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EXHIBIT 2.2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
VICTORIA DIVISION
IN RE: (S)
(S)
SOUTHERN MINERAL CORPORATION, (S) CASE NO. 99-60359-V2-11
SMC PRODUCTION COMPANY, (S) CASE NO. 99-60360-V2-11
AMERAC ENERGY CORPORATION, (S) CASE NO. 99-60361-V2-11
BEC ENERGY, INC., (S) CASE NO. 99-60362-V2-11
SMC ECUADOR, INC., (S) CASE NO. 99-60363-V2-11
(S)
Debtors. (S) Jointly Administered Under
(S) CASE NO. 99-60359-V2-11
MODIFICATION TO DEBTORS'
SECOND AMENDED PLAN OF REORGANIZATION
FILED MAY 2, 2000
Dated June 19, 2000
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The Debtors' Second Amended Plan of Reorganization filed May 2, 2000
("Plan") is hereby amended as follows:
Section 1. Amendment to Article I.
Article I.D. of the Plan is deleted in its entirety and replaced by the
following Article I.D.:
The Plan provides for the full satisfaction of Allowed Claims of the
Creditor Classes defined below. Unsecured Creditors, other than holders of
Debentures, will receive periodic cash payments in the full amount of their
Allowed Claims. Holders of Debentures will receive a single cash payment and
New Common Stock in exchange for the Debentures. The Bank Secured Claim will be
refinanced and paid from the proceeds of the Take-out Loan. The holders of
shares of Southern Mineral Common Stock will retain ownership of those shares,
subject to a one-for-five reverse stock split.
Section 2. Amendments to Article III.
(a) Article III.B.2. of the Plan is deleted in its entirety and replaced by the
following Article III.B.2.:
Class 2 - Bank Secured Claims
The Secured Claims of the Class 2 Creditors shall be fully
satisfied in the following manner:
a. The principal balance of the Bank Secured Claim due and owing
on the Effective Date will be paid in full contemporaneous with the
funding of the Take-out Loan.
b. Accrued and unpaid interest computed at the non-default
contractual rate of interest on the principal balance of the Bank
Secured Claim paid pursuant to a. above, which interest is due and
owing at the time that the Bank Secured Claim is paid in full,
contemporaneous with the funding of the Take-out Loan.
c. The following other amounts due and owing with respect to the
Bank Secured Claim owed to the Class 2 Creditors and not satisfied as
provided in a. and b. above, shall be satisfied by payment made
contemporaneous with the funding of the Take-out Loan, except for iv
below which shall be satisfied by payment made on or before ten (10)
Business Days following the funding of the Take-out Loan:
i. pre-petition attorneys' fees and expenses in the total amount of
$21,973.80;
ii. pre-petition costs paid post-petition in the total amount of
$31,366.49;
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iii. post-petition attorneys' fees and expenses through May 31, 2000
in the total amount of $126,678.96;
iv. reasonable post-petition attorneys' fees and expenses from June
1, 2000 until the Bank Secured Claim is paid in full; and
v. additional post-petition interest of 3.5% (350 basis points) on
the principal balance of the Bank Secured Claim in the amount of
$1,540.425991 per diem.
(b) Article III.B.4.b. of the Plan is deleted in its entirety and
replaced by the following Article III.B.4.b.:
Each holder of an Allowed Unsecured Class 4 Claim shall receive a
pro rata distribution of the New Common Stock.
(c) Article III.B.4.c. of the Plan is deleted in its entirety and
replaced by the following Article III.B.4.c.:
Each holder of an Allowed Unsecured Class 4 Claim will receive
their pro rata share of the Cash Payment and New Common Stock in an
amount determined by multiplying the Cash Payment and the amount of
New Common Stock being issued pursuant to the Plan by a fraction the
numerator of which is the amount of the Allowed Debenture Claim of
each individual debenture holder entitled to a distribution pursuant
to the Plan and the denominator of which is the total of all Allowed
Unsecured Convertible Debenture Claims.
