SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
3TEC ENERGY CORPORATION
-----------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a(6)(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underling value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
<PAGE>
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed
<PAGE>
3TEC ENERGY CORPORATION
Two Shell Plaza, 777 Walker Street
Suite 2400
Houston, Texas 77002
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 14, 2000
To the Shareholders of 3TEC Energy Corporation:
A Special Meeting of Shareholders of 3TEC Energy Corporation, a Delaware
corporation ("3TEC" or the "Company"), formerly Middle Bay Oil Company, Inc.,
will be held at the principal office of the Company, Two Shell Plaza, 777 Walker
Street, Suite 2400, Houston, Texas, 77002 on Friday, January 14, 2000 at 10:00
a.m., local time, for the purpose of acting on the following matters:
(1) To consider and approve a proposed amendment to the Company's
Certificate of Incorporation to effect a one-for-three reverse
stock split of the Company's issued and outstanding shares of
common stock, $.02 par value; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of record of the Company's common stock at the close of
business on December 9, 1999, will be entitled to notice of and to vote at the
Special Meeting or any adjournments thereof, notwithstanding the transfer of any
stock on the books of the Company after such record date. A list of the
shareholders will be open to the examination of any shareholder, for any purpose
relevant to the Special Meeting, for a period of ten (10) days prior to the
meeting during regular business hours at the principal office of the Company.
You are requested to forward your proxy to the Company whether or not you
expect to attend in person to ensure that you will be represented at the Special
Meeting. Any shareholder who submits the proxy enclosed with the proxy statement
has the power to revoke such proxy at any time prior to the exercise thereof by
filing with the Company a written revocation at or prior to the Special Meeting,
by executing a proxy bearing a later date, or by attending the Special Meeting
and voting in person the shares of stock that such shareholder is entitled to
vote.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN AND RETURN THE ACCOMPANYING PROXY
FORM IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors
/s/ Floyd C. Wilson
President and
Chief Executive Officer
Houston, Texas
January 3, 2000
<PAGE>
3TEC ENERGY CORPORATION
Two Shell Plaza, 777 Walker Street
Suite 2400
Houston, Texas 77002
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 14, 2000
INTRODUCTION
This proxy statement ("Proxy Statement") is furnished to shareholders of
3TEC Energy Corporation, a Delaware corporation ("3TEC" or the "Company"),
formerly Middle Bay Oil Company, Inc., in connection with the solicitation, on
behalf of the Board of Directors of 3TEC, of proxies to be used at a Special
Meeting of Shareholders to be held at 10:00 a.m., local time, on Friday, January
14, 2000, and all adjournments thereof (the "Special Meeting") for the purposes
set forth in the accompanying Notice of Special Meeting of Shareholders.
The approximate date on which this Proxy Statement and the enclosed form of
proxy will be first sent or given to shareholders is January 3, 2000. The
principal executive offices of the Company are located at Two Shell Plaza, 777
Walker Street, Suite 2400, Houston, Texas 77002, and the main phone number of
the Company is (713) 222-6725. If necessary, please contact the Company at this
address or phone number.
PROXY; RIGHT TO REVOKE PROXY
Proxies in the form enclosed will be voted at the Special Meeting if
properly executed, returned to 3TEC before the Special Meeting and not revoked.
Any shareholder giving a proxy may revoke it at any time before the vote by
delivering to 3TEC's Secretary at the above address a written revocation, by
voting in person at the Special Meeting, or by giving a later dated proxy.
Attendance at the meeting will not by itself constitute a revocation. The shares
represented by proxies solicited by the Board of Directors will be voted in
accordance with the recommendations of the Board of Directors unless otherwise
specified in the proxy. Whenever the person solicited specifies a choice with
respect to any matter to be acted upon, the shares will be voted in accordance
with the specification so made. Arrangements will be made with brokerage houses
and other custodians, nominees and fiduciaries for the forwarding of
solicitation material to the beneficial owners of the common stock. 3TEC may
reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred in connection therewith.
