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) March 3, 1994
TRITON ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
Texas 1-7864 75-1151855
- ------------------------------- ------------ --------------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
Registrants telephone number, including area code (214) 691-5200
N/A
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(Former name or former address, if changed since last report)
<PAGE>
PAGE 5. OTHER EVENTS.
As indicated in the press release attached hereto as Exhibit 99. 1, on March 7,
1994, orders were entered in state and federal district courts in Dallas
approving the previously announced settlement of all pending shareholder
lawsuits against the Company.
As indicated in the press release attached hereto as Exhibit 99.2, at meetings
held on March 3, 1994, the minority shareholders of Triton Europe plc approved
the previously announced offer by the Company to purchase the shares of Triton
Europe plc not owned by the Company. The scheme of arrangement pursuant to which
the offer will be effected is expected to become effective on March 31, 1994
following its approval on March 30, 1994 by the High Court.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
99.1 Press release dated March 9, 1994
99.2 Press release dated March 8, 1994
99.3 Recommended Offer for the Minority Interest
in Triton Europe plc
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
TRITON ENERGY CORPORATION
Date: March 10, 1994 By: __/s/____Robert B. Holland, III_____
Robert B. Holland, III, Senior Vice
President and General Counsel
<PAGE>
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN
ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR OWN
FINANCIAL ADVICE IMMEDIATELY FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR,
ACCOUNTANT OR OTHER PROFESSIONAL ADVISER.
IF YOU NO LONGER HOLD ANY SHARES IN TRITON EUROPE PLC, PLEASE SEND THIS DOCUMENT
TOGETHER WITH THE ACCOMPANYING DOCUMENT ENTITLED "INFORMATION ON TRITON ENERGY
CORPORATION" AND FORMS OF PROXY AND CASH ELECTION AT ONCE TO THE PURCHASER OR
TRANSFEREE OR TO THE STOCKBROKER, BANK OR OTHER AGENT THROUGH WHOM THE SALE OR
TRANSFER WAS EFFECTED FOR TRANSMISSION TO THE PURCHASER OR TRANSFEREE.
THE ACCOMPANYING DOCUMENT ENTITLED "INFORMATION ON TRITON ENERGY CORPORATION"
CONTAINS FURTHER FINANCIAL AND OTHER INFORMATION AND IS AN INTEGRAL PART OF THIS
DOCUMENT. IT IS INCORPORATED BY THIS REFERENCE AND SHOULD BE REVIEWED CAREFULLY
WHEN CONSIDERING WHAT ACTION YOU SHOULD TAKE.
- --------------------------------------------------------------------------------
RECOMMENDED OFFER FOR THE MINORITY INTEREST
IN
TRITON EUROPE PLC
BY
TRITON ENERGY CORPORATION
TO BE EFFECTED BY MEANS OF A
SCHEME OF ARRANGEMENT
UNDER SECTION 425 OF THE COMPANIES ACT 1985
- --------------------------------------------------------------------------------
Your attention is drawn to the letter from the Independent Directors in Part I
of this document. The action you are recommended to take is set out on pages 8
and 9.
Notices of the meetings of holders of Triton Europe shares to be held on
Thursday March 3, 1994 are set out on pages 55 and 56 of this document.
YOU ARE REQUESTED TO COMPLETE AND RETURN THE ENCLOSED FORMS OF PROXY TO THE
ADDRESS PRINTED THEREON SO AS TO BE RECEIVED NOT LATER THAN 48 HOURS BEFORE THE
TIME APPOINTED FOR THE MEETINGS.
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS
The following definitions apply throughout this document, other than in the
section entitled "The Scheme of Arrangement", unless the context requires
otherwise:
"Triton Europe" and Triton Europe plc
"the Company"
"Triton Europe group" Triton Europe and its subsidiaries
"Ordinary Shares" ordinary shares of 5p each in Triton Europe
"Triton Energy" Triton Energy Corporation
"Triton Energy group" Triton Energy and its subsidiaries
"Triton Energy Common Stock" Common Stock, par value $1, of Triton Energy
"Triton Energy Convertible
Preferred Stock" and new Triton Energy convertible preferred stock
to be issued pursuant to the Scheme
"Convertible Preferred Stock"
"Cash Election" the facility whereby each holder of Scheme
Shares may elect to receive cash in place of
Convertible Preferred Stock in respect of
Scheme Shares registered in their name, up to
a limit of L6,700.17 per Scheme Shareholder
"Code" The City Code on Takeovers and Mergers
"Court" the High Court of Justice
"Court Meeting" the meeting of Scheme Shareholders convened
by order of the Court
"Court Order" the order of the Court sanctioning the Scheme
"Effective Date" the date on which the Scheme becomes
effective
"Independent Directors" Mr J.J. Holtzscherer, Mr D.P. Metcalfe and Mr
W.R. Smith, being those directors of Triton
Europe who are not also directors of or
otherwise connected with Triton Energy
"Kleinwort Benson Securities" Kleinwort Benson Securities Limited
"J.P. Morgan" Morgan Guaranty Trust Company of New York
"J.P. Morgan exchange rate" the L/$ exchange rate as quoted by J.P.
Morgan at 5 p.m. on February 3, 1994
"London Stock Exchange The International Stock Exchange of the
United Kingdom and the Republic of Ireland
Limited
"Market Maker" J.P. Morgan Securities Inc.
"NYSE" New York Stock Exchange, Inc.
"Offer" the recommended offer by Triton Energy for
the Minority Interest in Triton Europe to be
effected by means of the Scheme
"Record Date" 14 days after the posting of this document to
Scheme Shareholders
"Redemption Price" an amount in US dollars equivalent to 120 per
cent. of the average closing price for one
share of Triton Energy Common Stock on the
NYSE for the five trading days prior to the
date of the Court hearing to sanction the
Scheme
"Scheme" the Scheme of Arrangement under section 425
of the Companies Act 1985 set out on pages
51 to 54 of this document
"Scheme Shares" and 33,441,195 Ordinary Shares to be cancelled
"Minority Interest" pursuant to provisions of the Scheme, being
all the issued Ordinary Shares not
beneficially owned
by Triton Energy group
"Scheme Shareholder" a holder of Scheme Shares
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2
<PAGE>
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TABLE OF CONTENTS
PAGE
PART I Letter from the Independent Directors of Triton Europe 5
PART II Explanatory Statement from J.P. Morgan 10
1. Introduction 10
2. Summary of the Scheme 10
3. Cash Election 11
4. Conditions 11
5. Triton Energy Convertible Preferred Stock 12
6. Financial effects of the Scheme for Triton Europe shareholders 12
7. Information on Triton Europe 13
8. Information on Triton Energy 13
9. Taxation 14
10. Management and employees 15
11. Meetings 15
12. Settlement 16
13. Directors' interests 16
14. Overseas shareholders 16
15. Additional information 16
16. Action to be taken 16
17. Recommendation 17
APPENDICES
I DeGolyer and MacNaughton Report 18
II Financial Information on Triton Europe 21
III Additional Information on Triton Energy Convertible Preferred
Stock and Triton Energy Common Stock 35
IV Additional Information 40
The Scheme of Arrangement 51
Notice of Court Meeting 55
Notice of Extraordinary General Meeting 56
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3
<PAGE>
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EXPECTED TIMETABLE OF EVENTS
1994
Record Date February 22
Last day for lodging forms of proxy* March 1
Meetings of Triton Europe shareholders March 3
Last day for lodging Forms of Cash Election March 28
High Court hearing to sanction the Scheme March 30
Effective Date of Scheme March 31
Date by which Triton Energy Convertible Preferred Stock
certificates and cheques will be despatched April 11
* Forms of proxy for use at the Court Meeting will also be valid if handed to
the Chairman of that Meeting.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Panel on Takeovers and Mergers has indicated that the Code does not apply to
the Offer, since Triton Europe is not deemed to be a UK company for the purposes
of the Code.
- --------------------------------------------------------------------------------
4
<PAGE>
PART I
LETTER FROM THE INDEPENDENT DIRECTORS
TRITON
[LOGO]
(EUROPE PLC)
REGISTERED IN ENGLAND NO. 1711516
DIRECTORS: REGISTERED OFFICE
T. G. Finck (U.S.) 18-20 Grafton Street
W. I. Lee (U.S.) London W1X 4DD
M. A. R. Herzog (France)
R. B. Holland, III (U.S.)
J. J. Holtzscherer* (France)
D. P. Metcalfe*
W. R. Smith*
*Non-executive
February 8, 1994
TO THE HOLDERS OF SCHEME SHARES
Dear Shareholder,
RECOMMENDED OFFER BY TRITON ENERGY FOR THE MINORITY INTEREST IN TRITON EUROPE
INTRODUCTION
On January 17, 1994 it was announced that agreement had been reached between
your Board and Triton Energy whereby Triton Energy would make an offer for the
Ordinary Shares not already owned by it. The Offer will be effected by means of
a Scheme of Arrangement under section 425 of the Companies Act 1985 and values
the Company at L30.9 million, and the shares not already owned by the Triton
Energy group at L12.5 million. In order to become effective, the Scheme must,
inter alia, be approved by Scheme Shareholders at a special meeting convened by
order of the Court and a special resolution implementing the Scheme must be
passed at an Extraordinary General Meeting of Triton Europe.
In view of Triton Energy's interest in Triton Europe, a committee comprising the
directors of Triton Europe who are not directors of or otherwise connected with
Triton Energy was appointed to consider the Offer. The committee of Independent
Directors comprises Jean Jacques Holtzscherer, David Metcalfe and myself, as
Chairman of the committee.
The purpose of this letter is to explain the background to the Offer and why the
Independent Directors, having been so advised by Kleinwort Benson Securities,
consider it to be fair and reasonable so far as Scheme Shareholders are
concerned.
5
<PAGE>
THE TERMS OF THE OFFER
Full details of the Offer are set out in the Explanatory Statement from J.P.
Morgan on pages 10 to 17 of this document.
The Offer is being made on the basis that each Triton Europe Share is being
attributed a value of 37.5p.
The consideration for Triton Europe shareholdings will be satisfied by the issue
of Triton Energy Convertible Preferred Stock at an exchange rate of L1 =
$1.4925, the J.P. Morgan exchange rate at 5 p.m. on February 3, 1994, the latest
practicable time before the printing of this document. The precise number of
shares of Convertible Preferred Stock to be issued in respect of each Triton
Europe shareholding will be determined when the Scheme has been approved by
Scheme Shareholders and sanctioned by the High Court. Assuming Scheme
Shareholder approval, it is anticipated that the High Court will be asked to
sanction the Scheme on March 30, 1994.