Section 3. Amendments to Article IV.
(a) Article IV.B.2 of the Plan is deleted in its entirety and replaced
by the following Article IV.B.2.:
Amended Articles of Incorporation and Amended ByLaws
The Amended Articles of Incorporation and Amended ByLaws of the
Reorganized Southern Mineral will include any and all amendments necessary to
satisfy, implement and give effect to the provisions of the Plan and the
Bankruptcy Code and shall include, among other things, a provision
prohibiting the issuance of non-voting equity securities. The Amended
Articles of Incorporation and Amended ByLaws will be filed in a Plan
Supplement. Consistent with the Plan, the Amended Articles of Incorporation
shall also include, among other things, a provision authorizing the issuance
of the New Common Stock and increasing (prior to giving effect to the 1:5
reverse stock split contemplated by ARTICLE IV.D.3) the authorized Common
Stock to 75,000,000 authorized shares of Common Stock.
(b) Article IV.D.1. of the Plan is deleted in its entirety and replaced
by the following Article IV.D.1.:
Terms of New Common Stock
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a. Amount
After giving effect to the 1:5 reverse stock split contemplated
in Article IV.D.3., Reorganized Southern Mineral will issue the New
Common Stock representing 78% of the Common Stock on a fully diluted
basis as of the Effective Date. In calculating the amount of fully
diluted Common Stock, no option or warrant with an exercise price of
$1.00 or greater will be included in such computation.
b. Authorization
As of the Consummation Date, the issuance by Reorganized Southern
Mineral of the shares of New Common Stock is hereby authorized without
further act or action under applicable law, regulation, order or rule.
c. Issuance
The New Common Stock authorized pursuant to Article IV.D.1.b.
hereof shall be issued by Reorganized Southern Mineral pursuant to the
Plan without further act or action under applicable law, regulation,
order or rule.
d. Bankruptcy Code Section 1145
The issuance of the New Common Stock pursuant to the Plan is
hereby authorized in accordance with Section 1145 of the Bankruptcy
Code.
(c) Article IV.D.3. of the Plan is deleted in its entirety and replaced by the
following Article IV.D.3.:
Reverse Stock Split
On the Effective Date, Reorganized Southern Mineral will effect a
1:5 reverse stock split in which one share of new Common Stock will be
exchanged for every five shares of outstanding Common Stock. In lieu
of issuing fractional shares, the number of shares issuable to any
stockholder will be rounded downward to the nearest whole share, and
no consideration shall be paid in respect of fractional shares.
(d) Article IV.E.2. of the Plan is deleted in its entirety and replaced by the
following Article IV.E.2.:
Board of Directors
On the Effective Date, the term of the current Board of Southern
Mineral will expire. The Board of Reorganized Southern Mineral will
initially consist of the following individuals:
i. Two Incumbent Directors; and
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ii. Five New Directors whose names will be announced prior to the
termination of the Confirmation Hearing.
Pursuant to the Amended Articles of Incorporation:
i. the number of directors serving on the Board of Reorganized
Southern Mineral will be fixed at seven (7) until the first annual
or special shareholders' meeting following the first anniversary of
the Effective Date. After the first anniversary of the Effective
Date, the number of directors may be increased or decreased by the
Board; and
ii. the term of the initial directors serving on the Board of
Reorganized Southern Mineral will be until the first regularly
scheduled annual shareholders' meeting following the first
anniversary of the Effective Date; and thereafter, directors will be
elected annually at the annual meeting of shareholders.
(e) Article IV.H. of the Plan is deleted in its entirety and replaced by
the following Article IV.H.:
EXCLUSIVITY PERIOD
Subject in all respects to Section 1121(d) of the Bankruptcy
Code, the Debtors shall retain the exclusive right to amend or modify
the Plan, and to solicit acceptances of any amendments or
modifications of the Plan, through and until the Consummation Date.