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The enclosed form of proxy allows shareholders to grant or withhold
discretionary authority to the persons named to vote on any other matters that
may properly come before the Special Meeting. 3TEC is not aware of proposals
planned to be made at the Special Meeting which are not included in 3TEC's
Notice of Special Meeting of Shareholders accompanying this Proxy Statement and
has no current intention of making any additional proposals.
BY WHOM AND THE MANNER IN WHICH THIS PROXY IS BEING SOLICITED
The cost of solicitation will be paid by 3TEC. In addition to solicitation
of proxies by use of the mails, directors, officers or employees of 3TEC may,
without additional compensation, solicit proxies personally, by telephone or by
other appropriate means. 3TEC will request banks, brokerage houses and other
custodians, nominees or fiduciaries holding shares of Common Stock in their
names for others to promptly send proxy materials to, and obtain proxies from,
their principals, and 3TEC will reimburse them for their reasonable expenses in
doing so. 3TEC has not and will not engage any investment banking or brokerage
firm or any professional proxy solicitation firm to solicit proxies. No fees,
commissions or other compensation will be paid to anyone for proxy votes
solicited by 3TEC.
SHARES OUTSTANDING
Voting rights regarding the matters to be considered at the Special Meeting
are vested exclusively in the holders of 3TEC's common stock, $ .02 par value
("Common Stock"). The record date ("Record Date") for the holders of Common
Stock entitled to vote at the Special Meeting is the close of business on
December 9, 1999. At the close of business on that date, 3TEC had issued,
outstanding and entitled to vote at the Special Meeting 15,993,092 shares of
Common Stock, each of which is entitled to one vote on all matters expected to
be voted upon at the Special Meeting.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of shares of Common
Stock entitled to vote at the Special Meeting representing a majority of the
shares of outstanding Common Stock is necessary to constitute a quorum at the
Special Meeting. Each holder of Common Stock is entitled to one vote, in person
or by proxy, for each share held in such holder's name on the Record Date.
Assuming the presence of a quorum, the affirmative vote of a majority of
the holders of the Company's Common Stock is required to approve the
one-for-three reverse stock split of 3TEC's Common Stock.
Abstentions will be included in vote totals and, as such, will have the
same effect on the matter voted upon as a negative vote. Where nominee
recordholders do not vote on proposals because they did not receive specific
instructions on such proposals from the beneficial owners of such shares
("broker nonvotes"), such broker nonvotes will not be included in vote totals
and, as such, will have no effect on the action taken at the Special Meeting.
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PROPOSAL I
PROPOSAL TO APPROVE OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO EFFECT A ONE-FOR-THREE
REVERSE STOCK SPLIT
GENERAL
The Board of the Company has approved, subject to shareholder approval, a
proposed amendment to the Company's Certificate of Incorporation (the
"Amendment") which will effect a one-for-three reverse stock split (the "Reverse
Split") of the issued and outstanding shares of Common Stock. The complete text
of the Amendment is set forth as Exhibit "A" to this Proxy Statement. The
summary of the Amendment set forth below is qualified in its entirety by
reference to the full text of the Amendment attached to this Proxy Statement as
Exhibit "A". Shareholders are urged to read the agreement carefully in its
entirety.
If the Reverse Split is approved by at least a majority of the holders of
Common Stock, the Reverse Split will be effective upon the close of business on
the date of filing of the Amendment with the Delaware Secretary of State and
each certificate representing shares of Common Stock outstanding immediately
prior to the Reverse Split (the "Old Shares") will be deemed, automatically and
without any action on the part of the shareholders, to represent one-third the
number of shares of Common Stock after the Reverse Split (the "New Shares").
No fractional New Shares will be issued as a result of the Reverse Split.
If any shareholder would otherwise receive fractional shares in the Reverse
Split, the Company will make a cash payment, in lieu of issuing any fractional
share, based on the closing price of one share of Common Stock as of the close
of business on the Reverse Split Effective Date, as defined below.
