As filed with the Securities and Exchange Commission on April 17, 1997
Registration No. __________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COLUMBUS ENERGY CORP.
(Exact Name of Registrant as Specified in Its Charter)
Colorado 84-0891713
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1660 Lincoln Street
Suite 2400
Denver, Colorado 80264-1901
(303) 861-5252
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Harry Trueblood, Jr.
1660 Lincoln Street
Suite 2400
Denver, Colorado 80264-1901
(303) 861-5252
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to public:
From time to time after the effective date of this
Registration Statement as determined by the Selling Shareholders.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment plans,
check the following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans,
check the following box: [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Each Class Proposed Maximum Proposed Maximum
of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price(1) Registration Fee
<S> <C> <C> <C> <C>
Common Stock,
$.20 par value 450,029 Shares $9.875 $4,444,036 $1,347.00
</TABLE>
(1) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(c); based upon the average of the high and low
prices of the Registrant's Common Stock, as reported by the American
Stock Exchange, on April 14, 1997.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Subject to Completion, dated April 17, 1997
PROSPECTUS
450,029 Shares
COLUMBUS ENERGY CORP.
Common Stock
($.20 Par Value)
This Prospectus relates to 450,029 shares (the "Shares") of Common Stock,
$.20 par value per share (the " Common Stock"), of Columbus Energy Corp.
("Columbus" or the "Company"), to be offered and sold from time to time by
certain stockholders (the "Selling Shareholders") referred to in this
Prospectus. The Company has been advised that the Shares may be sold through
underwriters or dealers, through brokers or other agents, or directly to one or
more purchasers, at market prices prevailing at the time of sale or at prices
otherwise negotiated. To the extent required, the number of Shares to be sold,
the purchase price, the name of any broker-dealer, and any applicable
commissions, discounts or other items constituting compensation to such
broker-dealers with respect to a particular offering will be set forth in a
supplement or supplements to this Prospectus (each, a "Prospectus Supplement").
The aggregate proceeds to the Selling Shareholders from the sale of the Shares
so offered will be the purchase price of the Shares sold less the aggregate
commissions, discounts and other compensation, if any, paid to broker-dealers
and other expenses of the offering and sale of the Shares. See "Plan of
Distribution." The Company knows of no selling arrangement between any
broker-dealer and the Selling Shareholders. The Company will not receive any of
the proceeds from the sale of the Shares but will bear all of the expenses
thereof. See "Plan of Distribution."
The shares of the Company's Common Stock are listed on the American Stock
Exchange and the Pacific Stock Exchange under the symbol EGY. On ________, 1997
the closing sale price of the Common Stock as reported on the American Stock
Exchange was $_____ per share.
The Selling Shareholders and any broker-dealers that participate with the
Selling Shareholders in the distribution of any of the Shares may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended,
and any discount or commission received by them and any profit on the resale of
the Shares purchased by them may be deemed to be underwriting commissions or
discounts under such Act. See "Plan of Distribution."
THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
See "Risk Factors," page 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_____________, 1997
- 1 -
<PAGE>
AVAILABLE INFORMATION
Columbus is subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Information, as of particular dates, concerning directors
and officers, their remuneration, options granted to them, the principal holders
of securities of Columbus and any material interest of such persons in
transactions with Columbus is disclosed in proxy statements distributed to
shareholders and filed with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the public reference facilities
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission: Chicago Regional Office, Suite 1400, 500
West Madison, Chicago, Illinois 60661-2511; and New York Regional Office, 75
Park Place, New York, New York 10007, and copies of such material can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. The Commission maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of such Web site is http://www.sec.gov. The Company's Common Stock
is listed on the American and Pacific Stock Exchanges, and such reports, proxy
statements and other information may also be inspected at the offices of those
Exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1996; and
2. The Company's Quarterly Report on Form 10-Q for the quarter ended February
28, 1997.
3. The Company's Current Reports on Form 8-K filed January 13, 1997 and
February 12, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Shares described in this Prospectus shall be
deemed to be incorporated in and made a part of this Prospectus by reference
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statements so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
- 2 -
<PAGE>
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference herein, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into the documents that this
Prospectus incorporates). Written or telephone requests should be directed to
Columbus Energy Corp., 1660 Lincoln Street, Suite 2400, Denver, Colorado
80264-1901, Attention: H. C. Gutjahr, Secretary, (303) 861-5252.
