SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
Kelley Oil & Gas Corporation
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(Name of Issuer)
Common Stock, Par Value $.01 Per Share
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(Title of Class of Securities)
487906 10 9
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(CUSIP Number)
John F. Bookout Richard Hall
Kelley Oil & Gas Corporation Cravath, Swaine & Moore
601 Jefferson Street Worldwide Plaza
Suite 1100 825 Eighth Avenue
Houston, Texas 77002 New York, New York 10119
(713) 652-5200 (212) 474-1293
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 1, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with this statement. [ ] (1)
has a previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1; and (2)
has filed no amendment subsequent thereto reporting beneficial ownership of
five percent or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
Page 1 of 21 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 487906 10 9
- ----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Contour Production Company L.L.C.
I.R.S. No.: 76-0496126
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 75,000,000
ENEFICIALLY ---------------------------------------------------------
WNED BY EACH 8 SHARED VOTING POWER
REPORTING -0-
PERSON WITH ---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
75,000,000
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
75,000,000
- ----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
59.7%**
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14 TYPE OF REPORTING PERSON*
OO
- ----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**SEE DESCRIPTION PRESENTED UNDER THE CAPTION
"ITEM 5. INTEREST IN SECURITIES OF THE ISSUER"
Page 2 of 21 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 487906 10 9
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bessemer Holdings, L.P.
I.R.S. No.: 22-3257974
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
ENEFICIALLY ---------------------------------------------------------
WNED BY EACH 8 SHARED VOTING POWER
REPORTING 75,000,000
PERSON WITH ---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
75,000,000
- ----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
75,000,000
- ----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
59.7%**
- ----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**SEE DESCRIPTION PRESENTED UNDER THE CAPTION
"ITEM 5. INTEREST IN SECURITIES OF THE ISSUER"
Page 3 of 21 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 487906 10 9
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
JFB Squared, Ltd.
I.R.S. No.: 76-0412765
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
- ----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
ENEFICIALLY ---------------------------------------------------------
WNED BY EACH 8 SHARED VOTING POWER
REPORTING 75,000,000
PERSON WITH ---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
75,000,000
- ----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
75,000,000
- ----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
59.7%**
- ----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**SEE DESCRIPTION PRESENTED UNDER THE CAPTION
"ITEM 5. INTEREST IN SECURITIES OF THE ISSUER"
Page 4 of 21 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 487906 10 9
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bevairohn, Ltd.
I.R.S. No.: 76-0415687
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- ----------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- ----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
ENEFICIALLY ---------------------------------------------------------
WNED BY EACH 8 SHARED VOTING POWER
REPORTING 75,000,000
PERSON WITH ---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
75,000,000
- ----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
75,000,000
- ----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
59.7%**
- ----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**SEE DESCRIPTION PRESENTED UNDER THE CAPTION
"ITEM 5. INTEREST IN SECURITIES OF THE ISSUER"
Page 5 of 21 Pages
<PAGE>
Kelley Oil & Gas Corporation
Amendment No. 3 to
Schedule 13D
This Amendment No. 3 hereby amends and restates in its entirety
the Statement on Schedule 13D dated January 23, 1996, as amended by
Amendment No. 1 dated February 15, 1996, and Amendment No. 2 dated April
26, 1996 (as amended, the "Statement"), relating to the common stock, par
value $0.01 per share ("Common Stock"), of Kelley Oil & Gas Corporation, a
Delaware corporation ("Kelley").
Item 1. Security and Issuer.
This Statement relates to the Common Stock of Kelley. The address
of the principal executive office of Kelley is 601 Jefferson Street, Suite
1100, Houston, Texas 77002.
Item 2. Identity and Background.
(a), (b), (c) and (f). This Statement is filed on behalf of
Contour Production Company L.L.C., a Delaware limited liability company
("Contour"), JFB Squared, Ltd., a Texas limited partnership ("JFB"), and
Bevairohn, Ltd., a Texas limited partnership ("Bevairohn"), pursuant to
Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Bessemer Holdings, L.P., a Delaware limited
partnership ("BH"). Contour, BH, JFB and Bevairohn are hereinafter
collectively referred to as the "Reporting Persons".