The Common Stock issued pursuant to the Reverse Split will be fully paid
and nonassessable. The voting and other rights that currently characterize the
Common Stock will not be altered by the Reverse Split.
REVERSE STOCK SPLIT
PURPOSES OF THE PROPOSED REVERSE SPLIT
The Board believes that the Reverse Split is desirable for several reasons.
Since August 1998, the closing price of the Common Stock has equaled or
exceeded $5.00 on only two trading days, August 12 and August 13, 1999. It is
expected that, as a result of the Reverse Split, the market price of the Common
Stock should increase. The Board believes that this potential increase in price
should enhance the acceptability of the Common Stock by institutional investors
(many of whom will not invest in securities which trade at a price under $5 per
share), as well as the financial community and the investing public at large.
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<PAGE>
Additionally, the Board is seeking to list its Common Stock on the NASDAQ
National Market, which, among other requirements, requires that the bid price
for the applicant's shares of common stock meet or exceed $5.00 per share. The
Board believes that being a NASDAQ National Market listed company will further
enhance the Company's credibility with the financial community and the investing
public at large.
A variety of brokerage firm policies and practices tend to discourage
individual brokers within those firms from dealing with lower priced stocks.
Some of those policies and practices pertain to the payment of brokers'
commissions and to time-consuming procedures that function to make the handling
of lower priced stocks economically unattractive to brokers. In addition, the
structure of trading commissions also tends to have an adverse impact upon
holders of lower priced stock because the brokerage commission on a sale of
lower priced stock generally represents a higher percentage of the sales price
than the commission on a relatively higher priced issue. The proposed Reverse
Split should result in a price level for the Common Stock that will reduce, to
some extent, the effect of these policies and practices of brokerage firms and
diminish the adverse impact of trading commissions on the market for the Common
Stock. The expected increased price level may also encourage interest and
trading in the Common Stock and possibly promote greater liquidity in the future
for the Company's shareholders, although liquidity could be adversely affected
by the reduced number of shares outstanding after the Reverse Split is effected.
SHAREHOLDERS SHOULD NOTE THAT THE BOARD CANNOT PREDICT WHAT EFFECT THE
REVERSE SPLIT WILL HAVE ON THE MARKET PRICE OF THE COMMON STOCK. THE COMPANY IS
AWARE THAT SOME COMPANIES WHICH HAVE EFFECTED REVERSE STOCK SPLITS HAVE
EXPERIENCED A DECLINE IN THEIR AGGREGATE MARKET VALUE, AND THERE CAN BE NO
ASSURANCE THAT THE MARKET PRICE PER NEW SHARE AFTER THE REVERSE SPLIT WILL
APPROXIMATE THREE TIMES THE MARKET PRICE PER OLD SHARE BEFORE THE REVERSE SPLIT,
OR THAT ANY OF THE OTHER EFFECTS WILL OCCUR.
EFFECTING THE REVERSE SPLIT
The Reverse Split will be effected by means of filing the Amendment to the
Company's Certificate of Incorporation with the Delaware Secretary of State.
Assuming approval of the Reverse Split by the requisite vote of the shareholders
at the Special Meeting, the Amendment thereafter will be filed with the Delaware
Secretary of State as promptly as practicable, and the Reverse Split will become
effective as of the date of that filing (the "Reverse Split Effective Date").
After the Reverse Split, without any further action on the part of the Company
or the shareholders, certificates representing Old Shares will thereafter
represent New Shares equal to one-third of the number of Old Shares.
Because the number of outstanding shares of Common Stock is being reduced
by two thirds after the Reverse Split, the Company's securities which are
convertible into Common Stock or are exercisable for Common Stock and which
specifically include an adjustment feature for the conversion or the exercise,
will be adjusted to reflect the reduced number of outstanding shares of Common
Stock and higher per share conversion or exercise price.