RISK FACTORS
The securities offered by this Prospectus involve a high degree of
risk. Each prospective purchaser of the Shares offered hereby should carefully
read the entire Prospectus but should give special consideration to the risk
factors described below.
Fluctuation in Prices of Oil and Natural Gas
The Company's revenues and earnings are dependent to a large degree on
prevailing prices for oil and natural gas and the replacement of produced
reserves which are economic at those prices. For the past twenty years, oil and
natural gas prices have been volatile and are expected to continue to be so in
the future. Currently, more than 66% of the Company's revenues are derived from
the production and sale of natural gas, which in turn causes cash flow and net
earnings to be more affected by the volatility of natural gas prices than oil
prices.
Drilling Risks
The Company's oil and natural gas operations are subject to all of the
business risks typically associated with drilling for oil and natural gas. These
risks often include the expenditure of large amounts of money for identification
and acquisition of prospective leasehold acreage with no assurance that oil and
natural gas will be found in commercial quantities when a well is drilled.
Operating Hazards and Uninsured Risks
The oil and gas business involves numerous operating risks, including fire,
explosion, pipe failure, casing collapse, abnormally pressured formations, and
environmental hazards such as oil spills, natural gas leaks, and discharges of
toxic gases. The occurrence of any of these events with respect to any property
operated or owned (in whole or in part) by the Company could have a material
adverse effect on the Company's financial condition. The Company and the
operators of its properties maintain insurance in accordance with customary
industry practices and in amounts that management believes to be reasonable.
However, insurance coverage is not always economically feasible and cannot
always be obtained, without significant exclusions, in amounts sufficient to
cover all types of operational risks. The occurrence of a significant event that
is not fully insured could have a material adverse effect on the Company's
financial condition.
- 3 -
<PAGE>
Competition
The oil and natural gas industry is highly competitive. The Company
competes with others for property acquisitions and for opportunities jointly to
explore or to develop and produce oil and natural gas. The Company's competitors
include major companies and other independent energy concerns, including
individual operators. Many of these competitors have substantially greater
financial and other resources than the Company.
Potential Adverse Impact of Environmental and Other Governmental Regulation
Oil and natural gas operations are subject to various regulation and
legislation of the federal and state governments, including environmental laws.
To date, the Company has not had to expend significant resources in order to
satisfy environmental laws and regulations presently in effect. However,
compliance costs under any new laws and regulations that might be enacted could
become material. Additional matters that are, or have been from time to time,
subject to governmental regulation include land tenure, royalties, production
rates, spacing, completion procedures, water injection, unitization, and the
maximum price at which products could be sold.
Potential Adverse Effects of Weather on Results of Operations
The results of operations of Columbus can be adversely affected by
weather conditions, which can also bring about lower energy usage or increased
availability of alternative energy sources, which in turn reduces the demand for
and prices for natural gas and oil produced by the Company.
Uncertainty of Estimates of Oil and Gas Reserves and Future Net Revenues
The Company's recent annual report on Form 10-K for fiscal year 1996
contained estimates of the Company's oil and natural gas reserves and the
discounted future net revenues to be realized from those reserves, as prepared
by independent petroleum engineers, for fiscal years 1996, 1995 and 1994. There
are numerous uncertainties inherent in estimating quantities of proved oil and
natural gas reserves, including many factors beyond the control the Company. The
estimates in Form 10-K utilize assumptions that the Securities and Exchange
Commission ("SEC") requires all public companies, including Columbus, to follow,
such as using constant oil and gas prices with no escalation allowed except as
specifically provided for by contract. Such estimates are inherently imprecise
indications of future net revenues. Actual future production, revenues, taxes,
operating expenses, development expenditures and quantities of recoverable oil
and natural gas reserves might vary substantially from those estimates and
assumptions. Any significant variance in such assumptions could materially
affect the estimated quantity and value of reserves set forth in such estimates.
In addition, the Company's reserves might be subject to revision based upon
future production results, future exploitation and development successes or
failures, actual prices received and other unpredictable factors.