Contour has its principal office at 630 Fifth Avenue, New York,
New York 10111. Contour's activities consist principally of investing in
Kelley, which activities are principally conducted at its 630 Fifth Avenue
office. BH owns a majority of the outstanding membership interests of
Contour. BH has its principal office at 630 Fifth Avenue, New York, New
York 10111. BH's only activity is making investments in securities for its
own account, which activity is principally conducted at its 630 Fifth
Avenue office. Under the constitutive documents of Contour, as described in
Item 5, Bevairohn may be deemed to share the power to direct the vote of
the Common Stock beneficially owned by Contour. JFB's and Bevairohn's
principal office is located at 910 Louisiana Street, Suite 5050, Houston,
Texas 77002. JFB's and Bevairohn's activities consist principally of
investing in Contour. John F. Bookout, who is the Chairman of the Board of
Directors, President and Chief Executive Officer of Kelley, is general
partner of JFB and Bevairohn. Each of Mr. Bookout, together with wife,
Carolyn Bookout, and John F. Bookout III hold a 1% general partnership
interest and a 49% limited partnership interest in JFB. Mr. Bookout,
together with wife, holds a 3% general partnership interest in Bevairohn
and Mr. Bookout III holds a 1% general partnership interest in Bevairohn.
The limited partners of Bevairohn consist of Mr. Bookout, his wife, Mr.
Bookout III and three trusts established for members of Mr. Bookout's
family.
Page 6 of 21 Pages
<PAGE>
The sole general partner of BH is Kylix Holdings, L.L.C., a New
York limited liability company ("Kylix"), which has its principal office at
630 Fifth Avenue, New York, New York 10111. Kylix's activities consist
principally of acting as the general partner of, and investing in, BH and
related entities, which activities are principally conducted at its 630
Fifth Avenue office. The principal members of Kylix are Woods 1994 Family
Partnership, L.P., a Delaware limited partnership ("Woods 1994 Family
Partnership"), Lindsay 1994 Family Partnership, a Delaware limited
partnership ("Lindsay 1994 Family Partnership"), and Rothfeld 1994 Family
Partnership, L.P., a Delaware limited partnership ("Rothfeld 1994 Family
Partnership"), each of which has its principal office at 630 Fifth Avenue,
New York, New York 10111.
Each of Woods 1994 Family Partnership, Lindsay 1994 Family
Partnership and Rothfeld 1994 Family Partnership has designated a
corporation to manage the activities of Kylix. The sole stockholder and
president of each of these corporations is, respectively, Mr. Ward W.
Woods, Mr. Robert D. Lindsay and Mr. Michael B. Rothfeld.
The primary limited partner of BH is Bessemer Securities
Corporation, a Delaware corporation ("BSC"), which has its principal office
at 630 Fifth Avenue, New York, New York 10111. BSC's principal activity is
making investments for its own account, which activity is principally
conducted at its 630 Fifth Avenue office.
The name, address and principal occupation or employment of the
officers and controlling persons of Contour are set forth in Schedule I.
The name, address and principal occupation or employment of Mr. Woods, Mr.
Lindsay and Mr. Rothfeld are set forth in Schedule II. The name, address
and principal occupation or employment of the directors and executive
officers of BSC are set forth in Schedule III. The name, address and
principal occupation or employment of the general partners of JFB and
Bevairohn are set forth in Schedule IV. Each person noted on any such
schedule is a citizen of the United States. Schedules I through IV are
incorporated herein by reference.
(d) and (e). During the last five years, neither the Reporting
Persons, nor, to the knowledge of the Reporting Persons, any of the persons
named in this Item 2 or listed on Schedules I through IV has been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On February 15, 1996, pursuant to the Stock Purchase Agreement
(the"Stock Purchase Agreement") dated as of January 23, 1996, between
Kelley and Contour, Contour acquired 48,000,000 newly issued shares of
Common Stock for a
Page 7 of 21 Pages
<PAGE>
purchase price equal to $48 million. The funds used by Contour in the
purchase of the 48,000,000 newly issued shares of Common Stock pursuant to
the Stock Purchase Agreement were provided to Contour by BH and JFB. The
funds provided by BH were obtained by BH through contributions from its
partners, primarily from BSC. The funds provided by JFB were provided by
its partners.
On December 1, 1997, Contour exercised in full its option
pursuant to the Option Agreement (the "Option Agreement") dated as of
February 15, 1996, between Kelley and Contour. The $27,000,000 in cash used
by Contour in the purchase of the 27,000,000 newly issued shares of Common
Stock pursuant to the Option Agreement were provided by the members of
Contour.
The acquisitions of stock by Contour pursuant to the Stock
Purchase Agreement and the Option Agreement are described in Item 4.
Item 4. Purpose of Transaction.