Section 4. Amendment to Article VI.
Article VI. of the Plan is deleted in its entirety and replaced by the
following Article VI.:
SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN
On or before the Distribution Date, Reorganized Southern Mineral
shall issue for distribution in accordance with the provisions of the
Plan all of the New Common Stock required for distribution pursuant to
the provisions of the Plan. All securities to be issued will be
deemed issued as of the Distribution Date regardless of the date on
which they are actually distributed.
Section 5. Amendments to Article VII
(a) Article VII.A. of the Plan is deleted in its entirety and replaced by
the following Article VII.A.:
DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE CONSUMMATION DATE
Except as otherwise provided herein or as ordered by the
Bankruptcy Court, distributions to be made on account of Claims that
are Allowed Claims as
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of the Distribution Date shall be made on the Distribution Date, or as
soon thereafter as practicable. The New Common Stock to be issued
under the Plan shall be deemed issued as of the Distribution Date
regardless of the date on which they are actually distributed so long
as all shares of the New Common Stock are distributed to the
appropriate indenture trustee, agent or servicer on the Distribution
Date. Distributions on account of Claims that first become Allowed
Claims after the Consummation Date shall be made pursuant to Articles
III, VII, and IX of the Plan.
(b) Article VII.E. of the Plan is deleted in its entirety and replaced by the
following Article VII.E.:
INSTRUCTIONS TO DISBURSING AGENT
Prior to any distribution on account of an Allowed Class 4 Claim,
the Indenture Trustee(s), agent, or servicer of the Debentures shall
(i) inform the Disbursing Agent as to the amount of properly
surrendered Debentures and (ii) instruct the Disbursing Agent, in a
form and manner that the Disbursing Agent reasonably determines to be
acceptable of the names of the holders of Allowed Class 4 Claims, and
the number of shares of New Common Stock to be issued and, distributed
to or on behalf of such holders of Allowed Class 4 Claims in exchange
for properly surrendered Debentures.
(c) Article VII.I. of the Plan is deleted in its entirety and replaced by the
following Article VII.I.:
CALCULATION OF DISTRIBUTION AMOUNTS OF NEW COMMON STOCK
No fractional shares of New Common Stock shall be issued or
distributed under the Plan or by Reorganized Southern Mineral or any
Disbursing Agent, indenture trustee, agent, or servicer. Each Person
entitled to receive New Common Stock will receive the total number of
whole shares of New Common Stock to which such Person is entitled.
Whenever any distribution to a particular Person would otherwise call
for distribution of a fraction of a share of New Common Stock, the
Allowed Debenture Claim producing the de minimis distribution shall be
cancelled and discharged, and shall be of no further force and effect.
Upon the allocation of all the whole shares authorized under the Plan,
all remaining shares of New Common Stock on account of fractional
portions shall be cancelled, and no consideration shall be paid in
respect of such cancelled fractional shares.
Section 6. Amendments to Article IX.
(a) Article IX.C. of the Plan is deleted in its entirety and replaced by the
following Article IX.C.:
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DISTRIBUTION RESERVE
1. The Disbursing Agent shall withhold the Distribution Reserve
from the Cash, New Common Stock, or other property to be distributed
under the Plan. As to any Disputed Claim, upon a request for
estimation by the Debtors or any other party in interest, the
Bankruptcy Court shall determine what amount is sufficient to withhold
as the Distribution Reserve. The Debtors or any other party in
interest may request estimation for every Disputed Claim that is
unliquidated and the Disbursing Agent shall withhold the Distribution
Reserve based upon the estimated amount of such Claim as set forth in
a Final Order. If the Debtors elect not to request such an estimation
from the Bankruptcy Court with respect to a Disputed Claim that is
liquidated, the Disbursing Agent shall withhold the Distribution
Reserve based upon the face amount of such Claim. Nothing in the Plan
or herein shall be deemed to entitle the holder of a Disputed Claim to
post-petition interest on such Claim and such holder shall not be
entitled to any such interest.