- 4 -
<PAGE>
Dividends
Columbus does not at this time plan to pay cash dividends on its Common
Stock, since it intends to use its available cash to expand its business.
THE COMPANY
Columbus was incorporated under the laws of the State of Colorado on
October 7, 1982. Columbus engages in the production and sale of crude oil,
condensate and natural gas, as well as the acquisition and development of
leaseholds and other interests in oil and gas properties, and also acts as
manager and operator of oil and gas properties for itself and others. It also
engages in the business of compression, transmission and marketing of natural
gas through its wholly owned subsidiary, Columbus Gas Services, Inc. ("CGSI").
The Company's principal office is located at 1660 Lincoln Street, Suite 2400,
Denver, Colorado 80264 and its telephone number is (303) 861-5252.
SELLING SHAREHOLDERS
The Selling Shareholders, whose names appear in the following table,
are all officers and directors or immediate family members of directors. Each
Selling Shareholder has held the position (or had the family relationship) set
forth below his or her name in the following table for at least the past three
years.
The following table sets forth: (i) the names and position of each
Selling Shareholder; (ii) the number of shares of Common Stock owned by them;
(iii) the number of shares underlying stock options held by them; (iv) the
number of shares to be offered by them; and (v) the number of shares and
percentage of class to be owned by them after completion of the Offering. None
of the Selling Shareholders has had any position, office or other material
relationship within the past three years with the Company or any of its
predecessors or affiliates, other than as described below.
- 5 -
<PAGE>
<TABLE>
<CAPTION>
Percent
of Class
Number of After
Number of Shares to be Completion
Number of Shares Owned Upon of the
Shares Offered in this Completion Offering (if
Name and Position Owned, Under Offering of this more than
Option Offering 1%)
========================================== ================= ====================== =================== =================
<S> <C> <C> <C> <C>
Harry A. Trueblood, Jr. - Chairman of the 810,353(1) 225,088(1) 585,265 18.9
Board, Executive Officer, and Director
Clarence H. Brown 50,576(2) 47,760(2) 2,816 nil
Executive Vice President and Director
Michael M. Logan 32,792(3) 29,443(3) 3,349 nil
Vice President
Corporate Development
Ronald H. Beck 32,667(4) 29,318(4) 3,349 nil
Vice President
Harold C. Gutjahr 21,178(5) 6,178 (5) 15,000 nil
Corporate Secretary
James P. Garrett 31,312(6) 28,240(6) 3,072 nil
Treasurer
J. Samuel Butler 16,266(7) 12,066 (7) 4,200 nil
Director
Jerol M. Sonosky 17,161(7) 12,961(7) 4,200 nil
Director
Donald W. Ringsby 28,554(7) 24,354(7) 4,200 nil
Director
Karen Ringsby 16,940 16,940 -0- nil
Wife of director
William H. Blount, Jr. 12,803(7) 8,603(7) 4,200 nil
Director
------------------ ---------------------- -------------------
1,070,602 440,951 629,651
================== ====================== ===================
<FN>
(1) Includes 25,000 shares under stock options, exercisable at $7.50 per share.
(2) Includes 47,760 shares under stock options, 19,360 exercisable at $8.4195
per share, 11,000 at $8.4659 per share, 5,400 at $7.9375 per share and
12,000 at $7.50 per share.
(3) Includes 29,024 shares under stock options, 8,000 exercisable at $7.9375
per share, 13,024 at $6.625 per share and 8,000 at $7.50 per share.
(4) Includes 29,024 shares under stock options, 8,000 exercisable at $7.9375
per share, 13,024 at $6.625 per share and 8,000 at $7.50 per share.
(5) Includes 4,000 shares under stock options exercisable at $7.50 per share.
(6) Includes 27,728 shares under stock options 7,000 exercisable at $7.50 per
share, 7,260 at $8.4195 per share, 5,500 at $8.4659 per share, 968 at
$5.8885 per share and 7,000 at $7.9375 per share.
(7) Includes 8,000 shares under stock options exercisable at $7.375 per share.