The shares of Common Stock that were acquired by Contour pursuant
to the Stock Purchase Agreement were acquired as part of a transaction
whereby Kelley raised equity, paid down existing indebtedness and replaced
a significant portion of senior management. Under the Stock Purchase
Agreement, Kelley issued, sold and delivered to Contour, and Contour
purchased from Kelley, 48,000,000 newly issued shares of Common Stock for a
purchase price of $48 million (the "Initial Purchase").
Pursuant to the Option Agreement, Kelley granted to Contour an
irrevocable option (the "Option"), exercisable at any time or from time to
time, to purchase at an option price equal to $1.00 per share, subject to
certain antidilution adjustments, up to the number of newly issued shares
of Common Stock equal to the lesser of (i) the maximum number of shares
Contour may purchase without causing the occurrence of a Debt Event (as
defined below) and (ii) the number of shares equal to (A) $27 million less
any amounts previously paid for shares of Common Stock pursuant to the
Option Agreement divided by (B) the then applicable option price of $1.00
per share, as adjusted in accordance with the Option Agreement. Contour
agreed to exercise the Option for the full number of shares of Common Stock
specified in clause (ii) above within 30 days after the date on which
Contour concludes in its sole discretion that a Debt Event could not occur
upon exercise of the Option with respect to such number of shares of Common
Stock. On December 1, 1997, Contour exercised the Option and purchased
27,000,000 shares of Common Stock from Contour at a price of $27 million
(the "Option Purchase") to help Kelley finance the acquisition by Kelley of
substantially all the assets of SCANA Petroleum Resources Inc. A copy of
the Option Agreement is attached hereto as Exhibit 2 and is incorporated
herein by reference. The description of the Option Agreement set forth
herein is qualified in its entirety by reference to the full text of the
agreement.
As a result of the Initial Purchase and the Option Purchase,
Contour and BH beneficially own 58.9% of the total voting power of the
outstanding voting stock of Kelley.
Page 8 of 21 Pages
<PAGE>
(a). Pursuant to Section 5(g) of the Stock Purchase Agreement,
Kelley agreed that, in the event that equity securities of Kelley, in
addition to the securities issuable pursuant to the term of the settlement
of the lawsuit titled 7547 Partners v. Kelley Oil et. al., are issued to
former unitholders of Kelley Oil & Gas Partners, Ltd., a Texas limited
partnership ("Kelley Partners"), as a result of any challenges to the
consolidation of Kelley Partners and Kelley Oil Corporation, a Delaware
corporation ("Kelley Oil"), effected in 1995, including as a result of the
failure to uphold such settlement, Kelley will, concurrently with any such
issuance to or on behalf of former unitholders, issue to Contour without
additional consideration that number of shares of Common Stock equal to the
sum of (i) the number of shares of Common Stock necessary, when added to
the number of shares of Common Stock then owned by Contour, to maintain
Contour's percentage ownership of the total outstanding shares of Common
Stock (including any securities issuable pursuant to such settlement) at
the same level, after giving effect to such issuance, and (ii) a number of
shares of Common Stock determined by dividing the fair market value of any
preferred stock, par value $1.50 per share, of Kelley so issued to former
unitholders by the lesser of a purchase price equal to $1 per share of
Common Stock or the average market price of the Common Stock during the
five trading days immediately prior to the issuance of such preferred
stock; provided, however, that (unless Contour and Kelley otherwise agreed)
any Common Stock issuable to Contour pursuant to such section would be
issued only to the extent such issuance would not cause (i) a "Change of
Control" under the Indenture (the "13-1/2% Indenture") relating to the
Kelley's 13-1/2% Senior Notes due June 15, 1999 (the "13-1/2% Notes"), (ii)
a "Change in Control" under the Indenture (the "7-7/8% Indenture") relating
to the 7-7/8% Convertible Subordinated Notes due December 15, 1999 (the
"7-7/8% Notes") of Kelley Partners or (iii) or a "Redemption Event" as
defined in the Indenture (the "8-1/2% Indenture") relating to the 8-1/2%
Convertible Subordinated Debentures due April 1, 2000 (the "8-1/2%
Debentures") of Kelley Partners. Any such event referred to in (i), (ii) or
(iii) of the proviso in the preceding sentence is hereinafter referred to
as a "Debt Event".