a. In the event that any matter requires approval by the
shareholders of the Reorganized Southern Mineral prior to the
distribution or cancellation of all shares of New Common Stock from
the Distribution Reserve or by the Indenture Trustee, the shares of
New Common Stock held by the Disbursing Agent or the Indenture
Trustee shall be deemed not to have been issued, for voting purposes
only.
b. If practicable, the Disbursing Agent shall invest any Cash that
is withheld as the Distribution Reserve in a manner that shall yield
a reasonable net return, taking into account the safety of the
investment. Any interest that is earned shall accrue to the benefit
of and shall be paid to the Reorganized Debtors quarter annually.
(b) Article IX.D. of the Plan is deleted in its entirety and replaced by the
following Article IX.D.:
DISTRIBUTIONS AFTER ALLOWANCE
The Reorganized Debtors or the Disbursing Agent, as the case may
be, shall make payments and distributions from the Distribution
Reserve to each holder of a Disputed Claim that has become an Allowed
Claim in accordance with the provisions of the Plan governing the
Class of Claims to which such holder belongs. On the next succeeding
interim distribution date after the date that the order or judgment of
the Bankruptcy Court allowing all or part of such Claim becomes a
Final Order, the Disbursing Agent shall distribute to the holder of
such Claim any Cash, New Common Stock, or other property in the
Distribution Reserve that would have been distributed on the
Distribution Date had such Allowed Claim been allowed on the
Distribution Date. After a Final Order has been entered, or other
final resolution has been reached, with respect to each Disputed Claim
(i) any New Common Stock held in the Distribution Reserve shall become
the property of Reorganized Southern Mineral and (ii) any Cash or
other property remaining in the Distribution Reserve shall become
property of the Reorganized Debtors. All distributions made under
this Article IX.D on account
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of an Allowed Claim shall be made together with any dividends,
payments or other distributions made on account of, as well as any
obligations arising from, the distributed property as if such Allowed
Claim had been an Allowed Claim on the Distribution Date.
Notwithstanding the foregoing, the Disbursing Agent shall not be
required to make distributions under Article IX.D more frequently than
once every 180 days or to make any individual payments in an amount
less than $25.00
Section 7. Amendments to Article XIII.
(a) Article XIII.F. of the Plan is deleted in its entirety and replaced by the
following Article XIII.F.:
DISCHARGE OF DEBTORS
All consideration distributed under the Plan shall be in exchange
for, and in complete satisfaction, settlement, discharge, and release
of, all Claims of any nature whatsoever against the Debtors or any of
their assets or properties, and, except as otherwise provided herein
or in the Confirmation Order. Upon the Consummation Date, so long as
the Debtors have distributed the New Common Stock and the Cash Payment
to the Indenture Trustee, the Debtors shall be deemed discharged and
released under Section 1141(d)(1)(A) of the Bankruptcy Code from any
and all Claims, including, but not limited to, (i) debts, demands and
liabilities that arose before the Confirmation Date, (ii) any
liability (including withdrawal liability) to the extent such Claims
relate to services performed by employees of Southern Mineral prior to
the Petition Date and that arises from a termination of employment or
a termination of any employee or retiree benefit program regardless of
whether such termination occurred prior to or after the Confirmation
Date, and (iii) all debts of the kind specified in Sections 502(g),
502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a proof of
Claim based upon such debt is filed or deemed filed under Section 501
of the Bankruptcy Code, (b) a Claim based upon such debt is Allowed
under Section 502 of the Bankruptcy Code, or (c) the holder of a Claim
based upon such debt accepted the Plan. The Confirmation Order shall
be a judicial determination of discharge of all liabilities of the
Debtors, subject to the Consummation Date occurring.
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Section 8. Amendments to APPENDIX I-A.