The value attributed to each share of Convertible Preferred Stock for the
purposes of the Offer and for redemption will be 120 per cent of the average
closing price for one share of Triton Energy Common Stock on the NYSE for the
five trading days prior to the date of the Court hearing to sanction the Scheme.
Fractions of shares of Convertible Preferred Stock will not be issued and
fractional entitlements will be satisfied in cash on the basis of 37.5p for
every Scheme Share held.
For illustrative purposes only, assuming a Redemption Price of $37.30 (the price
calculated as at 5.00 p.m. London time on February 3, 1994), Scheme Shareholders
would receive one share of Convertible Preferred Stock for every 66 Ordinary
Shares then held.
PRINCIPAL TERMS OF THE CONVERTIBLE PREFERRED STOCK
Each share of Convertible Preferred Stock will be convertible into one share of
Triton Energy Common Stock. The Convertible Preferred Stock may be converted at
any time on or after October 1, 1994.
Each share of Convertible Preferred Stock will bear a fixed cash dividend of 5
per cent per annum on the Redemption Price, before applicable U.S. withholding
taxes, payable semi-annually in U.S. dollars on March 30 and September 30,
commencing on September 30, 1994.
The Convertible Preferred Stock will be redeemed at the Redemption Price on
March 30, 2004 either for cash or, at the option of Triton Energy, for Triton
Energy Common Stock.
It is not intended that the Convertible Preferred Stock will be listed on any
securities exchange. Triton Europe has been advised by Triton Energy that it
fully expects the Convertible Preferred Stock to be freely transferable in the
United States and that the necessary steps to ensure the same have been or will
be taken.
Further information on the Convertible Preferred Stock and Triton Energy Common
Stock is set out in Appendix III.
MARKET MAKING IN THE CONVERTIBLE PREFERRED STOCK
J.P. Morgan Securities Inc. has indicated its willingness to make a market in
the Convertible Preferred Stock. However, the Market Maker is under no
obligation to make such a market, and market making activity may be discontinued
at any time.
CASH FACILITY
As part of the Offer arrangements, Triton Energy has agreed to make a facility
available whereby individual Scheme Shareholders may elect to receive, on the
basis of 37.5p per share, up to L6,700.17 of the consideration due to them in
cash, being the sterling equivalent of
6
<PAGE>
$10,000. The maximum aggregate elections and fractional entitlements, which will
be satisfied under this facility, will be subject to a limit of L 1,340,033.50,
being the sterling equivalent of $2 million.
To the extent that fractional entitlements and cash elections in aggregate
exceed L 1,340,033.50, the maximum entitlement of each Scheme Shareholder to
cash under the Cash Election will be reduced accordingly.
Further information on the cash facility is set out in Part II, paragraph 3.
BACKGROUND TO AND INFORMATION ON TRITON EUROPE
Triton Europe's principal asset is a 50 per cent non-operated interest in the
Villeperdue field in the Paris Basin, France. The Company, which is registered
in England, has its head office in The Hague, The Netherlands, as well as
offices in Paris and London.
At May 31, 1993 Triton Europe had estimated proved net reserves of 8,188,000
barrels of oil, of which 7,502,000 were at Villeperdue and 549,000 barrels at
the Melun and Bagneaux fields. The Melun and Bagneaux fields were sold at the
end of October for L0.7 million. During the financial year ended May 31, 1993,
Villeperdue accounted for more than 86 per cent of the Company's total
production. The field produced on average 3,488 barrels of oil per day net to
the Company, a 20 per cent decline over the previous year. Current net
production is approximately 2,600 barrels per day.
The Company's financial performance in recent years has suffered as a result of
a decline in production and relatively high fixed costs. In September, the
Company announced its results for the financial year ended May 31, 1993. These
showed an operating loss of L50.3 million, largely due to a L41.0 million
writedown of the Company's oil and gas interests, of which approximately L37
million was attributed to the Paris Basin producing properties. The Group's loss
after taxation for the period was L34.4 million, representing a loss per share
of 41.72p. The audited net assets of the Company at May 31, 1993 were L41.19
million, equivalent to 49.9p per share.
On January 25, 1994 the Company announced its interim results for the six months
ended November 30, 1993. The results show an operating loss of L3.0 million
compared to a loss of L 1.1 million for the previous comparable period, despite
the measures announced in September to reduce administrative expenses. Although
they have now been largely implemented, little of the benefit of these measures
was experienced in the period. The results reflect the sharp fall in the price
of Brent oil from $18.50 at May 31, 1993 to $14.51 at November 30, 1993.
At November 30, 1993 the Triton Europe group had cash and short term investments
amounting to L7.14 million, equivalent to 8.7p per share.
The interim results are reproduced in full in Appendix II.
The financial performance of the Company and the decline in production has been
a concern to the Independent Directors for some time. Accordingly, following the
approach from Triton Energy, the Independent Directors appointed DeGolyer and
MacNaughton, a leading firm of independent petroleum consultants, to prepare a
valuation of the proved and probable reserves of Triton Europe's French
producing assets as at November 30, 1993. On the basis of the assumptions set
out in the report, notably an oil price achieved of $15.02 per barrel, the
proved reserves have been valued at $29 million (L 19.3 million) and the proved
and probable reserves at $37 million (L24.7 million). The value of the probable
reserves has not been risk adjusted. These values equate to 23.5p and 30.0p
respectively per Ordinary Share and compare to 41.2p per Ordinary Share, being
the carrying value attributable to these assets in the last published accounts.
The DeGolyer and MacNaughton Report is reproduced as Appendix I.
7
<PAGE>
In light of the above, the Independent Directors believe that the Offer fairly
reflects the prospects and underlying asset value of the Company and provides
Scheme Shareholders with the following principal benefits:
- a premium of 87.5 per cent over the price of an Ordinary Share of 20p on
January 14, 1994, the last dealing day prior to the announcement of the
Offer and a premium of 15.4 per cent over the closing price for the shares
on February 3, 1994, the last dealing day prior to the printing of this
document;
- a source of income on your investment through the dividends payable on the
Convertible Preferred Stock and/or through investing any cash received as
consideration pursuant to a Cash Election; and
- the substantially greater liquidity of Triton Energy shares which Scheme
Shareholders will receive upon conversion of the Convertible Preferred
Stock compared with the present limited liquidity in Triton Europe shares.
MANAGEMENT AND EMPLOYEES
Triton Energy has given assurances to the Board of Triton Europe that the
existing terms and conditions of employment of all employees in Triton Europe,
including pension rights, will be fully safeguarded.
It is intended that the Independent Directors will resign from the Board when
the Scheme becomes effective.
MEETINGS TO EFFECT THE SCHEME
You will find set out at the end of this document notices convening a Court
Meeting and an Extraordinary General Meeting. These meetings will be held at 20
Fenchurch Street, London EC3P 3DB on March 3, 1994 to consider the proposals to
effect the Scheme.
At the Court Meeting, voting will be by poll and shareholders entitled to attend
and vote will be entitled to exercise one vote for each share held.
The Triton Energy group, which currently owns 49,058,805 Ordinary Shares
representing 59.47 per cent of the issued ordinary share capital of Triton
Europe, will not vote at the meetings of Scheme Shareholders to be called to
consider the Scheme. However, the next three largest shareholders in Triton
Europe who together own or control 18.33 per cent of the Company or 45.22 per
cent of the shares not currently owned by the Triton Energy group have indicated
their intention to vote in favour of the Scheme.
ACTION TO BE TAKEN
Details of the steps necessary to implement the Scheme are set out in the
Explanatory Statement from J.P. Morgan in Part II. Your attention is drawn to
the paragraph headed "Action to be taken".
WHETHER OR NOT YOU PROPOSE TO ATTEND THE MEETINGS IN PERSON, YOU ARE ASKED TO
COMPLETE, SIGN AND RETURN AS SOON AS POSSIBLE THE ENCLOSED FORMS OF PROXY IN
ACCORDANCE WITH THE INSTRUCTIONS PRINTED THEREON. THE RETURN OF THE FORMS OF
PROXY WILL NOT PREVENT YOU FROM ATTENDING THE MEETINGS AND VOTING IN PERSON
SHOULD YOU SO WISH.
SCHEME SHAREHOLDERS SHOULD NOTE THAT IF THE SCHEME IS APPROVED AND BECOMES
EFFECTIVE, IT WILL BE BINDING UPON ALL HOLDERS OF SCHEME SHARES IRRESPECTIVE OF
WHETHER THEY VOTED IN FAVOUR OF THE SCHEME. ACCORDINGLY, YOU ARE URGED TO
CONSIDER WHETHER YOU WOULD WISH TO ELECT FOR CASH UNDER THE CASH ELECTION IN THE
EVENT THE SCHEME WERE TO BECOME EFFECTIVE. IF YOU WOULD, YOU MUST COMPLETE AND
RETURN THE ENCLOSED FORM OF CASH ELECTION AS SOON AS POSSIBLE AND IN ANY EVENT
BY NOT LATER THAN 3 P.M. ON MARCH 28, 1994, ACCOMPANIED BY
8
<PAGE>
THE SHARE CERTIFICATES AND OTHER DOCUMENTS OF TITLE FOR ALL ORDINARY SHARES
REGISTERED IN YOUR NAME. COMPLETION AND RETURN OF THE FORM OF CASH ELECTION WILL
NOT PRECLUDE YOU FROM VOTING AT THE MEETINGS IN WHICHEVER WAY YOU WISH.
In deciding whether or not to elect for cash under the terms of the Cash
Election, Scheme Shareholders' attention is drawn to the accompanying document
entitled "Information on Triton Energy Corporation" and the risk factors set out
therein. In addition, Scheme Shareholders should be aware that liquidity in the
Convertible Preferred Stock may be limited, that the market making activity
referred to above may be discontinued at any time, and that the cost of dealing
in the Convertible Preferred Stock may be significant for small shareholdings.
RECOMMENDATION
THE INDEPENDENT DIRECTORS, WHO HAVE BEEN SO ADVISED BY KLEINWORT BENSON
SECURITIES, CONSIDER THAT THE TERMS OF THE OFFER ARE FAIR AND REASONABLE AS FAR
AS SCHEME SHAREHOLDERS ARE CONCERNED. ACCORDINGLY, THE INDEPENDENT DIRECTORS
RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOUR OF THE NECESSARY RESOLUTIONS AT THE
MEETINGS TO EFFECT THE OFFER, AS THEY INTEND TO DO IN RESPECT OF THEIR OWN
BENEFICIAL SHAREHOLDINGS AMOUNTING TO 12,000 SHARES.
In considering whether or not to elect for cash under the terms of the Cash
Election, Scheme Shareholders are advised to seek their own professional
financial advice.