A Debt Event with respect to the 13-1/2% Notes, the 7-7/8% Notes
or the 8-1/2% Debentures would entitle the holders of the affected
securities to require the repurchase or redemption of such holders'
securities. Under the 13-1/2% Indenture as in effect at the date of the
Initial Purchase, a Change of Control would occur if, among other things,
any person were to become the beneficial owner of securities representing
50% or more of the total voting power in Kelley. The 13-1/2% Indenture was
amended in October 1996 to eliminate the "Change of Control" concept. Under
the 7-7/8% Indenture, a Change in Control would occur if, among other
things, any person other than Kelley Oil and its affiliates were to become
the beneficial owner of securities representing 50% or more of the total
voting power in Kelley Oil, a wholly owned subsidiary of Kelley that is the
managing general partner of Kelley Partners, or 50% or more of the equity
interests of Kelley Partners. Under the 8-1/2% Indenture, a Redemption
Event would occur if, among other things, any person were to become the
beneficial owner of securities representing 25% or more of equity interests
in Kelley Partners, unless such event were approved by the board of
directors of Kelley Oil within 20 days after the first public disclosure of
such event.
Page 9 of 21 Pages
<PAGE>
After giving effect to the issuance of the Common Stock pursuant
to the Stock Purchase Agreement, Contour beneficially owned approximately
49.8% of the total voting power of the Common Stock. The board of directors
of Kelley Oil approved the Initial Purchase for the purposes of the 8-1/2%
Indenture within the applicable 20 day period.
A copy of the Stock Purchase Agreement is attached hereto as
Exhibit 1 and is incorporated herein by reference. The description of the
Stock Purchase Agreement set forth herein is qualified in its entirety by
reference to the full text thereof.
The Reporting Persons reserve the right to determine in the
future to formulate plans or proposals which relate to, or would result in,
or to take or cause to be taken any action relating to, or resulting in,
the acquisition of additional securities of Kelley or the disposition of
any securities of Kelley.
(b) and (c). Pursuant to the Stock Purchase Agreement, Contour
agreed to refrain from voting any shares of Common Stock it owns to approve
a merger or consolidation of Kelley with, or a sale of all or substantially
all the assets of Kelley to, Contour or any affiliate of Contour (other
than a merger, consolidation or sale that does not increase the percentage
ownership of Contour in the surviving entity) unless (i) so long as Contour
and its affiliates are the controlling stockholder of Kelley, the effective
consideration per share of Common Stock to be received by the other holders
of Common Stock in such transaction complies in all material respects with
any applicable requirements of the law of the State of Delaware regarding
the fairness of transactions between a corporation and a controlling
stockholder and (ii) if such transaction is consummated within three years
of the consummation of the sale and purchase of the shares of Common Stock
as contemplated by the Stock Purchase Agreement, the consideration to be
received in such transaction on an equivalent per share basis has a value
that is not less than $1 per share. Notwithstanding the foregoing, this
provision of the Stock Purchase Agreement will not apply to any transaction
that is approved by holders (other than Contour and its affiliates) of
Common Stock representing a majority of the Common Stock (other than Common
Stock held by Contour and its affiliates) voted with respect to approval of
such transaction.
(d). Pursuant to the Stock Purchase Agreement, four designees of
Contour initially were appointed to the board of directors of Kelley (the
"Board"). The newly appointed members of the Board were Mr. Bookout, Mr.
Ogden Mills Phipps, Mr. Woods and Mr. Rothfeld. In connection with the
Initial Purchase, the Board elected Mr. Bookout as the Chairman of the
Board, President and Chief Executive Officer of Kelley, Dallas D. Laumbach
as the Senior Vice President--Exploration and Production, William C. Rankin
as the Senior Vice President and Chief Financial Officer and William E.
Albrecht as the Vice President--Production.
(e). Pursuant to the Stock Purchase Agreement, Kelley and certain
subsidiaries entered into a new credit agreement. The new credit agreement
prohibits the payment of dividends in respect of the capital stock of
Kelley.
Page 10 of 21 Pages
<PAGE>
(g). As required by the Stock Purchase Agreement, the Board duly
approved and adopted an amendment to the Amended Certificate of
Incorporation increasing the authorized number of shares of Common Stock
from 100,000,000 shares to 200,000,000 shares. The amendment was approved
by the stockholders of Kelley by written consent.