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<PAGE>
The Company currently has authorized capital stock of 60,000,000 shares of
Common Stock and 20,000,000 shares of preferred stock. The Amendment will not
reduce the number of authorized shares of Common Stock or of preferred stock.
The number of shares of Common Stock into which the preferred stock is
convertible will be adjusted proportionately to give effect to the Reverse
Split.
As of the Record Date, the number of issued and outstanding Old Shares was
15,993,092. After the Reverse Split becomes effective, the number of issued and
outstanding New Shares as of such date would be approximately 5,331,030,
depending on the number of fractional shares purchased by the Company.
The Common Stock is currently registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") and, as a result,
the Company is subject to the periodic reporting and other requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). The Common Stock
is admitted for trading on the NASDAQ SmallCap Market. The Reverse Split will
not affect the registration of the Common Stock under the Exchange Act or its
status as a security traded on the NASDAQ SmallCap Market. As stated above, the
Company plans to file an application with the NASD to permit trading of the
Common Stock on the NASDAQ National Market.
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE SPLIT
The Company has not sought and will not seek an opinion of counsel or a
ruling from the Internal Revenue Service regarding the federal income tax
consequences of the Reverse Split. However, the Company believes that because
the Reverse Split is not part of a plan to periodically increase a shareholder's
proportionate interest in the assets or earnings and profits of the Company, the
Reverse Split will have the following effects. The combination of Common Stock
in the Reverse Split should not result in any taxable gain or loss to
shareholders for federal income tax purposes. If the Reverse Split is approved,
the tax basis of Common Stock received as a result of the Reverse Split will be
equal, in the aggregate, to the basis of the shares exchanged for the Common
Stock. For tax purposes, the holding period of the shares immediately prior to
the effective date of the Reverse Split will be included in the holding period
of the Common Stock received as a result of the Reverse Split.
This tax discussion is included for general information only and is based
on present law. Each shareholder should consult with a tax advisor to determine
the specific federal income tax consequences of the Reverse Split as it relates
to the shareholder.
HOLDING PERIOD FOR RULE 144
Rule 144, as promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), requires that a holder of restricted securities, securities
purchased directly from the Company or from an affiliate of the Company in a
private transaction, must hold the securities for a period of at least one year
prior to selling the securities in a brokerage transaction under Rule 144. The
rule further states that a shareholder who is not an affiliate of the Company,
who has held the restricted securities for a period of at least two years can
sell the securities without the restrictions of Rule 144. The Reverse Split
will not change or affect the existing holding periods of the shareholders who
hold Common Stock for Rule 144 purposes.
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<PAGE>
CERTIFICATES AND FRACTIONAL SHARES
Upon the Reverse Split Effective Date, the Old Shares will thereafter
represent New Shares equal to one-third of the number of Old Shares. The
shareholders are not required to submit their Old Shares to be exchanged for New
Shares, and New Shares will be issued in due course as old Shares are tendered
to the transfer agent for exchange or transfer. However, any shareholder
desiring to receive a certificate representing New Shares may submit a
certificate representing the Old Shares to American Stock Transfer & Trust
Company, the Company's transfer agent ("Transfer Agent") at 40 Wall Street, New
York, NY 10005, telephone number (718) 921-8220 with instructions to the
Transfer Agent to issue a new certificate. Until any exchange by the Transfer
Agent, each certificate representing Old Shares will continue to be valid and
represent New Shares equal to one-third the number of Old Shares.
No fractional shares of Common Stock will be issued. In lieu thereof,
shareholders holding a number of shares of Common Stock not evenly divisible by
three, upon surrender of their certificates representing the Old Shares to the
Transfer Agent at the address shown above, will receive a cash payment in lieu
of a fractional share based on the closing price of one share of Common Stock as
of the close of business on the Reverse Split Effective Date.