Yours sincerely,
W. R. SMITH
CHAIRMAN OF THE COMMITTEE OF INDEPENDENT DIRECTORS
9
<PAGE>
PART II
EXPLANATORY STATEMENT FROM J.P. MORGAN
Morgan Guaranty J P MORGAN
Trust Company
of New York.
PO Box 161
60 Victoria Embankment
London EC4 OJP
February 8, 1994
TO THE HOLDERS OF SCHEME SHARES
Dear Shareholder,
RECOMMENDED OFFER BY TRITON ENERGY FOR THE MINORITY INTEREST IN TRITON EUROPE
1. INTRODUCTION
On January 17, 1994, the Boards of Triton Energy and Triton Europe announced
that they had reached agreement on the terms of an offer by Triton Energy for
the Minority Interest in Triton Europe. The offer will be effected by means of a
Scheme of Arrangement under section 425 of the Companies Act 1985 pursuant to
which Triton Energy proposes to acquire all of the Ordinary Shares not already
owned by the Triton Energy group.
In proposing the Scheme, the directors of Triton Energy have been advised by
J.P. Morgan and the Independent Directors of Triton Europe have been advised by
Kleinwort Benson Securities. We have been requested and authorised by Triton
Europe and Triton Energy to write to you on their behalf in order to explain the
provisions and the effect of the Scheme. This statement shall not confer rights
or remedies against J.P. Morgan upon any person receiving or relying on this
document, nor will J.P. Morgan treat any such person as being, by virtue
thereof, its customer.
YOUR ATTENTION IS DRAWN TO THE LETTER FROM MR W.R. SMITH, ON BEHALF OF THE
INDEPENDENT DIRECTORS, WHICH CONTAINS THEIR RECOMMENDATION IN RESPECT OF THE
SCHEME. THOSE DIRECTORS OF TRITON EUROPE WHO HOLD SCHEME SHARES INTEND TO VOTE
IN FAVOUR OF THE SCHEME.
2. SUMMARY OF THE SCHEME
Under the Scheme, all the Scheme Shares will be cancelled and, in consideration
of which, Scheme Shareholders will be entitled to receive one share of Triton
Energy Convertible Preferred Stock, convertible into one share of Triton Energy
Common Stock, for every multiple of that number of Scheme Shares whose
equivalent value in U.S. dollars most nearly equals (without exceeding) the
Redemption Price.
For this purpose each Scheme Share will be attributed a value of 37.5p and its
equivalent in U.S. dollars, $0.56, has been calculated on the basis of the J.P.
Morgan exchange rate of $1.4925.
The Redemption Price will be the amount in U.S. dollars equivalent to 120% of
the average closing price on the NYSE for one share of Triton Energy Common
Stock on the five trading days prior to the date of the Court hearing to
sanction the Scheme.
10
<PAGE>
Based on the average closing price of Triton Energy Common Stock of $31.08 (as
reported on Datastream) on the five trading days ending on February 3, 1994 (the
latest practicable date prior to the printing of this document), the Redemption
Price would be $37.30 per share and Scheme Shareholders would receive one share
of Convertible Preferred Stock for every 66 Scheme Shares.
Fractions of shares of Convertible Preferred Stock will not be issued.
Fractional entitlements will instead be satisfied in cash at a rate of 37.5p for
each Scheme Share.
In giving any opinion in this or any other document, J.P. Morgan has relied upon
and assumed without independent verification, the accuracy and completeness of
all information that was publicly available or furnished to it by, or otherwise
received by it from or on behalf of Triton Energy and Triton Europe.
Any subsequent developments may affect J.P. Morgan's opinion and it has no
obligation to update, revise or reaffirm its opinion, unless such developments
become known by it.
3. CASH ELECTION
Instead of receiving Convertible Preferred Stock, each Scheme Shareholder may
make a Cash Election at the rate of 37.5p for each Scheme Share, up to a maximum
of L6,700.17, being the sterling equivalent of $10,000 per Scheme Shareholder,
subject to the further provisions of this section 3.
The total amount of cash payable by Triton Energy, including in respect of
fractions, as a consequence of the Cash Elections will not exceed L 1,340,033.50
(the sterling equivalent of $2,000,000). If the total amount of cash otherwise
payable by Triton Energy as a result of the Cash Elections would exceed L
1,340,033.50, the maximum entitlement of each Scheme Shareholder to receive cash
under the Cash Election will be reduced accordingly. Cash will be allocated
first to fractional entitlements. To the extent that the maximum Cash Election
is reduced below L6,700.17, each Scheme Shareholder will, in relation to that
part of his holding for which his Cash Election has been unsuccessful, receive
Convertible Preferred Stock to which he would otherwise have been entitled under
the Scheme as if he had not made a Cash Election.
Based on Triton Europe's shareholder register as at December 31, 1993, if every
holder of Scheme Shares elected to receive cash to the fullest extent
permissible under the terms of the Offer, Triton Energy would be able to satisfy
all Cash Elections in full up to L6,700.17 per Scheme Shareholder.
J.P. Morgan, financial adviser to Triton Energy, is satisfied that adequate
resources are available to Triton Energy to meet all Cash Elections under the
terms of the Offer.
Your attention is drawn to section 16 of this letter concerning the steps you
must take to make your Cash Election.
4. CONDITIONS
The Scheme will become fully effective and binding if:
(i) a resolution to approve the Scheme is passed by a majority in number
representing three-fourths in value of the Scheme Shares held by those
Scheme Shareholders present and voting either in person or by proxy at
the Court Meeting;
(ii) the necessary resolution to give effect to the Scheme is duly passed by
Scheme Shareholders at an Extraordinary General Meeting of Triton
Europe; and
(iii) the Scheme is sanctioned by the Court and an office copy of the Court
Order is delivered to the Registrar of Companies in England and Wales
for registration.
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The necessary steps to make the Scheme effective will not be taken:
(a) until any necessary filings with the U.S. Securities and Exchange
Commission have been completed; and
(b) if any government or governmental, quasi-governmental, supranational or
trade agency or regulatory body shall have, prior to the Effective Date
of the Scheme, instituted or threatened any action, suit or
investigation to restrain, prohibit, restrict materially, delay
materially or otherwise challenge the proposed acquisition or shall
have threatened to take any action as a result of its implementation.
The Independent Directors reserve the right to waive the requirements in these
paragraphs (a) and (b).
If the Scheme does not become fully effective by June 30, 1994, or by such later
date as Triton Europe and Triton Energy may jointly approve and the Court may
allow, it will lapse and will be of no further effect.
5. TRITON ENERGY CONVERTIBLE PREFERRED STOCK
Shareholders are referred to the summary of the Convertible Preferred Stock set
out on page 6, and the additional information on the Convertible Preferred Stock
and the summary of the Triton Energy Common Stock which constitute Appendix III.
6. FINANCIAL EFFECTS OF THE SCHEME FOR TRITON EUROPE SHAREHOLDERS
If the Scheme becomes effective Scheme Shareholders are expected, on the bases
described below, to receive an increase in both income and capital value.
The following tables describe, for illustrative purposes only, the effect of the
Scheme proposals for holders of Scheme Shares, on the basis of the notes set out
below.
(A) CAPITAL
The following table shows the effect on capital value for a holder of 100 Scheme
Shares who receives Convertible Preferred Stock:
<TABLE>
<CAPTION>
NOTE
<S> <C> <C>
Convertible Preferred Stock receivable for 100 Scheme Shares (i) L37.50
Value of 100 Scheme Shares (ii) L20.00
------
Increase in value L17.50
Representing a percentage increase of 87.5%
</TABLE>
NOTES
(i) Based on a value of 37.5p per Scheme Share attributable to the
consideration (see "Value of the Offer" below where, inter alia, an
exchange rate of L1 = $1.4925 is assumed).
(ii) Based on the closing middle market quotation of 20p as derived from the
London Stock Exchange Daily Official List for Ordinary Shares on
January 14, 1994 (the business day prior to the announcement of the
Scheme).
(B) DIVIDENDS
The following table shows the effect on dividend income after U.S. withholding
taxes for a holder of 100 Scheme Shares who receives the Convertible Preferred
Stock:
Dividends on Convertible Preferred Stock receivable for 100 Scheme
<TABLE>
<CAPTION>
<S> <C> <C>
Shares (i) L1.59
Dividends on 100 Scheme Shares (ii) L0.00
-----
Increase in income L1.59
</TABLE>
NOTES
(i) Assumes an exchange rate of L1=$1.4925, a 15% U.S. withholding tax on
dividends, and that a full dividend is declared and paid on the
Convertible Preferred Stock.
(ii) No dividends are currently payable on Triton Europe Ordinary Shares;
assumes that no such dividends are payable in the future.
12
<PAGE>
VALUE OF THE OFFER
The Convertible Preferred Stock has been valued by J.P. Morgan as at February 3,
1994 at not less than 100 per cent of the Redemption Price. This implies a value
of not less than 37.5p for each Scheme Share on the basis of the J.P. Morgan
exchange rate of $1.4925.
J.P. Morgan's valuation has been arrived at employing customary valuation
techniques on the basis of a number of factors, including but not limited to the
conversion premium referred to in section 2 hereof, the dividend, and the
historical volatility of Triton Energy Common Stock, and it has been based on a
number of assumptions prevailing on February 3, 1994, including but not limited
to the interest rates prevailing on that date and the state of the market for
similar securities, information supplied to J.P. Morgan by or on behalf of
Triton Energy and Triton Europe as at the date hereof, and other factors
affecting the market for shares.
The Convertible Preferred Stock may trade at prices higher or lower than the
Redemption Price, depending on many factors including prevailing interest rates,
the financial condition, business, assets, results of operations or prospects of
Triton Energy, or financial conditions affecting the value of Triton Energy's
securities, and the market for similar securities.
On the bases set out above, the Scheme places an aggregate value of
approximately L12.5 million on the Minority Interest, and a value of
approximately L30.9 million on the entire issued ordinary share capital of
Triton Europe.
7. INFORMATION ON TRITON EUROPE
Information on the recent history of Triton Europe is set out in the letter from
the Independent Directors in Part I of this document.
Financial information on the Company, including the interim results announced on
January 25, 1994, is set in Appendix II of this document.
The DeGolyer and MacNaughton Report on the Company's French producing assets as
of November 30, 1993 is reproduced in Appendix I.
8. INFORMATION ON TRITON ENERGY
Triton Energy is an independent energy company engaged in international oil and
gas exploration and production through wholly-owned and partly-owned
subsidiaries and affiliates, some of which (including Triton Europe) are
publicly-held. In addition to its holding in Triton Europe, Triton Energy
currently has interests in producing properties and development operations in
Colombia, Argentina, Indonesia, the United States, Canada and Australia and has
oil and gas interests or conducts exploration activities in these areas as well
as in Malaysia/Thailand and New Zealand. Triton Energy is headquartered in
Dallas, Texas.