Except as set forth in this Statement or as contemplated by the
Stock Purchase Agreement, the Option Agreement or the Registration Rights
Agreement (which agreement is discussed in Item 6 and attached hereto as
Exhibit 4), none of the Reporting Persons nor, to the knowledge of the
Reporting Persons, any of the persons named in Item 2 or listed on
Schedules I through IV has any other present plans or proposals which would
result in or relate to (a) the acquisition by any person of additional
securities of Kelley, or the disposition of securities of Kelley; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving Kelley or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of Kelley or of any of its
subsidiaries; (d) any change in the present Board or management of Kelley,
including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the Board; (e) any material change in
the present capitalization or dividend policy of Kelley; (f) any other
material change in Kelley's business or corporate structure; (g) changes in
Kelley's charter, by-laws or instruments corresponding thereto or other
actions which may impede the acquisition of control of Kelley by any
person; (h) causing a class of securities of Kelley to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association; (i) a class of equity securities of Kelley becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or (j) any action similar to any of those enumerated above.
Any of the Reporting Persons may, however, discuss one or more of the
foregoing matters with other stockholders of Kelley or may formulate a plan
or proposal relating to one or more of the foregoing matters. In addition,
in the context of the performance of their duties associated with
membership on the Board, any of the designees of the Reporting Persons on
the Board may discuss one or more of the foregoing matters with the other
directors of Kelley or the members of the management team of Kelley or may
formulate a plan or proposal relating to one or more of the foregoing
matters.
Item 5. Interest in Securities of the Issuer.
(a) and (b). Pursuant to the Stock Purchase Agreement, Kelley
issued, sold and delivered to Contour, and Contour purchased from Kelley,
48,000,000 newly issued shares of Common Stock. Pursuant to the Option
Agreement, Kelley issued, sold and delivered to Contour, and Contour
purchased from Kelley, 27,000,000 newly issued shares of Common Stock.
Together, the 75,000,000 shares of Common Stock acquired by Contour
represent approximately 59.7% of the approximately 125,603,594 shares of
outstanding Common Stock.
The 75,000,000 shares of Common Stock issued to Contour represent
approximately 58.9% of the total voting power of the outstanding voting
stock of
Page 11 of 21 Pages
<PAGE>
Kelley. The outstanding voting stock of Kelley is comprised of shares of
Common Stock and shares of preferred stock of Kelley, par value $1.50 per
share, which shares are designated $2.625 convertible exchangeable
preferred stock (the "$2.625 Convertible Exchangeable Preferred Stock").
The holder of each share of Common Stock and $2.625 Convertible
Exchangeable Preferred Stock is entitled to one vote per share on all
matters submitted to a vote of the stockholders. The approximation of the
aggregate percentage of the total voting power of the outstanding voting
stock was derived from the 98,603,594 shares of Common Stock and the
1,745,431 shares of $2.625 Convertible Exchangeable Preferred Stock
reported by Kelley in its most recent Form 10-Q and the 27,000,000 shares
issued as contemplated by the Option Agreement.
A copy of the Stock Purchase Agreement is attached hereto as
Exhibit 1 and is incorporated herein by reference. A copy of the Option
Agreement is attached hereto as Exhibit 2 and is incorporated herein by
reference. The description of the Stock Purchase Agreement and the Option
Agreement set forth herein are qualified in their entirety by reference to
the full text thereof.
Subject to the matters described in this Item 5, neither the
Reporting Persons nor, to the knowledge of the Reporting Persons, any of
the persons named in Item 2 or listed in Schedules I through IV
beneficially owns any shares of Common Stock other than such 75,000,000
shares.
As discussed in Item 2, (i) Kylix is the sole general partner of
BH, (ii) Woods 1994 Family Partnership, Lindsay 1994 Family Partnership and
Rothfeld 1994 Family Partnership are the principal members of Kylix and
(iii) each of Woods 1994 Family Partnership, Lindsay 1994 Family
Partnership and Rothfeld 1994 Family Partnership has designated a
corporation to manage the activities of Kylix, the sole stockholder and
president of which is, respectively, Mr. Woods, Mr. Lindsay and Mr.
Rothfeld. Kylix, Woods 1994 Family Partnership, Lindsay 1994 Family
Partnership, Rothfeld 1994 Family Partnership, Mr. Woods, Mr. Lindsay and
Mr. Rothfeld, by virtue of such relationships, may be deemed to share with
BH the power to vote or direct the vote and to dispose of or to direct the
disposition of the shares of Common Stock beneficially owned by BH,
although each such person disclaims any beneficial ownership of such
shares. In addition, as discussed in Item 2, BSC is the primary limited
partner of BH. BSC disclaims any beneficial ownership of the shares of
Common Stock beneficially owned by BH.
Under the constitutive documents of Contour, a majority of the
membership interests in Contour must approve any action to be taken by
Contour, except that so long as (i) JFB, Bevairohn, Mr. Bookout or any
other affiliate of Mr. Bookout holds any membership interests in Contour,
(ii) Mr. Bookout is not subject to any disability (as defined in Mr.