</FN>
</TABLE>
- 6 -
<PAGE>
In addition to the shares listed above, an additional 6,000
shares are being registered, which shares will be offered by approximately nine
officers and directors who are deemed affiliates of the Company and who may
acquire shares under the Company's 1993 Employee Stock Purchase Plan. Also
included are 3,078 shares underlying non-qualifying stock options held by three
employees which are exercisable at $5.8885 to $10.625 per share. Since none of
the shares are presently outstanding, the names and the amounts of shares they
will offer will be added by a Post Effective Amendment to this Prospectus.
PLAN OF DISTRIBUTION
All of the Shares offered hereby are being sold by the Selling
Shareholders. The Company will not receive any of the proceeds from the sale of
the Shares.
The Company has been advised that the Shares may be sold from
time to time by the Selling Shareholders, or by any pledgee or other successor
in interest to the Selling Shareholders, in regular brokerage transactions on a
national securities exchange or in the over-the-counter market, in transactions
directly with market makers, in privately negotiated transactions, or through a
combination of such methods at fixed prices (which may be changed), at market
prices prevailing at the time of sale, or at negotiated prices.
The Selling Shareholders, or any pledgee or other successor in
interest, may effect such transactions by selling Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders, any pledgee
or other successor in interest, or the purchasers of Shares for whom such
broker-dealers may act as agent, or to whom they sell as principal, or both
(which compensation, as to a particular broker-dealer, may be in excess of
customary commissions).The Selling Shareholders and any such underwriters,
dealers or agents that participate in the distribution of the Shares may be
deemed to be underwriters within the meaning of the Securities Act, and any
profit on the sale of the Shares by them and any discounts, commissions or
concessions received by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriters, dealers and agents
may engage in transactions with, and perform services for, the Company.
Any Shares offered hereby which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under that rule rather than pursuant to
any of the foregoing means of distribution.
At the time a particular offer of Shares is made by the Selling
Shareholders or any pledgee or other permitted assignee or other successor in
interest, to the extent required, a Prospectus Supplement will be distributed
- 7 -
<PAGE>
which will set forth the aggregate number of Shares being offered, and the terms
of the offering, including the public offering price thereof, the name or names
of any permitted assignee or other successor in interest, the name or names of
any underwriters, dealer or agents, any underwriting discounts, commissions and
other items constituting compensation from, and the resulting net proceeds to,
the Selling Shareholders or any permitted assignee or other successor in
interest, any discounts, commissions or concessions allowed or reallowed or paid
to dealers and, if applicable, the purchase price to be paid by any underwriter
for the Shares purchased from the Selling Shareholders or any permitted assignee
or other successor in interest.
Certain expenses in connection with the distribution of the
Shares, including fees and expenses of the Company's counsel and accountants,
filing fees and printing expenses, will be borne by the Company. Each Selling
Shareholder will bear his or her own legal and accounting expenses, if any, as
well as all transfer taxes, discounts, concessions, commissions or other
compensation received by broker-dealers.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 20,000,000 shares of Common
Stock and up to 5,000,000 shares of Preferred Stock, no par value ("Preferred
Stock"). The following summary of certain provisions of the Company's Amended
and Restated Articles of Incorporation and Bylaws does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
provisions of such Amended and Restated Articles of Incorporation and Bylaws,
copies of which are filed as exhibits to this Registration Statement.
Common Stock
Each share of Common Stock has one vote Subject to the
preferential rights of holders of any then outstanding Preferred Stock, the
holders of Common Stock are entitled to receive dividends when and as declared
by the Board of Directors out of funds legally available for such payment.
Holders of Common Stock have no preemptive rights to purchase additional shares.
Subject to the preferential rights of holders of any then outstanding Preferred
Stock, the holders of Common Stock are entitled to share ratably in the assets
of the Company available for distribution to stockholders in the event of the
Company's liquidation, dissolution or winding up.
The holders of Common Stock have no cumulative voting rights in
the election of directors. The Company's Amended and Restated Articles of
Incorporation also provides that the Board of Directors be divided into two
classes of approximately equal size, with one class to be elected for a two-year
term at each annual meeting of shareholders.