(a) The following definitions on Appendix I-A to the Plan are deleted in their
entirety:
"Additional Shares of Common Stock"
"Change of Control"
"Conversion Price"
"Conversion Rate"
"Convertible Securities"
"Effective Price"
"Extraordinary Common Stock Event"
"Independent Director"
"Market Price"
"Preferred Stock Designation"
"Redemption Price"
"Series A Preferred Stock"
"Trading Period"
(b) The definition of "Distribution Reserve" in Appendix I-A to the Plan is
deleted in its entirety and replaced by the following definition of such
term:
Distribution Reserve - the reserve, if any, established and maintained
by the Reorganized Southern Mineral, into which the Reorganized
Southern Mineral will deposit the amount of Cash, New Common
Stock, Common Stock, or other property that would have been
distributed on the Distribution Date to holders of (a) Disputed
Claims, (b) contingent liquidated Claims, if such Claims are
undisputed or not contingent on the Distribution Date, pending
(i) the allowance of such Claims, (ii) the estimation of such
Claims for purposes of allowance or (iii) the realization of the
contingencies, and (c) unliquidated Claims, if such Claims had
been liquidated on the Distribution Date, such amount to be
estimated by the Bankruptcy Court or agreed upon by Southern
Mineral and the holders thereof as sufficient to satisfy such
unliquidated Claim upon such Claim's (x) allowance, (y)
estimation for purposes of allowance, or (z) liquidation, pending
the occurrence of such estimation or liquidation.
(c) The definition of "Incumbent Director" in Appendix I-A to the Plan is
deleted in its entirety and replaced by the following definition of such
term:
Incumbent Director- shall mean each of Thomas R. Fuller and Donald H.
Wiese, Jr.
(d) The definition of "New Director" in Appendix I-A to the Plan is deleted in
its entirety and replaced by the following definition of such term:
New Director -shall mean each of the following: (a) Thomas A. Hillin
and David E. Fite, provided, however, if either or both choose
not to serve then the
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Creditors' Committee shall select one or two, as the case may be,
Debenture holder(s) (other than from the Bondholder Group)
willing to serve and reasonably acceptable to the Debtors prior
to June 30, 2000 as a replacement(s), provided further, however,
if such a replacement(s) is not timely made the Debtors shall
select the replacement(s) from the Debenture holder group; and
(b) three (3) individuals selected by the Bondholder Group,
willing to serve and reasonably acceptable to the Debtors, prior
to June 30, 2000.
(e) The following definitions are inserted in alphabetical order in Appendix I-
A to the Plan:
Bondholder Group - shall mean Co-Mac Partners, L.P., Co-Mac Endowment,
L.P., Co-Mac Int'l, N.V., Co-Mac Opportunities L.P., Jude Z.
Nash, IRA, Robert Nash, IRA, Robert Nash and Paul Miller,
including their respective insiders as that term is defined in
section 101(31) of the Bankruptcy Code.
New Common Stock - newly authorized and issued shares of Common Stock
of the Reorganized Southern Mineral to be issued pursuant to the
provisions of Article IV of the Plan.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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Dated: June 19, 2000
Houston, Texas
SOUTHERN MINERAL CORPORATION
/s/ Steven H.Mikel
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Steven H. Mikel
President, Chief Executive Officer and Secretary
SMC PRODUCTION COMPANY
/s/ Steven H.Mikel
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Steven H. Mikel
President, Chief Executive Officer and Secretary
AMERAC ENERGY CORPORATION
/s/ Steven H.Mikel
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Steven H. Mikel
President, Chief Executive Officer and Secretary
BEC ENERGY, INC.
/s/ Steven H.Mikel
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Steven H. Mikel
President, Chief Executive Officer and Secretary
SMC ECUADOR, INC.
/s/ Steven H.Mikel
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Steven H. Mikel
President, Chief Executive Officer and Secretary
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Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Attorneys for Debtors
By: /s/ H. Rey Stroube, III
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H. Rey Stroube, III
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