Bookout's employment agreement with Kelley) and (iii) Mr. Bookout's
employment with Kelley is not terminated for cause (as defined in Mr.
Bookout's employment agreement with Kelley), the approval of BH and
Bevairohn (as holders of a majority of the separate classes of membership
interests in Contour) is required for Contour to (A) vote any shares of
Common Stock against the
Page 12 of 21 Pages
<PAGE>
election of Mr. Bookout as a director of Kelley or (B) take any action as a
stockholder of Kelley that would result in Mr. Bookout not being elected
as, or being removed as, a director of Kelley. Bevairohn, by virtue of
these matters, may be deemed to share with BH the power to direct the vote
of the Common Stock beneficially owned by Contour. By virtue of their
interests in the control over Bevairohn, Mr. Bookout, his wife and Mr.
Bookout III may be deemed to have the power to direct the vote of the
Common Stock beneficially owned by Bevairohn, although each such person
disclaims any beneficial ownership of such Common Stock.
(c). Neither the Reporting Persons nor, to the knowledge of the
Reporting Persons, any of the persons named in Item 2 or listed on
Schedules I through IV has effected any transactions in the shares of
Common Stock during the past 60 days.
(d). JFB owns approximately 3.8% of Contour. In addition, under
the agreements relating to the formation of Contour, Bevairohn will have
the right to receive, subject to certain financial and other conditions, up
to 10% of any profit that Contour may realize from any sale by Contour of
Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The shares of Common Stock that are the subject of this Statement
were acquired by the Reporting Persons pursuant to the Stock Purchase
Agreement and the Option Agreement. Under the Stock Purchase Agreement,
Kelley has issued, sold and delivered to Contour, and Contour has purchased
from Kelley, 48,000,000 newly issued shares of Common Stock for an
aggregate purchase price of $48 million. Pursuant to the Option Agreement,
Kelley issued, sold and delivered to Contour, and Contour purchased from
Kelley, 27,000,000 newly issued shares of Common Stock for an aggregate
purchase price of $27 million.
In connection with the transactions contemplated by the Stock
Purchase Agreement, Kelley and Contour entered into a registration rights
agreement, dated as of February 15, 1996 (the "Registration Rights
Agreement"), a copy of which is attached hereto as Exhibit 4, which grants
certain registration rights to Contour and its permitted assignees with
respect to the shares acquired by Contour in the Initial Purchase and the
Option Purchase.
In connection with the transactions contemplated by the Stock
Purchase Agreement, Kelley paid Bessemer Partners & Co., a New York general
partnership ("BP&Co.") and an affiliate of BH, certain fees and expenses
related to advisory services provided to Kelley by BP&Co., including a
financial advisory fee of $2 million in respect of financial advisory
services related to the transactions contemplated by the Stock Purchase
Agreement. BP&Co. will also receive, in annual installments of $500,000, a
financial advisory fee in respect of ongoing financial advisory services
provided during each of 1996, 1997 and 1998. In addition, Kelley has agreed
to reimburse BP&Co. for certain out-of-pocket costs and expenses incurred
Page 13 of 21 Pages
<PAGE>
by BP&Co. or Contour. Kelley has also agreed, subject to certain
limitations, to indemnify BP&Co., its partners and affiliates, and the
respective directors, officers, agents and employees of BP&Co., its
partners and affiliates, from and against liabilities incurred in
connection with the rendering of financial advisory services to Kelley,
including liabilities under the Federal securities laws.
Except as described in Item 4, Item 5 and this Item 6, the
documents described in Item 4, Item 5, this Item 6 and elsewhere in this
Statement, to the knowledge of the Reporting Persons, there exist no
contracts, arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2 or listed on Schedules I
through IV and between such persons and any person with respect to any
securities of Kelley, including but not limited to transfer or voting of
any of the shares of Common Stock, finder's fees, joint ventures, loan or
option arrangements, put or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits.
Exhibit 1. Stock Purchase Agreement dated as of January 23, 1996,
between Kelley Oil & Gas Corporation, a Delaware
corporation, and Contour Production Company, a
Delaware corporation.
Exhibit 2. Option Agreement dated as of February 15, 1996,
between Kelley Oil & Gas Corporation, a Delaware
corporation, and Contour Production Company L.L.C., a
Delaware limited liability company.