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<PAGE>
Preferred Stock
The Preferred Stock is issuable, from time to time, in one or more series,
with such designations, preferences and relative, participating, optional or
other special rights, qualifications, limitations or restrictions thereof as
shall be stated and expressed in a resolution or resolutions providing for the
issue of such series adopted by the Board of Directors. All shares of any one
series of the Preferred Stock are required to be identical in every particular
and all series are required to rank equally and be identical in all respects,
except insofar as they may vary with respect to matters which the Board is
expressly authorized by the Company's Amended and Restated Articles of
Incorporation to determine in the resolution or resolutions providing for the
issue of any series of the Preferred Stock. No assurance can be given that the
terms of any series of Preferred Stock will not materially limit or qualify the
rights of the holders of Common Stock. No shares of Preferred Stock have been
issued.
LEGALITY
Sherman & Howard L.L.C., 633 17th St., #3000, Denver, Colorado 80202 has
issued an opinion with respect to the Legality of the issuance of the Shares
being offered pursuant to this Prospectus.
EXPERTS
The consolidated balance sheets of Columbus Energy Corp. and subsidiaries
as of November 30, 1996 and 1995, and the consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended November 30, 1996, included in the Company's Annual Report on Form 10-K
for the fiscal year ended November 30, 1996, are incorporated by reference in
this Prospectus and have been incorporated herein in reliance on the reports of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
said firm as experts in accounting and auditing.
The results of the study and report by Reed Ferrill & Associates,
independent petroleum engineers and consultants, of the Company's reserves and a
separate report on the reserves of the properties located in the Berry Cox field
in Texas prepared by Huddleston & Co., Inc., another outside consulting firm,
appear in the Company's 1996 Form 10-K, are incorporated by reference in this
Prospectus and have been incorporated herein in reliance on the authority of
such firms as experts in petroleum engineering.
- 9 -
<PAGE>
This Prospectus contains information concerning the Company and
its Common Stock, but does not contain all of the information set forth in the
Registration Statement and the Exhibits relating thereto, which the Company has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933, and to which reference is hereby made.
TABLE OF CONTENTS Page
Page
AVAILABLE INFORMATION........................................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................2
RISK FACTORS.................................................................3
THE COMPANY .................................................................5
SELLING SHAREHOLDERS.........................................................5
PLAN OF DISTRIBUTION.........................................................7
DESCRIPTION OF CAPITAL STOCK.................................................8
LEGALITY.....................................................................9
EXPERTS......................................................................9
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
the Prospectus Supplement and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
This Prospectus or the Prospectus Supplement does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make such offer, or
in any jurisdiction where such solicitation is not authorized, or in which the
person making such offer or solicitation is not qualified to do so. Neither the
delivery of this Prospectus or the Prospectus Supplement nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained or incorporated by reference herein is correct as of any
time subsequent to its date or that there has been no change in the affairs of
the Company since such date.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Filing Fee.............................................. $1,347.00
Blue Sky Fees........................................... 0
Legal Fees.............................................. 3,000.00
Accounting Fees......................................... 3,000.00
Transfer Agent Fees..................................... 500.00
Mailing and Miscellaneous............................... 1,000.00
---------
Total $8,847.00
=========
Item 15. Indemnification of Directors and Officers
Section 7-109-102 of the Colorado Business Corporation Act (the "Act")
provides, generally, that a corporation may indemnify a person made a party to
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative and whether formal or informal
(a "Proceeding"), because the person is or was a director of the corporation or
an individual who, while serving as a director of the corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee or fiduciary or agent of another corporation or other entity or of any
employee benefit plan (a "Director"), against any obligation incurred with
respect to a Proceeding to pay a judgment, settlement, penalty, fine (including
an excise tax assessed with respect to an employee benefit plan) or reasonable
expenses incurred in the Proceeding if he conducted himself in good faith and he
reasonably believed, in the case of conduct in an official capacity with the
corporation, his conduct was in the corporation's best interests and, in all
other cases, his conduct was at least not opposed to the corporation's best
interest and, with respect to any criminal proceedings, he had no reasonable
cause to believe that his conduct was unlawful; provided, however, a corporation
may not indemnify a Director in connection with any Proceeding by or in the
right of the corporation in which the Director was adjudged liable to the
corporation or, in connection with any other Proceeding charging the Director
derived an improper personal benefit, whether or not involving actions in an
official capacity, in which Proceeding the Director was judged liable on the
basis that he derived an improper personal benefit. Any indemnification
permitted in connection with a Proceeding by or in the right of the corporation
is limited to reasonable expenses incurred in connection with such Proceeding.
