and in the Rights Agreement, the parties hereto
hereby agree as follows:
1. Section 1(a) of the Rights Agreement is hereby amended to add the
following at the end of the existing language thereof:
"Anything in this Agreement to the contrary notwithstanding,
"Acquiring Person" shall not include Barrett Resources Corporation, a
Delaware corporation ("Parent"), Vanilla Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent ("Sub"), or any
Affiliates or Associates of Parent or Sub, by virtue of (x) the
execution and delivery of the Agreement and Plan of Merger among
Parent, Sub and the Company, dated as of May 2, 1995 and any
amendments thereto in accordance with its terms (the "Merger
Agreement"),
<PAGE>
pursuant to which, among other things, Sub shall merge with and into
the Company (the "Merger") or (y) the consummation of the Merger and
the transactions contemplated by the Merger Agreement."
2. Section 3(c) of the Rights Agreement is hereby amended by
inserting "and as of May 2, 1995" following "May 12, 1988, as amended as of
October 19, 1994" in line 5 of the legend set forth therein.
3. Section 13(a) of the Rights Agreement is hereby amended to add the
following paragraph at the end thereof:
"Notwithstanding any other provision of this Agreement, neither
of the following events shall constitute an occurrence of the events
referred to in Section 13(a)(i), (ii) or (iii) hereof: (A) the
execution of the Merger Agreement or (B) the consummation of the
Merger."
4. The Rights Agreement is hereby amended to add a new Section 34
which shall read in its entirety as follows:
"Anything in this Agreement to the contrary notwithstanding, the
acquisition of beneficial ownership of the Common Stock of the Company
pursuant to the Merger and the consummation of the transactions
contemplated by the Merger Agreement shall not cause Parent, Sub or
any Affiliates or Associates of Parent or Sub to be deemed an
Acquiring Person or to give rise to a Distribution Date, the event
referred to in Section 11(a)(ii) hereof, any of the events referred to
in Section 13(a)(i), (ii) or (iii) hereof or a Stock Acquisition
Date."
5. The Form of Right Certificate attached to the Rights Agreement as
Exhibit B is hereby amended by inserting
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<PAGE>
after "May 12, 1988, and amended as of October 19, 1994" in line 5 thereof the
phrase "and amended as of May 2, 1995".
6. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware.
7. This Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
8. Except as expressly set forth herein, this Amendment shall not by
implication or otherwise alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Rights
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed and attested, all as of the day and year first
above written.
Attest: PLAINS PETROLEUM COMPANY
By: /s/ Eugene A. Lang, Jr. By: /s/ James A. Miller
--------------------------- -----------------------------
Name: Eugene A. Lang, Jr. Name: James A. Miller
Title: Secretary Title: Chairman of the
Board and Chief
Executive Officer
Attest: CHEMICAL BANK
By: /s/ Regina Brown By: /s/ Norman Lawrence
--------------------------- -----------------------------
Regina Brown Norman Lawrence
Assistant Manager Assistant Vice President
-4-
<PAGE>
Exhibit 99.1
<PAGE>
FOR IMMEDIATE RELEASE Contact: Donald H. Stevens Eugene A. Lang, Jr.
Barrett Resources Corp. Plains Petroleum Co.
(303) 297-3900 (303) 969-9325
BARRETT RESOURCES AND PLAINS PETROLEUM
SIGN MERGER AGREEMENT
Denver, Colo., May 3, 1995 -- Barrett Resources Corporation (NYSE: BRR)
("Barrett") and Plains Petroleum Company (NYSE: PLP) ("Plains") today announced
the execution of a definitive merger agreement pursuant to which Plains will be
merged into Barrett. The terms of the merger agreement provide that each
outstanding share of Plains common stock will be exchanged for 1.3 shares of
Barrett common stock.
The merger will take the form of a tax-free exchange and will be accounted for
as a pooling of interests. The merger has been approved by the Boards of
Directors of both companies and is subject to approval by their respective
stockholders as well as other customary conditions and approvals. At the
conclusion of the merger, Barrett will expand its Board of Directors to include
four members of Plains' Board.
William J. Barrett will remain as chairman and chief executive officer of
Barrett. William F. Wallace, president and chief operating officer of Plains,
will become vice-chairman. Paul M. Rady, Barrett's president and chief
operating officer, will continue in those positions.
"I believe that this strategic combination will enhance value for both Plains
and Barrett stockholders," said Bill Barrett. "The combined company will have a
solid foundation of stable gas production in the Mid-continent and Rocky
Mountains areas, with excellent upside potential in the Piceance, Wind River,
Arkoma, and Gulf Coast Basis. The strong financial position and substantial
cash flow of our new combined enterprise will allow us to take advantage of a
growing inventory of future exploration and development opportunities."
Mr. Barrett also stated, "We are very pleased that Bill Wallace has agreed to
serve as vice-chairman. He brings seasoned management experience and we believe
he will greatly facilitate the process of combining our companies and exploiting
the upside potential of Plains' properties."
James A. Miller, chairman and chief executive officer of Plains, noted, "We have
been looking for the right opportunity for our stockholders. Bill Barrett and
his team bring a superior exploration track record, which is reflected in the
growth prospects for Barrett. This merger will create one of the premier gas-
oriented independent exploration companies in the United States.
Plains had previously announced on March 1, 1995, the commencement of a
comprehensive process to evaluate the alternatives for the Company in a cash or
stock transaction. Miller declined to comment on the number of companies
contacted by Plains other than characterizing the process as comprehensive.
Petrie Parkman & Co. served as financial adviser to Barrett, while Plains was
advised by Goldman, Sachs & Co. and Batchelder & Partners.
Barrett's production during the three months ended March 31, 1995 was 4.3 BCF of
gas and 25,000 barrels of oil. Plains' corresponding figures were 7.4 BCF of
gas and 405,000 barrels of oil.
Barrett is a Denver-based independent natural gas and oil exploration and
production company that is also involved in gas gathering, marketing, and
trading activities.
Plains produces, develops, and explores for oil and gas in the Mid-continent,
Permian Basin, Gulf Coast, and Rocky Mountain regions of the United States. The
company is also Denver-based.