During 1993, Triton Energy made several changes in its management and initiated
a strategic review of its existing exploration and development programmes and
non-oil and gas businesses. Triton Energy is focusing its strategy on high
potential exploration and development opportunities in Colombia,
Malaysia/Thailand and Argentina, and in new international oil and gas ventures.
Triton Energy has a net revenue interest of 9.24 per cent in the Cusiana and
Cupiagua Fields in Colombia. The fields have been declared commercial by
Ecopetrol, the Colombian national oil company, and are expected to produce a
peak of 150,000 gross barrels of oil per day in the initial production phase by
December 1995.
Triton Energy had net proved reserves of 104.0 million barrels of liquids, and
158.7 billion cubic feet of gas as at May 31, 1993.
13
<PAGE>
In the year ended May 31, 1993, Triton Energy's total revenues were $110.2
million. In the same period Triton Energy made a loss from continuing operations
(before extraordinary items and the cumulative effect of accounting changes) of
$81.8 million. As at May 31, 1993, Triton Energy had total shareholders' equity
of $255.4 million (and $274.2 million at November 30, 1993).
At January 14, 1994, Triton Energy's authorised capital was 200,000,000 shares
of common stock and 5,000,000 shares of preferred stock. Approximately 35.4
million common shares and no preferred shares were in issue. Up to 200,000
shares of preferred stock may be issued to holders of common stock in certain
circumstances under Triton Energy's Shareholder Rights Plan.
Triton Energy's primary share quotation is on the NYSE. Its shares were trading
at $31.50 at 5 p.m. London time on February 3, 1994 (as reported on Datastream),
implying a market capitalisation of about $1,116 million. Triton Energy's shares
are also quoted on the Toronto Stock Exchange.
Further information on Triton Energy is set out in the accompanying document
entitled "Information on Triton Energy Corporation
9. TAXATION
(A) UNITED KINGDOM
The comments below and in section 11 of Appendix IV are intended as a general
guide to the position under current United Kingdom law and Inland Revenue
practice and relate only to certain limited aspects of the taxation position of
Scheme Shareholders. In particular they only deal with the position of Triton
Europe shareholders resident in the United Kingdom for tax purposes who hold
their shares as an investment.
Any Scheme Shareholder who is in any doubt about his/her own tax position should
consult his/her professional adviser.
TAXATION OF CAPITAL GAINS
Liability to United Kingdom taxation in respect of capital gains will depend
upon the individual circumstances of Scheme Shareholders and on the form of
consideration which they elect to receive.
(i) Cash element
Implementation of the Scheme will, to the extent that a Scheme Shareholder
elects to receive cash or receives cash pursuant to a fractional
entitlement, constitute a disposal or part disposal for the purposes of
United Kingdom taxation of capital gains. Such a disposal may, depending
upon the individual circumstances of the holders of Scheme Shares, give
rise to a liability to United Kingdom taxation or crystallise a capital
loss.
(ii) Convertible Preferred Stock
The capital gains position of Scheme Shareholders who receive Convertible
Preferred Stock is not clear as it depends upon whether the Scheme is a
"scheme of reconstruction or amalgamation" for capital gains purposes.
This in turn depends on a number of factors, including the extent to which
Scheme Shareholders elect to receive cash. If the Scheme does not
constitute such a scheme, the above treatment will apply notwithstanding
that a Scheme Shareholder receives Convertible Preferred Stock.
Where the Scheme does constitute a scheme of reconstruction or
amalgamation, a Scheme Shareholder who, together with persons connected
with him/her, holds not more than five per cent of any class of the issued
share capital of Triton Europe, will not be treated as making a disposal
of his Scheme Shares to the extent that he/she receives Convertible
Preferred Stock. However, to the extent that he/she receives cash
representing any
14
<PAGE>
fractional entitlement, this will, unless the Inland Revenue is satisfied
that the amount of cash received is small in comparison with the market
value of the Scheme Shares, constitute a disposal.
Scheme Shareholders who, together with persons connected with them, do
hold more than 5 per cent of any class of the issued share capital of
Triton Europe will, subject to the Inland Revenue being satisfied that the
Scheme is being effected for bona fide commercial reasons and does not
form part of any tax avoidance scheme, be treated in the same way.
A subsequent disposal (including redemption) of the Convertible Preferred
Stock may give rise to a taxable gain or allowable loss for the purposes
of United Kingdom taxation of capital gains, depending on individual
circumstances.
Conversion of the Convertible Preferred Stock into Triton Energy Common
Stock should not of itself (and to the extent that there is no cash
adjustment in respect of fractional entitlements) give rise to a charge to
United Kingdom taxation. The conversion should constitute a reorganisation
of the share capital of Triton Energy for the purposes of United Kingdom
capital gains tax with the result that the Triton Energy Common Stock will
be treated as the same asset as the Triton Energy Convertible Preferred
Stock.
For additional information on United Kingdom taxation see section 11(a), of
Appendix IV.
(B) UNITED STATES
See section 11(b) of Appendix IV.
(C) OTHER JURISDICTIONS
A Scheme Shareholder who is not resident in the United Kingdom should consult
his/her own tax advisers concerning his/her tax liabilities in respect of the
Scheme on dividends received from Triton Energy, as to whether there is a
provision for exemption or refund of any United States withholding tax under the
terms of an applicable double taxation convention (if any) and whether there is
any foreign taxation imposed on the dividend income he/she receives.
10. MANAGEMENT AND EMPLOYEES
The board of Triton Energy has confirmed that all of the existing rights,
including pension rights, of the management and employees of the Triton Europe
group will be fully safeguarded.
11. MEETINGS
(A) COURT MEETING
A meeting has been convened by the order of the Court for the purpose of
enabling the holders of the Scheme Shares to consider and, if thought fit, to
approve the Scheme. The Scheme requires the approval of a majority in number
representing not less than three-fourths in nominal value of the Scheme Shares
held by those present and voting either in person or by proxy at such meeting.
(B) EXTRAORDINARY GENERAL MEETING
An Extraordinary General Meeting of Triton Europe has been convened for the
purpose of passing the necessary Special Resolution to give effect to the
Scheme.
As part of the reorganisation of the share capital of Triton Europe, the Scheme
Shares shall be designated as 'A' Scheme Shares and 'B' Scheme Shares according
to whether a Cash Election Notice has been received in respect of such shares.
Immediately after conversion all Scheme Shares will be cancelled.
The Triton Energy group will not vote at either the Court Meeting or the
Extraordinary General Meeting.
15
<PAGE>
If the Scheme is approved by the requisite majority at both meetings and the
Court subsequently sanctions the Scheme, it will be binding upon all holders of
the Scheme Shares irrespective of whether they attended the Court Meeting and/or
the Extraordinary General Meeting and of whether or how they voted at either
such meeting.
Notices convening these meetings, which will be held on March 3, 1994 at 20
Fenchurch Street, London EC3P 3DB, are set out on pages 55 to 56 of this
document.
12. SETTLEMENT
Certificates for the Triton Energy Convertible Preferred Stock and, where
applicable, cheques for the consideration payable under the Cash Election and
for fractional entitlements, will be despatched within five normal London
business days of the Effective Date to holders of the Scheme Shares at the
address appearing in the shareholder register of Triton Europe at the close of
business on the Record Date. In the case of joint holders, certificates and
cheques will be despatched to the joint holder whose name appears first in the
register in respect of the joint holding concerned or in accordance with any
special instructions regarding communications. All certificates and cheques will
be sent by pre-paid first-class post at the risk of the person entitled thereto.
As from the Effective Date, existing certificates representing holdings of
Scheme Shares will cease to be valid and Scheme Shareholders should, if so
requested by Triton Energy, send such certificates to Triton Energy for
cancellation.
Where a Cash Election has been made by a Scheme Shareholder and the Form of Cash
Election submitted is not accompanied by the relevant share certificate(s)
and/or other documents of title, the cheque for the consideration payable under
the relevant Cash Election will not be despatched until such share
certificate(s) and/or documents of title or indemnities satisfactory to Triton
Energy has been received by the Receiving Bank (see "Additional Notes Regarding
Completion of this Form" on page 4 of the Form of Cash Election).
No transfer of Scheme Shares will be registered after 3.00 pm on the Record
Date. The listing of Ordinary Shares on the London Stock Exchange will be
cancelled on the Scheme becoming effective.
13. DIRECTORS' INTERESTS
The interests of the directors of Triton Europe are set out in Appendix IV. The
effect of the Scheme on those interests does not differ from its effect on the
like interests of other persons.
14. OVERSEAS SHAREHOLDERS
It is the responsibility of Scheme Shareholders resident overseas to ascertain
whether the sale, transfer, conversion or delivery of the Triton Energy
Convertible Preferred Stock will be subject to any restrictions or will require
compliance with any formalities imposed by the laws or regulations of, or by any
body or authority located in, the jurisdiction in which they are resident.
15. ADDITIONAL INFORMATION
Additional information is set out in Appendix IV.
16. ACTION TO BE TAKEN
(A) TO VOTE AT THE MEETINGS
You will find enclosed with this document two reply paid forms of proxy:
(i) Pink for use at the Court Meeting; and
(ii) Blue for use at the Extraordinary General Meeting.
Whether or not you propose to attend the relevant meetings in person, you are
requested to
16
<PAGE>
complete and return the enclosed forms of proxy in accordance with the
instructions printed thereon as soon as possible and in any event so as to
arrive at the Registrars of the Company, the National Westminster Bank Plc,
Registrar's Department, PO Box 82, Caxton House, Redcliffe Way, Bristol BS99 7YA
not later than 48 hours before the time appointed for the Court Meeting. In the
case of the pink form only, if it is not returned to the Registrars by 48 hours
before the time of the meeting, it may be handed to the Chairman of the Court
Meeting and still be valid. The lodging of a form of proxy will not prevent you
from attending the meetings and voting in person if you so wish.