MISCELLANEOUS
Dissenting shareholders do not have appraisal rights under Delaware law or
under the Company's Certificate of Incorporation or Bylaws. The Board may
abandon the proposed Reverse Split at any time before or after the Special
Meeting and prior to the Reverse Split Effective Date if for any reason the
Board deems it advisable to abandon the proposal. The Board may consider
abandoning the proposed Reverse Split if it determines, in its sole discretion,
that the Reverse Split would adversely affect the ability of the Company to
raise capital or the liquidity of the Common Stock, among other things. In
addition, the Board may make any and all changes to the Amendment that it deems
necessary to file the Amendment with the Delaware Secretary of State to give
effect to the Reverse Split.
RECOMMENDATION AND REQUIRED VOTE
The amendment of the Certificate of Incorporation to effect a Reverse Split
requires the affirmative vote of a majority of the outstanding shares of the
Company's Common Stock. For purposes of the vote to amend the Certificate of
Incorporation, abstentions and broker non-votes will be counted as votes cast
against approval of the amendment of the Certificate of Incorporation. The
Board is of the opinion that the Amendment is advisable and in the best
interests of the Company and recommends a vote "FOR" the approval of this
Proposal. All proxies will be voted to approve the Amendment unless a contrary
vote is indicated on the enclosed proxy card.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL
OF THE AMENDMENT TO EFFECT A ONE-FOR-THREE REVERSE STOCK SPLIT, AND YOUR PROXY
WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the shares of 3TEC's Common Stock
beneficially owned by those persons known by 3TEC to be the beneficial owner of
more than five percent of 3TEC's issued and outstanding Common Stock. All
percentages are based on 15,993,092 shares of Common Stock issued and
outstanding on December 9, 1999.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- -------------------------- --------------------- -----------
<S> <C> <C>
3TEC Energy Company L.L.C. 10,482,222(1), (2) 48.26%
5910 N. Central Expressway
Suite 1150
Dallas, TX 75206
EnCap Investments L.L.C. 10,482,222(3), (2) 48.26%
1100 Louisiana
Suite 3150
Houston, TX 77002
Kaiser-Francis Oil Company 3,337,734 20.87%
6733 South Yale
Tulsa, OK 74136
Prudential Capital Group 2,325,529(6) 13.47%
751 Broad Street
Newark, NJ 07102
C. J. Lett, III 1,187,556 7.43%
9320 East Central
Wichita, KS 67206
Weskids, L.P 961,154(4) 5.97%
310 South Street
Morristown, NJ 07960
Alvin V. Shoemaker 948,634(5) 5.86%
8800 First Avenue
Stone Harbor, NJ 08247
<FN>
(1) As disclosed in a joint filing on Schedule 13D filed with the Securities
and Exchange Commission on September 10, 1999, 3TEC LLC is the
beneficial owner and has sole voting and dispositive power with respect
to 10,482,222 shares of Common Stock.
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(2) Includes 3,566,666 shares represented by subordinated notes convertible
into Common Stock and 2,160,000 shares represented by warrants to
purchase Common Stock exercisable within 60 days of this Proxy
Statement.
(3) EnCap may be deemed to share voting and dispositive power with respect
to the shares of Common Stock owned by 3TEC LLC; however, EnCap
disclaims any beneficial ownership of these shares.
(4) As disclosed in a filing on Schedule 13D filed with the Securities and
Exchange Commission on November 7, 1997; Weskids, L.P. is presently the
beneficial owner and has sole voting and disposition power of 843,687
shares of Common Stock and 117,467 shares of Series B Preferred
Stock immediately convertible into not less than 117,467 shares of
3TEC's Common Stock. Weskids, Inc. is the general partner of Weskids,
L.P. and effectively controls Weskids, L.P.
(5) As disclosed in a filing on Schedule 13D filed with the Securities and
Exchange Commission on December 23, 1997; includes 117,466 shares of
Series B Preferred Stock immediately convertible into not less than
117,466 shares of 3TEC's Common Stock. This figure also includes 66,666
shares of Common Stock, subordinated notes convertible into 50,000
shares of Common Stock, and warrants are immediately exercisable for
30,280 shares of Common Stock, all of which Mr. Shoemaker may be deemed
to share the power to vote or direct the vote and dispose or direct the
disposition of with Shoemaker Family Partners, L.P. and Shoeinvest II,
L.P.