Under Section 7-109-107 of the Act, unless otherwise provided in the Articles of
Incorporation, a corporation may indemnify an officer, employee, fiduciary, or
agent of the corporation to the same extent as to a Director and may indemnify
an officer, employee, fiduciary, or agent who is not a Director to a greater
extent, if not inconsistent with public policy and if provided for by its
bylaws, general or specific action of its board of directors or shareholders, or
contract.
II-1
<PAGE>
Section 7-108-402 of the Act provides, generally, that the Articles of
Incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director; except that any such
provision may not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its shareholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) acts specified in ss. 7-108-403, or (iv)
any transaction from which a director directly or indirectly derived an improper
personal benefit. Such provision may eliminate or limit the liability of a
director for any act or omission occurring prior to the date on which such
provision becomes effective.
Article VI of the Company's Amended and Restated Articles of
Incorporation (the "Articles"), provides as follows:
1. A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 7-5-114 of the Colorado
Corporation Code, or (iv) for any transaction from which the director
derived any improper personal benefit. If the Colorado Corporation Code is
amended after approval by the stockholders of this article to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Colorado
Corporation Code, as amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification.
2. A. Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or
was a director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
II-2
<PAGE>
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Colorado Corporation Code, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement), reasonably incurred or suffered
by such indemnitee in connection therewith and such indemnification shall
continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the indemnitee's heirs
or personal representative; provided, however, that except as provided in
subparagraph B. hereof with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The right to indemnification conferred in
this paragraph shall be a contract right.
B. Right of Indemnitee to Bring Suit. If a claim under subparagraph A of this
paragraph is not paid in full by the Corporation within sixty days after a
written claim has been received by the Corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period
shall be twenty days, the indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that the indemnitee has not met the
applicable standard of conduct set forth in the Colorado Corporation Code,
and (ii) any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the Corporation shall be entitled
II-3
<PAGE>
to recover such expenses upon a final adjudication that, the indemnitee has
not met the applicable standard of conduct set forth in the Colorado
Corporation Code. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such suit that
indemnification of the indemnitee is proper in the circumstances because
the indemnitee has met the applicable standard of conduct set forth in the
Colorado Corporation Code, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by
the indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right hereunder, or by the Corporation to recover
an advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be indemnified or
to such advancement of expenses under this paragraph or otherwise shall be
on the Corporation.
C. Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this paragraph shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, this Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors and does not restrict the
Corporation's right to limit the personal liability of a director to the
Corporation or to its shareholders for monetary damages for breach of
fiduciary duty as a director, or any other acts which are consistent with
the provisions of the Colorado Corporation Code as the same exists or may
hereafter be amended.
The Company has entered into indemnification agreements with each person
who is a director of the Company (each director, an "indemnitee"). The
indemnification agreements provide for indemnification against any and all
damages, judgments, settlements and costs, costs of investigation and costs of
defense of legal actions, claims, or proceedings and appeals therefrom and costs
of attachment or similar bonds which indemnitee becomes legally obligated to pay
because of any claim or claims made against indemnitee because of any act or
omission or neglect or breach of duty, including any actual or alleged error
misstatement or misleading statement, which he commits or suffers while acting
in his capacity as a director of the Company or of certain subsidiaries of the
Company and solely because of his being a director; and for the advancement or
reimbursement of reasonable expenses (including attorneys' fees) if the
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<PAGE>
indemnitee furnishes the Company a written affirmation of his good faith belief
he has met the standard of conduct permitting indemnification under applicable
law, the director furnishes the Company a written undertaking to repay the
advance if it is determined he did not meet such standard of conduct, and the
Company determines that the facts then known to those making the determination
will not preclude indemnification under Colorado law provided that the Company
shall not have determined that the director would not be permitted to be so
indemnified under applicable law.