(B) CASH ELECTION
If you wish to receive cash in lieu of all or part of your entitlement to Triton
Energy Convertible Preferred Stock up to a maximum of L6,700.17 (being the
sterling equivalent of $10,000) you must complete the enclosed Form of Cash
Election in accordance with the instructions therein, and send it, accompanied
by the share certificates and other documents of title for all Ordinary Shares
registered in your name, by post to, or lodge it by hand with the Receiving Bank
of the Company, National Westminster Bank Plc, Registrar's Department, New
Issues Section, PO Box 859, The Lombard Centre, Consort House, East Street,
Bedminster, Bristol BS99 1XZ, or by hand only with National Westminster Bank
Plc, Registrar's Department, New Issues Section, 15 Featherstone Street, London
EC1 8QS, as soon as possible, but in any event so as to be received not later
than 3 p.m. on March 28, 1994. Scheme Shareholders are referred to the enclosed
Form of Cash Election for further instructions as to making a Cash Election, AND
SHOULD NOTE THAT FORMS OF CASH ELECTION WILL ONLY BE VALID IF RECEIVED FROM
SCHEME SHAREHOLDERS WHOSE NAMES APPEAR ON THE REGISTER OF MEMBERS OF TRITON
EUROPE AT THE CLOSE OF BUSINESS ON THE RECORD DATE OR WHO ARE UNCONDITIONALLY
ENTITLED TO BE SO REGISTERED ON THAT DATE.
Scheme Shareholders who do not return the Form of Cash Election so completed
together with all their share certificates and other documents of title, will
receive Triton Energy Convertible Preferred Stock in proportion to their
shareholdings at a rate of 37.5p for each Scheme Share.
THE SCHEME, ONCE EFFECTIVE, WILL BE BINDING ON ALL SCHEME SHAREHOLDERS. WHETHER
OR NOT YOU INTEND TO VOTE IN FAVOUR OF THE SCHEME, YOU SHOULD RETURN A COMPLETED
FORM OF CASH ELECTION IF YOU WOULD WISH TO RECEIVE CASH CONSIDERATION IN RESPECT
OF ELIGIBLE SHAREHOLDINGS.
(C) RETURN OF TRITON EUROPE ORDINARY SHARE CERTIFICATES
After the Scheme becomes effective you should on request return your Ordinary
Share certificates to the National Westminster Bank Plc, Registrar's Department,
PO Box 82, Caxton House, Redcliffe Way, Bristol BS99 7YA for cancellation.
APART FROM COMPLETING AND RETURNING THE ENCLOSED FORMS OF PROXY AND (IF YOU SO
WISH) MAKING A CASH ELECTION YOU NEED TAKE NO FURTHER ACTION.
17. RECOMMENDATION
Your attention is drawn to the recommendation of the Independent Directors set
out in Part I of this document.
Yours sincerely
for MORGAN GUARANTY TRUST COMPANY OF NEW YORK
THIS "EXPLANATORY STATEMENT FROM J.P. MORGAN" HAS BEEN APPROVED BY MORGAN
GUARANTY TRUST COMPANY OF NEW YORK FOR THE PURPOSES OF RULE 5-9 OF THE RULES OF
THE SECURITIES AND FUTURES AUTHORITY. MORGAN GUARANTY TRUST COMPANY OF NEW YORK
IS A MEMBER OF THE SECURITIES AND FUTURES AUTHORITY.
17
<PAGE>
APPENDIX I
DEGOLYER AND MACNAUGHTON REPORT
DEGOLYER AND MACNAUGHTON
ONE ENERGY SQUARE
DALLAS, TEXAS 75206
January 14, 1994
Triton Europe plc
Fitzroy House
18-20 Grafton Street
London W1X 4DD
England
Gentlemen:
Pursuant to your request, we have prepared estimates, as of November 30, 1993,
of the extent and value of the proved and probable crude oil reserves of certain
properties owned by Triton France S.A., hereinafter referred to as "Triton
France." Triton France is a wholly owned subsidiary of Triton Europe plc,
hereinafter referred to as "Triton Europe". Also included are estimates of
risk-adjusted probable reserves. The properties, located in the Paris Basin of
France, are the Villeperdue (including the Fontaine au Bron Extension), La Motte
Noire, and Hautefeuille fields.
Estimates of oil reserves and future net revenue should be regarded only as
estimates that may change as further production history and additional
information become available. Not only are such reserve and revenue estimates
based on that information which is currently available, but such estimates are
also subject to the uncertainties inherent in the application of judgmental
factors in interpreting such information.
Information used in the preparation of this report was obtained from Triton
Europe. In our preparation of this report we have relied, without independent
verification, upon information furnished by Triton Europe with respect to
property interests, production from such properties, current costs of operation
and development, current prices for production, agreements relating to current
and future operations and sale of production, and various other information and
data that were accepted as represented. A field examination of the properties
was not considered necessary for the purposes of this report.
Petroleum reserves included in this report are classified by degree of proof as
proved or probable. Proved reserves are judged to be economically producible in
future years from known reservoirs under existing economic and operating
conditions and assuming continuation of current regulatory practices using
conventional production methods and equipment. In the analyses of
production-decline curves, reserves were estimated only to the limit of economic
rates of production under existing economic and operating conditions using
prices and costs as of the date the estimate is made, including consideration of
changes in existing prices provided only by contractual arrangements but not
including escalations based upon future conditions. The petroleum reserves are
classified as follows:
PROVED -Reserves that have been proved to a high degree of certainty by
analysis of the producing history of a reservoir and/or by volumetric
analysis of adequate geological and engineering data. Commercial
productivity has been established by actual production, successful testing,
or in certain cases by favorable core analyses and electrical-log
interpretation when the producing characteristics of the formation are
known from nearby fields. Volumetrically, the structure, areal extent,
volume, and characteristics of the reservoir are well defined by a
reasonable interpretation of adequate subsurface well control and by known
continuity of hydrocarbon-saturated material above known fluid contacts, if
any, or above the lowest known structural occurrence of hydrocarbons.
DEVELOPED -Reserves that are recoverable from existing wells with
current operating methods and expenses.
18
<PAGE>
Developed reserves include both producing and non-producing reserves.
Estimates of producing reserves assume recovery by existing wells
producing from present completion intervals with normal operating
methods and expenses. Developed nonproducing reserves are in
reservoirs behind the casing or at minor depths below the producing
zone and are considered proved by production from other wells in the
field, by successful drill-stem tests, or by core analyses from the
particular zones. Nonproducing reserves require only moderate expense
to be brought into production.
UNDEVELOPED - Reserves that are recoverable from additional wells yet
to be drilled.
Undeveloped reserves are those considered proved for production by
reasonable geological interpretation of adequate subsurface control in
reservoirs that are producing or proved by other wells but are not
recoverable from existing wells. This classification of reserves
requires drilling of additional wells, major deepening of existing
wells, or installation of enhanced recovery or other facilities.
Reserves recoverable by enhanced recovery methods, such as injection of external
fluids to provide energy not inherent in the reservoirs, may be classified as
proved developed or proved undeveloped reserves depending upon the extent to
which such enhanced recovery methods are in operation. These reserves are
considered to be proved only in cases where a successful fluid-injection program
is in operation, a pilot program indicates successful fluid injection, or
information is available concerning the successful application of such methods
in the same reservoir and it is reasonably certain that the program will be
implemented.
PROBABLE - Reserves susceptible of being proved that are based on
reasonable evidence of producible hydrocarbons within the limits of a
structure or reservoir above known or inferred fluid contacts but are
defined to a lesser degree of certainty because of more limited well
control and/or the lack of definitive production tests. Probable reserves
may include extensions of proved reservoirs or other reservoirs that have
not been tested at commercial rates of flow or reserves recoverable by
enhanced recovery methods that have not yet been tested in the same
reservoir or where there is reasonable uncertainty that the program will
be implemented.
The extent to which probable reserves ultimately may be reclassified as proved
reserves is dependent upon future drilling, testing, and well performance. The
degree of risk to be applied in evaluating probable reserves is influenced by
economic and technological factors as well as the time element. Probable
reserves in this report are presented both before and after adjustment in
consideration of these additional risks in order to make them comparable to
proved reserves.
Estimates of reserves were prepared by the use of standard geological and
engineering methods generally accepted by the petroleum industry. The method or
combination of methods utilized in the analysis of each reservoir was tempered
by experience in the area, consideration of the stage of development of the
reservoir, and quality and completeness of basic data. For depletion-type
reservoirs or reservoirs whose performance disclosed reliable declines in
producing-rate trends or other diagnostic characteristics, reserves were
estimated from appropriate decline curves or other performance relationships. In
the analysis of decline curves, reserves were estimated to the limits of
economic production based on current economic conditions. Proved reserves
estimated in this report are classified as proved developed.
The gross and Triton France's net oil reserves, as of November 30, 1993, of the
properties evaluated herein are estimated below, expressed in thousands of
barrels (Mbbl):
<TABLE>
<CAPTION>
GROSS NET
(MBBL) (MBBL)
<S> <C> <C>
Proved 13,962 6,957
Probable 1 14,467 7,236
Risk-Adjusted Probable 2 7,234 3,618
<FN>
1 Probable reserves have not been risk adjusted.
2 Estimates were obtained by applying an appropriate factor to the probable
reserves to account for risk.
</TABLE>
Values of the net proved reserves are expressed in terms of estimated future net
revenue and present worth of future net revenue. Future net revenue is
calculated by deducting estimated production taxes, operating expenses, and
capital costs from gross revenue as appropriate for each Triton France
19
<PAGE>
interest. Present worth is defined as future net revenue discounted at specified
arbitrary discount rates compounded monthly over the expected period of
realization. In this report, present worth values using a discount rate of 10
percent are reported.
Revenue values in this report were estimated using initial prices, costs, and
escalation parameters provided by Triton Europe and its financial advisors,
Kleinwort Benson Securities Limited. Current operating costs, also provided by
Triton Europe, were used in estimating future costs require to operate the
properties. In certain cases future costs, either higher or lower than current
costs, may have been used because of anticipated changed operating conditions.
In addition, future costs were escalated according to schedules provided by
Triton Europe and Kleinwort Benson Securities Limited. This schedule included an
initial oil price of United States (U.S.)$15.02 per barrel escalated at 2.5
percent per year after the first year. (This price is based on U.S.$1.00 plus
the Brent crude price, as quoted in the January 11, 1994 edition of Financial
Times.) Operating expenses and capital costs also were escalated at 2.5 percent
per year after the first year.
In our opinion, the price and cost assumptions are not consistent with the rules
and regulations promulgated by the Securities and Exchange Commission or
statements promulgated by the Financial Accounting Standards Board. These rules
and regulations contain specific provisions that prohibit the use of price
escalations not set forth in contracts and the reporting of probable reserves.
Accordingly, revenue figures and probable reserves from this report should not,
under any circumstances, be used or relied upon to meet the requirements
thereof.
Data available through November 30, 1993, were used in estimating gross ultimate
recovery. Where applicable, the estimated cumulative production, as of November
30, 1993, was subtracted from the estimated gross ultimate recovery to determine
the estimated gross reserves.