(6) This figure includes subordinated notes convertible into 791,281 shares
of Common Stock and warrants which are immediately exercisable for
479,206 shares of Common Stock.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the shares of 3TEC's Common Stock
beneficially owned by each director and executive officer and all directors and
executive officers as a group, all as of December 9, 1999.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------------------------ --------------------- -----------
<S> <C> <C>
Floyd C. Wilson 0 (1) *
Two Shell Plaza, Suite 2400
Houston, TX 77002
David B. Miller 0 (2) *
3811 Turtle Creek Blvd., Suite 1080
Dallas, TX 75219
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D. Martin Phillips 0 (3) *
1100 Louisiana, Suite 3150
Houston, TX 77002
Frank C. Turner, II 156,522(4) *
Two Shell Plaza, Suite 2400
Houston, TX 77002
Robert W. Hammons 163,546(5) *
915 Kentbury Court
Katy, TX 77450
Gary R. Christopher 28,000(6) *
6733 South Yale
Tulsa, OK 74136
Stephen W. Herod 180,683(7) 1.13%
Two Shell Plaza, Suite 2400
Houston, TX 77002
Directors and executive officers 528,751 3.31%
of the company as a group
(7 persons)
<FN>
* Represents less than 1%.
(1) Mr. Wilson is the managing director and a member of 3TEC LLC which is
the beneficial owner of 10,482,222 of 3TEC's Common Stock.
(2) Mr. Miller is a Managing Director of EnCap, which is a member of 3TEC
LLC. EnCap may be deemed to be the beneficial owner of the 10,482,222
shares of 3TEC's Common Stock directly owned by 3TEC LLC; however, EnCap
disclaims beneficial ownership of these shares.
(3) Mr. Phillips is a Managing Director of EnCap, which is a member of 3TEC
LLC. EnCap may be deemed to be the beneficial owner of the 10,482,222
shares of 3TEC's Common Stock directly owned by 3TEC LLC; however EnCap
disclaims beneficial ownership of these shares.
(4) Represents 20,092 shares of Common Stock and 136,500 shares issuable
upon exercise of options granted to Mr. Turner.
(5) Represents 7,046 shares of Common Stock and 156,500 shares issuable upon
exercise of options granted to Mr. Hammons.
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(6) Represents 13,000 shares of Common Stock and 15,000 shares issuable upon
exercise of options granted to Mr. Christopher. Mr. Christopher is an
officer of Kaiser-Francis Oil Company which is the beneficial owner of
3,337,734 shares of 3TEC's Common Stock.
(7) Represents 109,816 shares of Common Stock and 55,000 shares issuable
upon exercise of options granted to Mr. Herod and 15,867 shares of
Series B preferred stock convertible into 15,867 shares of Common Stock.
</TABLE>
OTHER BUSINESS
The Company does not intend to bring any business before the Special
Meeting other than matters referred to in the accompanying notice and at this
date has not been informed of any matters that may be presented to the Special
Meeting by others.
DISCRETIONARY AUTHORITY
At the time of mailing this Proxy Statement, the Board of Directors was not
aware of any other matters which might be presented at the meeting. If any
matter not described in this Proxy Statement should properly be presented, the
persons named in the accompanying form of proxy will vote such proxy in
accordance with their judgment.
By Order of the Board of Directors
/s/ Floyd C. Wilson
President and
Chief Executive Officer
Houston, Texas
January 3, 2000
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
3TEC ENERGY CORPORATION
The undersigned, being the President and Secretary, respectively, of 3TEC
Energy Corporation (the "Corporation") DO HEREBY CERTIFY as follows:
1. The name of the Corporation is 3TEC Energy Corporation.
2. The Certificate of Incorporation of the Corporation is hereby
amended to effect a one (1) for three (3) reverse split of all of
the Corporation's issued common stock, par value $.02 per share (the
"Common Stock"), whereby, automatically upon the filing of this
Amendment with the Secretary of State of the State of Delaware, each
three (3) issued shares of Common Stock shall be changed into one
(1) share of Common Stock, and, in that connection, to reduce the
stated capital of the Corporation.