Exhibit 3. Assignment and Assumption Agreement dated as of
February 14, 1996, between Contour Production Company,
a Delaware corporation, and Contour Production Company
L.L.C., a Delaware limited liability company.
Exhibit 4. Registration Rights Agreement dated as of February 15,
1996, between Kelley Oil & Gas Corporation, a Delaware
corporation, and Contour Production Company L.L.C., a
Delaware limited liability company.
Page 14 of 21 Pages
<PAGE>
Signatures
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in
this Statement is true, complete and correct.
Date: December 5, 1997
CONTOUR PRODUCTION COMPANY L.L.C.,
by: /s/ John F. Bookout
-----------------------------------
Name: John F. Bookout
Title: Authorized Signatory
JFB SQUARED, LTD.,
by: /s/ John F. Bookout
-----------------------------------
Name: John F. Bookout
Title: General Partner
BEVAIROHN, LTD.,
by: /s/ John F. Bookout
-----------------------------------
Name: John F. Bookout
Title: General Partner
Page 15 of 21 Pages
<PAGE>
BESSEMER HOLDINGS, L.P.,
by: Kylix Holdings, L.L.C., General Partner
by: North Hailey Corporation, Principal
Manager
by: /s/ Ward W. Woods
----------------------------------
Name: Ward W. Woods
Title: President
Page 16 of 21 Pages
<PAGE>
Schedule I
Officers and Controlling Persons of
Contour Production Company L.L.C.
Principal Occupation
Name Business Address or Employment
John F. Bookout Kelley Oil & Gas Corporation Chairman of the
601 Jefferson Street, Board of Directors,
Suite 1100 President and Chief
Houston, Texas 77002 Executive Officer
of Kelley Oil
& Gas Corporation
("Kelley");
Member of Contour
Production Company
L.L.C.
Bessemer Holdings, 630 Fifth Avenue --
L.P.*/ New York, New York 10111
Bevairohn, Ltd. **/ 910 Louisiana Street, --
Suite 5050
Houston Texas 77002
JFB Squared, Ltd. **/ 910 Louisiana Street, --
Suite 5050
Houston Texas 77002
- --------
*/ The sole general partner of Bessemer Holdings, L.P., is Kylix
Holdings, L.L.C. Schedule II sets forth the controlling persons of Kylix
Holdings, L.L.C.
**/ The general partners of JFB Squared, Ltd. and Bevairohn, Ltd. are
John F. Bookout, Carolyn Bookout and John F. Bookout III. Schedule IV sets
forth information regarding such persons.
Page 17 of 21 Pages
<PAGE>
Schedule II
Controlling Persons of
Kylix Holdings, L.L.C.
Principal Occupation
Name Business Address or Employment
Ward W. Woods Bessemer Partners & Co. Sole stockholder and
630 Fifth Avenue President of a
New York, New York 10111 corporation that is the
principal manager of
Kylix Holdings, L.L.C.
("Kylix"); sole
stockholder and
President of a
corporation that is the
managing general
partner of Bessemer
Partners & Co.
("BP&Co."); President
and Chief Executive
Officer and Manager of
Bessemer Securities LLC
("BSLLC"); President
and Chief Executive
Officer and Director of
Bessemer Securities
Corporation ("BSC");
Chairman of the Board
of Directors of Essex
International Inc.
("Essex
International");
Director of Kelley,
Graphic Holdings, Inc.