Revenue and costs for the properties are reported in U.S. dollar equivalents
based on an exchange rate of 1 French franc being equivalent to U.S.$0.168677,
as of November 30, 1993. No U.S. or French corporate income taxes were taken
into account in the future net revenue estimate herein.
Estimated future net revenue and present worth attributable to Triton France's
interests in the proved and proved-plus-probable reserves of the properties
appraised, as of November 30, 1993, under the aforementioned qualifications
concerning future prices and costs are summarized as follows, expressed in
thousands of U.S. dollars (MU.S.$).
<TABLE>
<CAPTION>
PRESENT
FUTURE NET WORTH AT 10
REVENUE PERCENT
(MU.S.$) (MU.S.$)
<S> <C> <C>
Proved 42,054 28,998
Proved Plus Probable1 67,613 36,988
<FN>
1. Probable reserves have not been risk adjusted
</TABLE>
submitted
(signed)
DeGOLYER and MacNAUGHTON
20
<PAGE>
APPENDIX II
FINANCIAL INFORMATION ON TRITON EUROPE
The financial information contained in paragraphs A to E of this Appendix II
does not constitute statutory accounts as defined by Section 240 of the
Companies Act 1985. Information contained in paragraphs A to D has been
extracted from the audited statutory accounts of the Triton Europe group ("the
Group") for each of the three financial years ended May 31, 1991, 1992 and 1993
which have been delivered to the Registrar of Companies, and on which
unqualified audit reports as defined under Section 235 of the Companies Act 1985
have been given. Furthermore the reports did not contain any statement under
section 237(2) or (3) of the Companies Act 1985.
A. CONSOLIDATED PROFIT AND LOSS ACCOUNTS
The consolidated profit and loss accounts for the Group for the three years
ended May 31, 1991, 1992 and 1993 were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
NOTE L000 L000 L000
<S> <C> <C> <C> <C>
TURNOVER 2 18,527 21,682 29,728
Cost of sales (21,207) (17,360) (17,040)
------- ------- --------
GROSS (LOSS)/PROFIT (2,680) 4,322 12,688
Exceptional items 3 (41,967) - 34,846*
Administrative expenses (5,606) (5,035) (3,935)
------- ------- --------
OPERATING (LOSS)/PROFIT 4 (50,253) (713) 43,599
Net interest receivable 5 383 677 66
Foreign exchange gains/(losses) 626 (332) 1,297
Other (charges)/income (27) 33 139
------- ------- --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION (49,271) (335) 45,101
Taxation on loss on ordinary activities 8 14,852 4,222 (13,710)
------- ------- --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER
TAXATION (34,419) 3,887 31,391
Dividend - - (5,775)
------- ------- -------
RETAINED (LOSS)/PROFIT FOR THE YEAR (34,419) 3,887 25,616
Retained profit brought forward 41,397 37,510 11,894
------- ------- -------
Retained profit carried forward 6,978 41,397 37,510
------- ------- -------
(LOSS)/EARNINGS PER SHARE 9 (41.72p) 4.71p 38.05p
------- ------- -------
<FN>
Movements on reserves are set out in note 17.
*This item was included in the 1991 accounts after operating profits.
</TABLE>
21
<PAGE>
B. CONSOLIDATED BALANCE SHEET
The consolidated balance sheets for the Group for the three years ended May 31,
1991, 1992 and 1993 were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
NOTE L000 L000 L000
<S> <C> <C> <C> <C>
FIXED ASSETS
Tangible assets 10 37,676 76,649 73,239
------- ------- -------
CURRENT ASSETS
Stocks 122 243 218
Debtors 12 5,576 4,088 7,618
Cash at bank and in hand 6,064 5,343 13,295
------- ------- -------
11,762 9,674 21,131
------- ------- -------
CREDITORS:
Amounts falling due within one year 13 (5,434) (6,729) (16,535)
------- ------- -------
Net current assets 6,328 2,945 4,596
------- ------- -------
Total assets less current liabilities 44,004 79,594 77,835
Creditors:
Amounts falling due after more than one year 14 (1,181) (1,153) (1,192)
Provisions for liabilities and charges 15 (1,633) (13,197) (16,018)
------- ------- -------
NET ASSETS 41,190 65,244 60,625
------- ------- -------
------- ------- -------
CAPITAL AND RESERVES
Called up share capital 16 4,125 4,125 4,125
Share premium account 17 12,211 12,211 12,211
Other reserves 17 5,099 5,099 5,099
Foreign exchange reserve 17 12,777 2,412 1,680
Profit and loss account 17 6,978 41,397 37,510
------- ------- -------
41,190 65,244 60,625
------- ------- -------
------- ------- -------
</TABLE>
22
<PAGE>
C. CONSOLIDATED CASH FLOW STATEMENT
The consolidated cash flow statements for the Group for the three years ended
May 31, 1991, 1992 and 1993 were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
Note L000 L000 L000
<S> <C> <C> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 23 3,452 9,764 15,898
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest received 269 873 1,094
Interest paid (66) (37) (1,028)
Dividends paid - - (5,775)
-------- -------- --------
NET CASH INFLOW/(OUTFLOW) FROM RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE 203 836 (5,709)
-------- -------- --------
TAXATION
UK Corporation Tax and ACT paid (575) (5,788) -
French corporation tax paid (46) - (278)
-------- -------- --------
(621) (5,788) (278)
-------- -------- --------
INVESTING ACTIVITIES
Acquisition of producing properties (459) - -
Development expenditure (396) (5,802) (5,158)
Exploration & appraisal expenditure (1,738) (6,581) (8,041)
Purchases of other fixed assets (368) (212) (131)
Disposal of other fixed assets 7 - 32,937
Incidental costs of disposal - - (1,079)
-------- -------- --------
NET CASH (OUTFLOW)/INFLOW FROM INVESTING
ACTIVITIES (2,954) (12,595) 18,528
-------- -------- --------
NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 80 (7,783) 28,439
-------- -------- --------
REPAYMENT OF BANK LOAN - - (26,246)
-------- -------- --------
INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 23 80 (7,783) 2,193
-------- -------- --------
-------- -------- --------
</TABLE>
The sale of fixed assets in the year ended May 31, 1991 related to the
exceptional item disclosed in note 3 to the accounts.
23
<PAGE>
D. NOTES TO THE FINANCIAL INFORMATION
The following notes have been extracted from the notes to the Group's statutory
accounts:
1. ACCOUNTING POLICIES
(A) BASIS OF PREPARATION
The accounts have been prepared under the historical cost convention and in
accordance with applicable accounting standards and, except for the treatment of
certain French taxation allowances, with the Companies Act 1985 ("the Act"). An
explanation of this departure from the requirements of the Act is given in
section (e) below.
(B) BASIS OF CONSOLIDATION
The consolidated accounts of the Group comprise the accounts of the Company and
its subsidiaries. A separate profit and loss account dealing with the results of
the Company only is not presented, as permitted by Section 230 of the Act.
(C) TURNOVER
Turnover represents the sales value of the Group's share of oil and gas
production and is recognised on an entitlement basis.
(D) OIL AND GAS INTERESTS
The "full cost" method of accounting is used, whereby costs of exploration and
development of oil and gas reserves are capitalised and accumulated in separate
cost pools for each geographical area. Pre-licence, licence acquisition,
exploration and appraisal costs of individual licence interests are held outside
the cost pools and remain undepreciated until the existence or otherwise of
commercial reserves is established within the licence area. From the
commencement of oil and gas production each pool, together with anticipated
future development costs calculated at price levels ruling at the balance sheet
date, is depreciated on a unit of production basis, based on its proved oil and
gas reserves. The resultant depreciation is included in cost of sales.
Capitalised costs are reviewed on a pool by pool basis and compared to the net
revenues to be derived from the estimated remaining proved reserves. Net
revenues are computed using oil prices, exchange rates and cost levels ruling at
the balance sheet date, discounting the resultant net revenues at 10 per cent
per annum. If the amount of capitalised cost relating to a particular pool is
considered to be excessive, such costs are written down accordingly.
(E) PROVISION POUR RECONSTITUTION DES GISEMENTS (PRG)
PRG (French taxation allowance) relating to oil and gas interests has been
deducted from the cost of fixed assets. This is not in accordance with Schedule
4 to the Act, which requires fixed assets to be shown at their purchase price,
thus presenting PRG as deferred income. This departure from the requirements of
the Act is, in the opinion of the directors, necessary for the accounts to give
a true and fair value. The effect is that deferred income and the net book
amount of fixed assets are L4.7 million lower than they would otherwise have
been.
(F) ABANDONMENT PROVISION
Provision for the estimated cost of removing production facilities and other
site restoration work is made on a unit of production basis, based on proved oil
and gas reserves. Estimates of costs are made at price levels ruling at the
balance sheet date. Changes in estimates are accounted for prospectively over
the remaining reserves of the field.
(G) DEPRECIATION
Depreciation of fixed assets, other than oil and gas interests, is provided on a
straight line basis to write off the assets over their estimated useful lives,
as follows:
<TABLE>
<S> <C>
Motor vehicles & office equipment 4 Years
Fixtures & fittings 10 Years
</TABLE>
24
<PAGE>
(H) FOREIGN CURRENCIES
On consolidation, assets and liabilities of foreign subsidiary companies are
translated into sterling at closing rates of exchange. Share capital and
retained earnings are translated at historic rates. Profit and loss accounts are
translated at the average rate of exchange for the year.
Exchange differences resulting from the translation of net investments in
subsidiary companies, together with differences between the profit and loss
accounts translated at average rates and at closing rates, are recorded in
foreign exchange reserves.
Unrealised exchange gains and losses arising on long term foreign currency
borrowings, net of any foreign taxes relating thereto, are also recorded in
foreign exchange reserves.
Realised gains and losses on long term foreign currency borrowings together with
all other gains or losses on settlement or translation at closing rates of
exchange of monetary assets and liabilities are included in the determination of
profit for the year.
(I) DEFERRED TAXATION
Deferred taxation is provided, using the liability method, in respect of timing
differences arising from the different treatment for accounting and taxation
purposes of income and expenditure to the extent that it is expected that the
differences will reverse.
(J) STOCKS
Stocks represent oil production awaiting delivery which is valued at selling
price.
(K) INVESTMENTS IN TRITON EUROPE GROUP COMPANIES
Investments in Triton Europe group companies are carried at the net book value
of the underlying companies. The movement in the net book value of Triton Europe
group companies is transferred to the revaluation reserve.
(L) OPERATING LEASES
Operating lease rentals are charged to the profit and loss account as incurred.