In addition, the indemnification agreement provides that if the Company
determines that the director is not permitted to be indemnified, the director is
not required to reimburse the Company until a final judicial determination is
made with respect thereto as to which all rights of appeal therefrom have been
exhausted or lapsed and the Company is not obligated to indemnify or advance any
additional amounts to the director (unless there has been a determination by a
court of competent jurisdiction that the director would be permitted to be so
indemnified under applicable law). The indemnification agreements also entitle
the director to be paid the expense of prosecuting a claim against a company to
collect an indemnity claim or advancement of expenses from the Company. The
Company is not liable to make any payment under the indemnification agreement
(i) to the extent payment is actually made to the director under an insurance
policy; (ii) to the extent the director is entitled to indemnity and/or payment
under an insurance policy; (iii) to the extent the director is indemnified by
the Company otherwise than pursuant to the indemnification agreement; (iv) to
the extent such indemnity is prohibited under Colorado law, the Amended and
Restated Articles of Incorporation or other applicable law; (v) for an
accounting of profits made from the purchase or sale by the director of
securities of the Company within the meaning of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any state
statutory law or common law; or (vi) if a court holds that such payment is
prohibited by applicable law or is against public policy.
The Company may purchase liability insurance policies covering its
directors and officers.
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<PAGE>
Item 16. Exhibits
(a) Exhibits:
The following exhibits are filed herewith, except those exhibits marked
with an asterisk which are incorporated herein by reference as stated in the
description:
Exhibit No.
*4(a) Amended and Restated Articles of Incorporation (Exhibit 3(a) to
Registration Statement No. 33-17885). Exhibit "a" to Form 10-Q dated July
13, 1990 and Exhibit 3(1)(a) to Form 8-K dated May 11, 1995).
*4(b) Amended By-Laws (Exhibit to Form 8-K dated February 16, 1995).
5 Opinion of Sherman & Howard L.L.C.
23(a) Consent of Coopers & Lybrand L.L.P.
23(b) Consent of Reed W. Ferrill & Associates, Inc.
23(c) Consent of Huddleston & Co., Inc.
23(d) Consent of Sherman & Howard L.L.C. (included in Exhibit 5)
- --------
* Incorporated by reference to document(s) described in parentheses.
II-6
<PAGE>
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
Post-Effective Amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
Post-Effective Amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) above do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the Registration
Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such Post-Effective Amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a Post-Effective Amendment any
of the securities being registered which remain unsold at the
termination of the offering.
4. That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
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<PAGE>
such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel theter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City and County of Denver, State of Colorado on the 15 day of
April, 1997.
COLUMBUS ENERGY CORP.
By: /s/ Harry A. Trueblood, Jr.
------------------------------------
Harry A. Trueblood, Jr.
Chairman of the Board, President
and Chief Executive Officer
ATTEST:
/s/ H. C. Gutjahr
- ------------------------
H. C. Gutjahr, Secretary
(SEAL)
II-9
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harry A. Trueblood, Jr. and H. C. Gutjahr, and
each of them, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
pre-effective and post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Principal Executive Officer
/s/ Harry A. Trueblood, Jr. Chairman of the
Harry A. Trueblood, Jr. Board April 15, 1997
Principal Financial and Accounting Officer
/s/ Ronald H. Beck Vice President April 15, 1997
- --------------------------------------------
Ronald H. Beck
Majority of Board of Directors
/s/ J. S. Butler Director April 15, 1997
- --------------------------------------------
/s/ W. H. Blount, Jr. Director April 14, 1997
- --------------------------------------------
/s/Clarence H. Brown Director April 15, 1997
- --------------------------------------------
/s/ Harry A. Trueblood, Jr. Director April 15, 1997
- --------------------------------------------
II-10
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
- -----------
*4(a) Amended and Restated Articles of Incorporation (Exhibit 3(a) to
Registration Statement No. 33-17885. Exhibit "a" to Form 10-Q dated
July 13, 1990 and Exhibit 3(1)(a) to Form 8-K dated May 11, 1995).
*4(b) Amended By-Laws (Exhibit to Form 8-K dated February 16, 1995).
5 Opinion of Sherman & Howard L.L.C.
23(a) Consent of Coopers & Lybrand L.L.P.
23(b) Consent of Reed W. Ferrill & Associates, Inc.
23(c) Consent of Huddleston & Co., Inc.
23(d) Consent of Sherman & Howard L.L.C. (included in Exhibit 5)
- --------
* Incorporated by reference to document(s) described in parentheses.
