UNITED STATES
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): October 15, 1998
STONE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-12074 72-1235413
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
625 E. KALISTE SALOOM ROAD
LAFAYETTE, LOUISIANA 70508
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (318) 237-0410
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ITEM 5. OTHER EVENTS
On October 9, 1998, the Board of Directors of Stone Energy Corporation
(the "Company") authorized the issuance of one preferred share purchase right (a
"Right") for each outstanding share of common stock, $.01 par value per share
(the "Common Shares"), of the Company. The rights will be issued on October 26,
1998 (the "Record Date") to the holders of record of Common Shares on that date.
Each Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Junior Participating Preferred Stock, par value
$.01 per share (the "Preferred Shares"), of the Company, at a price of $125.00
per one one-thousandth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") dated as of October 15, 1998 between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
Detachment of Rights; Exercise. Initially, the Rights will attach to all
Common Share certificates representing outstanding shares and no separate Right
Certificate will be distributed. The Rights will separate from the Common Shares
and a Distribution Date (as defined in the Rights Agreement) will occur upon the
earlier of (i) 10 days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the outstanding Voting Shares (as defined in the
Rights Agreement) of the Company, or (ii) 10 business days following the
commencement or announcement of an intention to commence a tender offer or
exchange offer the consummation of which would result in any person becoming an
Acquiring Person.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to the Common Shares
outstanding on October 26, 1998, by the certificates representing such Common
Shares with a copy of the Summary of Rights to Purchase Preferred Shares
included as Exhibit 4.4 hereto (the "Summary of Rights"), (ii) the Rights will
be transferred with and only with the Common Shares, (iii) new Common Share
certificates issued after October 26, 1998, upon transfer or new issuance of the
Common Shares, will contain a notation incorporating the Rights Agreement by
reference, and (iv) the surrender for transfer of any certificates for Common
Shares outstanding as of October 26, 1998, even without such notation or a copy
of the Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on September 30, 2008 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
If a person or group were to acquire 15% or more of the Voting Shares
of the Company, each Right then outstanding (other than Rights beneficially
owned by the Acquiring Person which would become null and void) would become a
right to buy that number of Common Shares (or under
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certain circumstances, the equivalent number of one one-thousandths of a
Preferred Share) that at the time of such acquisition would have a market value
of two times the Purchase Price of the Right.
If, after a person or group were to acquire 15% or more of the Voting
Shares of the Company, the Company were to be acquired in a merger or other
business combination transaction or assets constituting more than 50% of its
consolidated assets or producing more than 50% of its earning power or cash flow
were sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the Purchase Price of the Right.
Preferred Shares. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate, 1,000
times the dividend declared on the Common Shares. In the event of liquidation,
the holders of the Preferred Shares will be entitled to receive a preferential
liquidation payment equal to the greater of (i) $1,000 per share, or (ii) in the
aggregate, 1,000 times the payment made on the Common Shares. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged for or changed into other stock or securities, cash or other property,
each whole Preferred Share will be entitled to receive 1,000 times the amount
received per Common Share. Each whole Preferred Share shall be entitled to 1,000
votes on all matters submitted to a vote of the stockholders of the Company, and
Preferred Shares shall generally vote together as one class with the Common
Stock and any other capital stock on all matters submitted to a vote of
stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
Antidilution and Other Adjustments. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Exchange Option. At any time after the acquisition by a person or group
of affiliated or associated persons of beneficial ownership of 15% or more of
the outstanding Voting Shares of the Company and before the acquisition by a
person or group of 50% or more of the outstanding Voting Shares of the Company,
the Board of Directors may, at its option, issue Common Shares in
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mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common Share
for each Right, subject to adjustment.
Redemption of Rights. At any time prior to the first public
announcement that a person or group has become the beneficial owner of 15% or
more of the outstanding Voting Shares, the Board of Directors of the Company may
redeem all but not less than all the then outstanding Rights at a price of $.01
per Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
No Rights as Stockholder. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
Amendment of Rights. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during which
the Rights may be redeemed, except that after the first public announcement that
a person has become an Acquiring Person, no such amendment may materially and
adversely affect the interests of the holders of the Rights. Furthermore, the
Rights Agent must consent to any supplement or amendment which alters the Rights
Agent's rights or duties under the Rights Agreement.
The foregoing description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, form of
Certificate of Designations of Junior Participating Preferred Stock, form of
Right Certificate, and the form of the Summary of Rights, filed as exhibits
hereto and incorporated by reference herein.