2. TURNOVER AND NET ASSETS
<TABLE>
<CAPTION>
TURNOVER NET ASSETS (AT 31 MAY)
1993 1992 1991 1993 1992 1991
L000 L000 L000 L000 L000 L000
<S> <C> <C> <C> <C> <C> <C>
Turnover and net assets are analysed
by geographical area as follows:
France 18,493 21,654 29,103 32,119 55,674 53,838
North Sea - - 556 - -
United Kingdom onshore - - - 2,413 8,772 4,739
Italy - - - 443 - -
Head office and other 34 28 69 6,215 798 2,048
------- ------- ------- ------- ------- -------
18,527 21,682 29,728 41,190 65,244 60,625
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
</TABLE>
3. EXCEPTIONAL ITEMS
Exceptional (charges)/income were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Profit on sale of oil and gas interests - - 24,163
Foreign exchange gains realised on the repayment
of borrowings - - 10,683
Writedown of oil and gas interests (40,977) - -
Restructuring costs (990) - -
-------- ------ -------
(41,967) - 34,846
-------- ------ -------
-------- ------ -------
</TABLE>
25
<PAGE>
A review was conducted as at 31 May 1993 to ascertain whether the amount of
capitalised costs relating to the Triton Europe group's pools was excessive in
relation to the economic value of its oil and gas properties. A report prepared
by the Company's independent petroleum engineers, DeGolyer and MacNaughton,
resulted in a reduction in estimated proved reserves at 31 May 1993 of 14.6
million barrels, 7.2 million barrels being reclassified as probable reserves. A
ceiling test with respect to the French cost pool was performed by comparing the
capitalised costs to the net revenues to be derived from the estimated remaining
proved reserves. Net revenues were estimated using oil prices, exchange rates
and cost levels ruling at 31 May 1993, and discounted at 10 per cent per annum.
This method is widely used in the oil industry as a means of valuing oil and gas
reserves and reflected the directors' judgement of the value of the properties
in the current economic conditions. It is also consistent with the basis adopted
by Triton Energy in its valuation of these properties. The directors consider
that in the case of the French cost pool a permanent diminution in value has
occurred and additional depreciation of L37.3 million has been provided in these
accounts. In assessing the value of the Triton Europe group's unproved
properties, the directors have taken account of the current economic conditions
and have written down the value of the U.K. oil and gas properties by L3.2
million. Other writedowns of oil and gas interests amounted to L0.5 million.
A deferred tax credit of L12.7 million arising from the writedown of the French
oil and gas properties is included in the deferred tax credit for the year ended
31 May 1993 of L15.0 million. Details of this deferred tax credit are discussed
in note 8.
During the year ended May 1991, the Triton Europe group sold its U.K. North Sea
oil and gas interests to CONOCO (UK) Limited and its Dutch North Sea oil and gas
interests to Clyde Petroleum (Netherlands) B.V. The total proceeds from the
sales amounted to U.S.$64.5 million (L32.9 million) resulting in a pre-tax gain
of L24.2 million.
The proceeds of the sale of the North Sea oil and gas interests made possible
the repayment of $44 million (L26.2 million) of the Triton Europe group's
borrowings. The repayment realised a foreign exchange gain of L10.7 million of
which L3.4 million had arisen as a result of foreign exchange movements during
the prior year. The balance of L7.3 million related to foreign exchange
movements in previous periods which, whilst unrealised, had been recorded in the
Triton Europe group's foreign exchange reserve.
4. OPERATING (LOSS)/PROFIT
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Operating (loss)/profit is analysed
by geographical area as follows:
The North Sea (44,529) 1,321 45,764
France - - (790)
United Kingdom onshore (4,075) (470) -
Other (1,649) (1,564) (1,375)
-------- ------- -------
(50,253) (713) 43,599
-------- ------- -------
-------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
Operating (loss)/profit is stated after
charging/(crediting) the following:
<S> <C> <C> <C>
Abandonment cost 856 179 -
Depreciation 13,095 8,979 8,341
Auditors' remuneration 55 80 65
Operating lease rentals-offices 512 474 -
Exceptional items 41,967 - (34,846)
</TABLE>
The decrease in estimated proved reserves resulted in an increased depreciation
charge of L7.6 million.
26
<PAGE>
5. NET INTEREST RECEIVABLE
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Interest receivable 269 873 1,094
Interest payable on bank loans
and overdrafts wholly payable
within five years (28) (37) (1,028)
Other interest 142 (159) -
------ ------ -------
383 677 66
------ ------ -------
------ ------ -------
</TABLE>
Other interest was in respect of the waiver/(accrual) of penalties for the late
payment of French taxes.
6. EMOLUMENTS OF DIRECTORS
The aggregate remuneration paid to directors was as follows:
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Directors' fees 110 95 60
Emoluments as executives 437 481 366
</TABLE>
The aggregate pension contributions included in the above and paid during the
year was L5,000 (1992: L13,000, 1991: L5,000).
The emoluments of the chairman and highest paid director (excluding pension
contributions) were:
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Chairman (1992: from 31/10/91) 297 76
(1992: to 31/10/91) - - 138 265
</TABLE>
The directors, including the chairman, received emoluments excluding pension
contributions in the following ranges:
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
L0 -L5,000 - - 3
L5,001 -L10,000 - - 5
L10,001 -L15,000 4 6 -
L15,001 -L20,000 3 - -
L80,001 -L85,000 - 1 -
L100,001 -L105,000 - - 1
L125,001 -L130,000 - 1 -
L130,001 -L135,000 1 - -
L230,001 -L235,000 - 1 -
L260,001 -L265,000 - - 1
L295,001 -L300,000 1 - -
</TABLE>
7. STAFF NUMBERS AND COSTS
The average number of persons employed by the Triton Europe group during the
year was:
<TABLE>
<CAPTION>
1993 1992 1991
NUMBER NUMBER NUMBER
<S> <C> <C> <C>
Management (including directors) 21 23 21
Administration 19 19 20
Technical staff 21 22 25
------ ------ ------
61 64 66
------ ------ ------
------ ------ ------
</TABLE>
27
<PAGE>
The geographical analysis of personnel was as follows:
<TABLE>
<CAPTION>
1993 1992 1991
NUMBER NUMBER NUMBER
<S> <C> <C> <C>
France 43 46 48
United Kingdom 9 9 9
Netherlands ------ ------ ------
61 64 66
------ ------ ------
------ ------ ------
</TABLE>
The aggregate payroll costs were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Wages and salaries 2,672 2,324 2,185
Social security costs 836 700 677
Other pension costs 82 56 67
------ ------ ------
3,590 3,080 2,929
------ ------ ------
------ ------ ------
</TABLE>
8. TAXATION
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
CURRENT TAX CHARGE/(CREDIT)
UK corporation tax credit relating to prior year - (1,757) -
ACT relief due to UK/Dutch tax treaty - (277) (1,197)
French prelevement exceptionnel (4) 44 -
French corporation tax relating to a prior year 172 - -
UK Corporation tax at 33.83% - - 8,600
-------- -------- --------
168 (1,990) 7,403
-------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEFERRED TAX CREDIT
UK Corporation tax - - (753)
French Corporation tax at 34% (1992: 34%, 1991: 37%) (15,020) (2,232) 7,850
Credit due to reduction in French Corporation tax rates - - (790)
-------- -------- --------
(15,020) (2,232) (6,307)
-------- -------- --------
Taxation (credit)/charge (14,852) (4,222) 13,710
-------- -------- --------
-------- -------- --------
</TABLE>
Details of the deferred tax provision are set out in note 15.
The UK corporation tax computation for the year ended 31 May 1991 was finalised
during the year ended 31 May 1993. This computation, which included the tax
calculated on the sale of the Triton Europe group s North Sea assets, shows an
amount of tax recoverable of approximately L 700,000. Repayment of this amount
is anticipated in the year ending 31 May 1994, at which time the tax credit will
be recognised.
The deferred tax credit ofL15,020,000 in 1993 related to the Company's French
operations and resulted primarily from the reduction in estimated proved
reserves and the consequent exceptional writedown of the assets and the
additional depreciation.
9. (LOSS)/EARNINGS PER SHARE
The calculation of the loss per share is based on a loss after taxation of
L34,419,000 (1992: profit L3,887,000, 1991: profit L31,391,000) and on the
82,500,000 Ordinary Shares in issue during each year.
28
<PAGE>
10. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
OIL & GAS
INTERESTS OTHER ASSETS TOTAL
L000 L000 L000
<S> <C> <C> <C>
COST
At 1 June 1992 138,459 1,613 140,072
Exchange adjustments 24,043 263 24,306
Additions 2,593 368 2,961
PRG credit (see note 15) (455) - (455)
Disposals (599) (40) (639)
-------- -------- --------
At 31 May 1993 164,041 2,204 166,245
-------- -------- --------
-------- -------- --------
DEPRECIATION
At 1 June 1992 62,292 1,131 63,423
Exchange adjustments 11,472 208 11,680
Charge for the year 12,730 365 13,095
Writedown (see note 3) 40,977 - 40,977
Disposals (599) (7) (606)
-------- -------- --------
At 31 May 1993 126,872 1,697 128,569
-------- -------- --------
-------- -------- --------
NET BOOK AMOUNT
At 31 May 1993 37,169 507 37,676
-------- -------- --------
-------- -------- --------
At 31 May 1992 76,167 482 76,649
-------- -------- --------
-------- -------- --------
</TABLE>
Net book amount of the Triton Europe group's oil and gas interests comprised
the following geographical cost pools:
<TABLE>
<CAPTION>
1993 1992
L000 L000
<S> <C> <C>
France 36,608 73,020
United Kingdom onshore - 3,076
Italy 443 -
Other 118 71
-------- --------
37,169 76,167
-------- --------
-------- --------
</TABLE>
Other fixed assets comprised office equipment, furniture and fixtures, and
motor vehicles.
11. INVESTMENTS (SHARES IN SUBSIDIARY UNDERTAKINGS)
<TABLE>
<CAPTION>
COMPANY 1993 1993 1992
MOVEMENTS
L000 L000 L000
<S> <C> <C> <C>
Shares in subsidiary undertakings at cost 14,578 1,397 13,181
Revaluation (see note 17) 20,456 (24,222) 44,678
-------- -------- --------
Investment in subsidiary undertakings 35,034 (22,825) 57,859
-------- -------- --------
-------- -------- --------
</TABLE>
The increase in shares in subsidiary undertakings at cost represented
additional investments in Triton Mediterranean Oil & Gas N.V.
29
<PAGE>
The names of the principal subsidiaries, all being engaged in exploration and
production activities, and the Company's interests therein are as follows:
<TABLE>
<CAPTION>
COUNTRY OF COUNTRY OF
PERCENTAGE HELD AT INCORPORATION OR PRINCIPAL
31 MAY 1993 REGISTRATION OPERATIONS
<S> <C> <C> <C>
Triton Resources (U.K.) Limited
100,000 ordinary "A" shares of L1 each
1,121,948 ordinary "B" shares of L1 each 100% England United Kingdom
Triton France SA
226,000 ordinary shares of 100 Francs each 100% France France
Triton Mediterranean Oil & Gas N.V.