<PAGE>
Columbus Energy Corp.
April 15, 1997
Page 2
EXHIBIT 5
April 15, 1997
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Re: Validity of Common Stock
Ladies and Gentlemen:
We have acted as special counsel to Columbus Energy Corp., a Colorado
corporation (the "Company"), in connection with its Registration Statement on
Form S-3 filed by the Company with the Securities and Exchange Commission on
April 17, 1997 relating to approximately 450,029 shares of the Company's Common
Stock, $.20 par value per share ("Common Stock") owned by certain selling
shareholders named in the Registration Statement (the "Selling Shareholders") or
to be acquired by the Selling Shareholders upon exercise of outstanding options
(the "Options") or pursuant to the Company's 1993 Employee Stock Purchase Plan
(the "Plan").
We have examined the Company's Amended and Restated Articles of
Incorporation, as amended, and Bylaws, and minutes of the proceedings of the
Board of Directors of the Company authorizing the grant of the Options, the
approval of the Plan and the shares to be issued pursuant to the Plan and the
issuance of the Common Stock, including Common Stock issuable upon exercise of
the Options. We have also examined such other documents and records, and we have
made such inquiries of officers and representatives of the Company as we have
deemed necessary to render the opinions set forth herein.
Based upon the foregoing examination, we advise you that in our opinion:
(1) The shares of Common Stock owned by the Selling Shareholders as of the
date hereof and being offered pursuant to the Registration Statement
have been duly authorized and are validly issued, and, to our
knowledge, fully paid and nonassessable; and
(2) The shares of Common Stock issuable upon exercise of the Options have
been duly authorized and reserved for issuance upon such exercise and,
<PAGE>
Columbus Energy Corp.
April 15, 1997
Page 2
if and when issued upon such exercise in accordance with the terms of
the Options, will be validly issued, fully paid and nonassessable.
(3) The shares of Common Stock issuable pursuant to the Plan have been
duly authorized and reserved for issuance pursuant to purchases made
under the Plan and, if and when issued upon such purchase in
accordance with the terms of the Plan, will be validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement referred to above and to the reference to our firm under the heading
"Legal Matters" in the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the Rules of the
Securities and Exchange Commission thereunder.
Yours truly,
/s/ Sherman & Howard L.L.C.
---------------------------
SHERMAN & HOWARD L.L.C.
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Columbus Energy Corp. on Form S-3 (File No. 1-9872) of our report dated February
11, 1997, on our audits of the consolidated financial statements of Columbus
Energy Corp. as of November 30, 1996 and 1995, and for each of the three years
in the period ended November 30, 1996, which report is included in the Columbus
Energy Corp. 1996 Annual Report on Form 10-K. We also consent to the reference
to our Firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
Denver, Colorado
April 14, 1997
<PAGE>
EXHIBIT 23(b)
April 11, 1997
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Reed W. Ferrill & Associates, Inc. consents to the use of its name and its
reports dated February 12, 1997 entitled "Columbus Energy Corp., Reserve and
Revenue Forecast as of November 30, 1996, Constant Prices and Costs" in whole or
in part, by Columbus Energy Corp. (Columbus) in this Form S-3 to the Securities
and Exchange Commission. We also consent to the reference to our firm under the
caption "Experts".
for and on behalf of
Reed W. Ferrill & Associates, Inc.
/s/ Reed W. Ferrill
-------------------
Reed W. Ferrill
President
RWF/mlb
<PAGE>
EXHIBIT 23(c)
April 11, 1997
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Huddleston & Co., Inc., consents to the use of its name and its report dated
January 8, 1997, entitled "Columbus Energy Corp., Berry R. Cox Field, Estimated
Reserves and Revenues, as of November 30, 1996, Constant Product Prices and
Costs" in whole or in part by Columbus Energy Corp. (Columbus) in Columbus' Form
S-3 to the Securities and Exchange Commission. We also consent to the reference
to our firm under the caption "Experts."
For and On Behalf of
HUDDLESTON & CO., INC.
/s/ Peter D. Huddleston
-----------------------
Peter D. Huddleston, P.E.
President
PDH:dl
<PAGE>