3. In order to effectuate the amendment set forth in Paragraph 2 above:
(a) All of the Corporation's issued Common Stock, having a par
value of $.02 per share, is hereby changed into new Common
Stock, having a par value of $.02 per share, on the basis of
one (1) new share of Common Stock for each three (3) shares
of Common Stock issued as of the date of filing of the
Amendment with the Secretary of State for the State of
Delaware, provided, however, that no fractional shares of
Common Stock shall be issued pursuant to such change. Each
Stockholder who would otherwise be entitled to a fractional
share as a result of such change shall have only a right to
receive one whole share, in lieu of any fractional share
otherwise issuable upon conversion.
(b) The Corporation's 60,000,000 authorized shares of Common
Stock, having a par value of $.02 per share, shall not be
changed;
(c) The Corporation's 20,000,000 authorized shares of preferred
stock, having a par value of $.02 per share, shall not be
changed; and
(d) The Corporation's stated capital shall be reduced by an
amount equal to the aggregate par value of the shares of
Common Stock issued prior to the effectiveness of this
Amendment which, as a result of the reverse split provided
for herein, are no longer issued shares of Common Stock.
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4. The foregoing amendments of the Certificate of Incorporation of the
Corporation have been duly adopted by the Corporation's Board of
Directors and Stockholders in accordance with the provisions of
Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned have subscribed this document on the
date set forth below.
Dated: January __, 2000 Attest:
________________________________ _________________________________
Floyd C. Wilson, President ________________________, Secretary
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PROXY
3TEC ENERGY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
3TEC ENERGY CORPORATION
The undersigned hereby appoints Floyd C. Wilson and Stephen W. Herod, and
each of them, as proxies for the undersigned, with full power in each to appoint
a substitute, and hereby authorizes each to represent and to vote, as designated
below, all shares of the $.02 par value common stock of 3TEC Energy Corporation
("3TEC" or the "Company"), which the undersigned is entitled to vote at the
Special Meeting of the Shareholders of the Company to be held at the principal
office of the Company, Two Shell Plaza, 777 Walker Street, Suite 2400, Houston,
Texas 77002 on Friday, January 14, 2000, at 10:00 a.m., local time (the
"Meeting"), or at any and all postponements, continuations or adjournments
thereof.
Only holders of record of the Company's common stock at the close of
business on December 9, 1999, will be entitled to notice of and to vote at the
Special Meeting or any adjournments thereof, notwithstanding the transfer of any
stock on the books of the Company after such record date. THIS PROXY WHEN
PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL
TO EFFECT A ONE-FOR-THREE REVERSE STOCK SPLIT. In their discretion, the proxies
named above are authorized to vote upon such other business as may properly come
before the Meeting or any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL I.
1. To consider and vote a proposed amendment to the Company's Certificate of
Incorporation to effect a one-for-three reverse stock split of the
Company's issued and outstanding shares of common stock, $.02 par value.
FOR |_| AGAINST |_| ABSTAIN |_|
|_| Mark here for address change and note below.
PLEASE READ INSTRUCTIONS ON THE REVERSE SIDE AND EXECUTE
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IMPORTANT: Before returning the Proxy, please sign your name or names on the
line(s) below exactly as shown hereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when signing.
When shares are registered in the name of joint tenants or trustees, each joint
tenant or trustee should sign.
Dated: January ___, 2000
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Authorized Signature
________________________________________
Title
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Authorized Signature
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Title
Please mark boxes /X/ in ink. Sign, date and return this Proxy Card promptly
using the enclosed envelope.
Change of Address:
______________________________
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