In connection with the execution and delivery of the Rights Agreement,
Stone issued the press release filed herewith as Exhibit 99.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits as follows:
4.1 Rights Agreement, dated as of October 15, 1998, between the Company and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent, specifying
the terms of the Rights, which includes the form of Certificate of
Designation of Junior Participating Preferred Stock as Exhibit A, the
form of Right Certificate as Exhibit B and the form of the Summary of
Rights to Purchase Preferred Shares as Exhibit C.*
4.2 Form of Certificate of Designation of Junior Participating Preferred
Stock (Exhibit A to the Rights Agreement filed as Exhibit 4.1 hereto)
setting forth the terms of the Junior Participating Preferred Stock,
par value $.01 per share.*
4.3 Form of Right Certificate (Exhibit B to the Rights Agreement filed as
Exhibit 4.1 hereto). Pursuant to the Rights Agreement, printed Right
Certificates will not be delivered until as soon as practicable after
the Distribution Date.*
4.4 Form of Summary of Rights to Purchase Preferred Shares (Exhibit C to
the Rights Agreement filed as Exhibit 4.1 hereto) which, together with
certificates representing the outstanding Common Shares of the Company,
shall represent the Rights prior to the Distribution Date.*
99 Press release, dated October 15, 1998.
* Incorporated by reference to the Company's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission on October
15, 1998 (File No. 001-12074).
All other items of this report are inapplicable.
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SIGNATURE
Pursuant to the requirements of Section 12 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.
Dated: October 15, 1998
STONE ENERGY CORPORATION
By: /s/ D. Peter Canty
___________________________
Name: D. Peter Canty
Title: President
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EXHIBIT INDEX
Exhibit No. Description
4.1 Rights Agreement, dated as of October 15, 1998,
between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, specifying the
terms of the Rights, which includes the form of
Certificate of Designation of Junior Participating
Preferred Stock as Exhibit A, the form of Right
Certificate as Exhibit B and the form of the Summary
of Rights to Purchase Preferred Shares as Exhibit C.*
4.2 Form of Certificate of Designation of Junior
Participating Preferred Stock (Exhibit A to the
Rights Agreement filed as Exhibit 4.1 hereto) setting
forth the terms of the Junior Participating Preferred
Stock, par value $.01 per share.*
4.3 Form of Right Certificate (Exhibit B to the Rights
Agreement filed as Exhibit 4.1 hereto). Pursuant to
the Rights Agreement, printed Right Certificates will
not be delivered until as soon as practicable after
the Distribution Date.*
4.4 Form of Summary of Rights to Purchase Preferred
Shares (Exhibit C to the Rights Agreement filed as
Exhibit 4.1 hereto) which, together with certificates
representing the outstanding Common Shares of the
Company, shall represent the Rights prior to the
Distribution Date.*
99 Press release, dated October 15, 1998.
* Incorporated by reference to the Company's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission on
October 15, 1998 (File No. 001-12074).
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EXHIBIT 99
FOR IMMEDIATE RELEASE
STONE ENERGY CORPORATION ADOPTS
STOCKHOLDER RIGHTS PLAN AND BYLAW AMENDMENTS
Contact:
October 15, 1998 Michael L. Finch
Lafayette, Louisiana Chief Financial Officer
NYSE:SGY (318)237-0410
Stone Energy Corporation ("the Company") announced that its
Board of Directors (the "Board") has adopted a stockholder rights plan and
certain bylaw amendments which are designed to improve the ability of the Board
to protect and advance the interests of its stockholders in the event of a
proposed takeover of the Company. The rights will be issued on October 26, 1998
to stockholders of record on that date, and will expire on September 30, 2008.
The plan provides for the issuance of one right for each
outstanding share of the Company's common stock. The rights would become
exercisable only if a person or group (the "acquiring party") acquires 15% or
more of the Company's outstanding voting stock or announces a tender or exchange
offer that would result in ownership of 15% or more of its voting stock. In
those circumstances, each right would entitle holders, other than the acquiring
party, to purchase shares of the Company's common stock for a price equal to
one-half of their market value. The Board may amend the plan at any time and may
elect to redeem the rights prior to the acquisition of 15% or more of the
Company's stock by an acquiring party.
The plan includes other customary provisions which are
intended to discourage an acquiring party from seeking control by other means,
such as through a merger transaction. In addition to the adoption of the plan,
the Board approved certain amendments to the Company's bylaws to give the Board
more control in the event of a proposed takeover. The amendments include advance
notice for stockholder proposals and director nominees, limitations on the
calling of special meetings and an 80% voting requirement for the amendment of
certain bylaws. The bylaw amendments were effective as of October 9, 1998.
The stockholder rights plan is not being adopted in response
to any pending takeover threat to the Company, nor is it intended to prevent a
takeover on terms that are fair and in the best interests of the Company's
stockholders. Since the rights may be redeemed by the Board under certain
circumstances, their existence should not interfere with any merger or other
business combination approved by the Board. The issuance of the rights does not
in any way diminish the financial strength of the Company or interfere with its
business plans. The issuance of the rights has no dilutive effect, will not
affect reported earnings per share, and will not change the way its common stock
is currently traded.
Stone Energy is an independent oil and gas company
headquartered in Lafayette, Louisiana, and is engaged in the acquisition,
exploitation and operation of oil and gas properties located in the Gulf Coast
Basin.
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