("Graphic"), Boise
Cascade Corporation and
several private
companies
Robert D. Lindsay Bessemer Partners & Co. Sole stockholder and
630 Fifth Avenue President of a
New York, New York 10111 corporation that is a
manager of Kylix; Sole
stockholder and
President of a
corporation that is a
general partner of
BP&Co.; Director of
Essex International and
several private
companies
Michael B. Rothfeld Bessemer Partners & Co. Sole stockholder and
630 Fifth Avenue President of a
New York, New York 10111 corporation that is a
manager of Kylix; Sole
stockholder and
President of a
corporation that is a
general partner of
BP&Co.; Chairman of the
Board of Directors of
Graphic; Director of
Kelley and several
private companies
Page 18 of 21 Pages
<PAGE>
Schedule III
Directors and Executive Officers of Bessemer Securities LLC and
Bessemer Securities Corporation
Directors and Principal Occupation
Executive Officers Business Address or Employment
Ogden Mills Phipps 1486 N. Lake Way Manager of BSLLC;
Director Palm Beach, Florida 33480 Director of BSC,
Bessemer Group,
Incorporated ("BGI"),
Kelley and
several private
companies; Officer and
Director of several
non-profit
organizations
William T. Burgin Bessemer Venture Partners Manager of Deer IV &
Director 83 Walnut Street Co. LLC; Manager of
Wellesley Hills, Massachusetts BSLLC; Director of BSC
02181
Raymond R. Guest P.O. Box 147 Director of BSC, BGI,
Director Front Royal, Virginia 22630 Bessemer Trust Company,
N.A. ("BTNA") and
Bessemer Trust Company
("BTC"); Vice Chairman
of the Board of
Managers of BSLLC; Vice
Chairman of the Board
of Directors of BSC;
Member of the Virginia
House of Delegates
Stuart S. Janney, III Bessemer Securities Corporation Chairman of the Board
Chairman of the Board 630 Fifth Avenue of Managers of BSLLC;
of Directors New York, New York 10111 Chairman of the Boards
of Directors of BSC,
BGI, BTNA and BTC
Dorothy B. Moore 630 Fifth Avenue Manager of BSLLC;
Director New York, New York 10111 Director of
BSC, BGI, BTNA and BTC
John A. Moran 125 Worth Avenue Retired; Former Chairman
Director Palm Beach, Florida 33480 of the Board of
Directors of The Dyson-
Kissner-Moran
Corporation; Private
Investor; Manager of
BSLLC
George D. Phipps Patricof & Co. Ventures, Inc. Manager of
Director 2100 Geng Road BSLLC; Director of
Palo Alto, CA 94101 BSC, BGI, BTNA and BTC;
Associate, Patricof &
Co. Ventures, Inc
Howard Phipps, Jr. Bessemer Securities Corporation Manager of
Director 630 Fifth Avenue BSLLC; Director of
New York, New York 10111 BSC, BGI, BTNA and BTC;
Chairman of The
Wildlife Conservation
Society
John E. Phipps Premier Bank Building Manager of BSLLC;
Director 3110 Capital Circle NE Director of
Tallahassee, Florida 22308 BSC, BGI, BTNA and BTC;
Chairman of the Board
of Directors and Chief
Executive Officer of
John H. Phipps, Inc.
Reuben F. Richards 250 Park Avenue Chairman of the Board of
Director 19th Floor Directors of Minorco
New York, New York 10172 (U.S.A.) Inc.;
Manager of BSLLC
Page 19 of 21 Pages
<PAGE>
Howard H. Stevenson Baker Library 336 Sarofim-Rock Professor
Director Harvard University of Business
Cambridge, Massachusetts 02163 Administration,
Harvard Graduate School
of Business
Administration;
Managing Director,
Quadra Capital
Partners, L.P.; Manager
of BSLLC; Director of
BSC
John F. Welch, Jr. General Electric Company Chairman and Chief
Director 3135 Easton Turnpike Executive
Fairfield, Connecticut 06431 Officer of General
Electric Company;
Manager of BSLLC;
Director of BSC
John R. Whitmore The Bessemer Group, President and
Director Incorporated Chief Executive
630 Fifth Avenue Officer and Director of
New York, NY 10111 BGI, BTNA and BTC;
Manager of BSLLC
Ward W. Woods Bessemer Securities Corporation See Schedule II
President and Chief 630 Fifth Avenue
Executive Officer and New York, New York 10111
Director
John G. MacDonald Bessemer Securities Corporation Senior Vice
Senior Vice 630 Fifth Avenue President, Chief
President, New York, New York 10111 Financial Officer and
Chief Financial Treasurer of BSLLC and
Officer and Treasurer BSC; Executive Vice
President, Chief
Financial Officer and
Treasurer of BGI, BTNA
and BTC
Richard R. Davis Bessemer Securities Corporation Senior Vice President,
Senior Vice 630 Fifth Avenue Secretary and General
President, Secretary New York, New York 10111 Counsel of BSLLC and
and General Counsel BSC; Executive Vice
Counsel President,
Secretary and General
Counsel of BGI, BTNA
and BTC
Page 20 of 21 Pages
<PAGE>
Schedule IV
Controlling Persons of
JFB Squared, Ltd. and Bevairohn, Ltd.
Principal Occupation
Name Business Address or Employment
John F. Bookout Kelley Oil & Gas Corporation See Schedule I
601 Jefferson Street,
Suite 1100
Houston, Texas 77002
John F. Bookout III 909 Fannin Principal of McKinsey
Houston, Texas 77010 & Co.
Carolyn Bookout P.O. Box 130614 Retired
Houston, Texas 77019
Page 21 of 21 Pages