5,474 shares of Dfl. 1,000 each 100% Netherlands Italy
</TABLE>
12. DEBTORS
<TABLE>
<CAPTION>
1993 1992
L000 L000
<S> <C> <C>
Trade debtors 1,443 1,868
Advance corporation tax recoverable 852 852
Taxation recoverable 1,522 142
Other debtors 1,560 1,000
Prepayments and accrued income 199 226
------- -------
5,576 4,088
------- -------
------- -------
</TABLE>
Included within taxation recoverable at 31 May 1993 is an amount of
L 1,380,000 in respect of French taxation recoverable, which will be
received after more than one year.
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
1993 1992
L000 L000
<S> <C> <C>
Trade creditors 1,540 2,756
Amounts owed to Triton Energy Corporation 27 73
Accruals and deferred income 1,851 1,584
Other creditors including taxation and social security:
Royalties 1,770 1,542
Advance corporation tax - 575
French corporation tax 168 -
Pre'levement exceptionnel - 44
Taxation and social security 78 155
------- -------
5,434 6,729
------- -------
------- -------
</TABLE>
14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
1993 1992
L000 L000
<S> <C> <C>
Bank loan 641 546
Royalties 540 607
------- -------
1,181 1,153
------- -------
------- -------
</TABLE>
The Triton Europe group bank loan comprises U.S.$1,000,000 (1992:
U.S.$1,000,000) drawn under a nominal U.S.$130 million revolving credit
facility, subject to a borrowing base calculation based on the value of the
Triton Europe group s proved reserves. This facility and a U.S.$50 million
conditional acquisitions facility have an initial maturity date of 31 May 1999
and are unsecured.
Commencing in November 1994, the nominal amount of the facility is reduced by
equal semi-annual installments until May 1999. Interest accrues at LIBOR plus
5/8 % to 3/4%.
30
<PAGE>
15. PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
DEFERRED
TAXATION ABANDONMENT TOTAL
L000 L000 L000
<S> <C> <C> <C>
At 1 June 1992 12,568 629 13,197
Exchange adjustment 1,527 148 1,675
(Credit)/charge for the year (15,020) 856 (14,164)
PRG credit to oil and gas interests (455) - (455)
Tax recoverable transferred to debtors (note 12) 1,380 - 1,380
------- ------- -------
At 31 May 1993 0 1,633 1,633
------- ------- -------
------- ------- -------
</TABLE>
Details of the movements in the deferred tax credit are set out in note 8.
At 31 May 1993, full provision for deferred taxation has been made in respect
of:
<TABLE>
<CAPTION>
1993 1992
L000 L000
<S> <C> <C>
FRENCH TAXATION
PRG 204 658
Accelerated capital allowances 3,070 14,080
Other (including tax losses available) (3,274) (2,170)
------- -------
0 12,568
------- -------
------- -------
</TABLE>
PRG allows French companies to deduct from their taxable income an amount equal
to 23.5% of their sales, up to a limit of 50% of their net profit as defined in
the PRG regulations. To the extent that an amount equivalent to that claimed is
spent on exploration in the following year in accordance with the regulations,
80% of such amount is acquired as a permanent relief against taxation. The
balance of PRG is recaptured as an additional charge in the tax computations of
succeeding years.
As the permanent benefit of PRG relief for any year is dependent upon the levels
of exploration in the subsequent year, the Company initially makes full
provision for the potential reversal of the whole of the taxation benefit taken.
When the permanent PRG relief is demonstrable, the value of such benefit is
deducted from the deferred tax provision in the balance sheet and the credit is
taken against the cost of oil and gas properties. During 1993 this credit
amounted to L455,000 (1992: L964,000). The relevant cost pool is reduced as is,
in consequence, the annual depreciation charge.
16. CALLED UP SHARE CAPITAL
Ordinary Shares of 5p each at 31 May 1991, 1992 and 1993
<TABLE>
<CAPTION>
NUMBER L000
<S> <C> <C>
Authorised 125 million 6,250
Issued 82.5 million 4,125
No share options in the Company had been granted at the date of this report.
</TABLE>
17. RESERVES
The movements on reserves during the year ended 31 May 1993 were as follows:
<TABLE>
<CAPTION>
31 MAY MOVEMENT 1 JUNE
1993 FOR THE YEAR 1992
L000 L000 L000
<S> <C> <C>
Share premium account 12,211 - 12,211
Other non-distributable reserves 5,099 - 5,099
Foreign exchange reserve 12,777 10,365 2,412
Profit and loss account 6,978 (34,419) 41,397
------- ------- -------
37,065 (24,054) 61,119
------- ------- -------
------- ------- -------
</TABLE>
31
<PAGE>
Significant exchange adjustments have occurred in fixed assets, deferred tax
provision and in net assets, due mainly to the depreciation of sterling against
the French franc.
The profit on ordinary activities after taxation attributable to the Company was
L168,000 (1992: L256,000).
18. CAPITAL EXPENDITURE AND OTHER COMMITMENTS
Commitments for future capital expenditure of the Triton Europe group at 31 May
were as follows:
<TABLE>
<CAPTION>
1993 1992
LM LM
<S> <C> <C>
Contracted for but not accrued in the accounts 1.1 5.8
Authorised but not contracted for - 3.3
----- -----
1.1 9.1
----- -----
----- -----
</TABLE>
19. OPERATING LEASE COMMITMENTS
<TABLE>
<CAPTION>
Triton Europe group annual rentals are as follows:
1993 1992
L000 L000
<S> <C> <C>
Expiring within one year 105 41
Expiring between one and five years 247 421
----- -----
352 462
----- -----
----- -----
</TABLE>
20. CONTINGENT LIABILITIES
As at 31 May 1993, various companies in the Triton Europe group had contingent
liabilities under obligations entered into in the ordinary course of business as
licensees or co-licensees under joint operating and petroleum sales agreements.
21. ULTIMATE PARENT UNDERTAKING
The ultimate parent undertaking is Triton Energy Corporation, incorporated in
the State of Texas, United States of America. Under a technical services
agreement dated 1 June 1988 with Triton Energy Corporation, technical services
provided to the Triton Europe group during the year gave rise to the following
charges:
<TABLE>
<CAPTION>
1993 1992
L000 L000
<S> <C> <C>
Facility charge (U.S.$36,000 per month) 261 247
Reimbursement of third party charges 220 145
Engineering support 61 61
Corporate services 100 250
Exploration support 39 58
Reimbursement for expatriate personnel seconded to the Triton Europe
group 189 322
Interest - 1
Other 9 6
----- -----
879 1,090
----- -----
----- -----
</TABLE>
22. PENSIONS
Personal pension plans have been arranged for the Triton Europe group's UK
employees which operate as defined contributions schemes. The employer's
contribution is fixed as a percentage of the salary of the employees and
amounted to L76,000 in the year ended 31 May 1993 (1992: L47,000). In addition
$8,000 (1992: $16,000) was paid to Triton Energy Corporation in respect of the
pension arrangements of certain expatriate personnel.
32
<PAGE>
23. CASH FLOW STATEMENT
(j) Reconciliation of operating loss to net inflow from operating activities:
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Operating (loss)/profit before exceptional items (50,253) (713) 8,753
Writedowns 40,977 -
Depreciation and abandonment 13,951 9,158 8,341
Decrease/(increase) in stocks 158 (25) (57)
Decrease/(increase) in debtors 369 839 (426)
(Decrease)/increase in creditors: amount falling due
within one year (1,554) 505 (713)
Decrease in creditors: amounts falling due after more
than one year (223) - -
Loss on sale of other fixed assets 27 - -
-------- ------- -------
Net cash inflow from operating activities 3,452 9,764 15,898
-------- ------- -------
-------- ------- -------
</TABLE>
(ii) Analysis of changes in cash and cash equivalents during the year:
<TABLE>
<CAPTION>
1993 1992 1991
L000 L000 L000
<S> <C> <C> <C>
Balance at 1 June 5,343 13,295 518
Net cash inflow/(outflow) before adjustments for the effects
of foreign exchange differences 80 (7,783) 2,193
Effect of foreign exchange rate differences 641 (169) 10,584
-------- ------- -------
Balance at 31 May 6,064 5,343 13,295
-------- ------- -------
-------- ------- -------
</TABLE>
(iii) Analysis of changes in financing during the year:
<TABLE>
<CAPTION>
1993 1992
L000 L000
<S> <C> <C>
Balance at 1 June 546 582
Effect of foreign exchange rate differences 95 (36)
-------- -------
Balance at 31 May 641 546
-------- -------
-------- -------
</TABLE>
E. UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED NOVEMBER 30, 1993
Set out below is the text of the unaudited interim report for the six months
ended November 30, 1993, released to the London Stock Exchange on January 25,
1993:
CHAIRMAN'S STATEMENT
"Trading in the six months ended November 30, 1993 continued to be
disappointing. The Group made an operating loss of L3.0 million, compared with a
loss of L1.1 million in the previous comparable period, despite the measures
announced to reduce administrative expenses. Although these measures have been
largely implemented, the full benefit was not experienced in the period. After
foreign exchange gains and interest income, the Group made a loss before
taxation ofL2.8 million (1992 -L18,000 profit). The loss per share amounted to
2.5p (1992-earnings per share 0.07p).
At November 30, 1993 cash and short term investments amounted to L7.14 million,
equivalent to 8.7p per share. This included the proceeds of the sale of the
Melun and Bagneaux fields for L0.7 million. Borrowings at the same date were
nil.
The weak trading performance was largely due to a combination of lower Brent oil
prices and a decline in French production. Average production in the period fell
from 3,200 barrels of oil per day, with Villeperdue accounting for over 90 per
cent of total production.
33
<PAGE>
In October 1993 TOTAL sold its subsidiary company Totalex, the operator of
Villeperdue, to Coparex, an independent French oil company. The Group has
commenced preliminary discussions with Coparex with a view to seeing how the
value of the field may be enhanced.
The Group has continued to seek new exploration opportunities in Southern and
Eastern Europe and North Africa. As a result, the Group has now received the
provisional consent of the Italian authorities to the acquisition from
Enterprise Oil of a 40 per cent interest in licence areas DR. 71 ET and DR.72
ET, located in the Italian sector of the Adriatic Sea adjacent to the recent
Aquila oil discovery. The interests will be earned by partly carrying Enterprise
through an initial seismic programme of approximately 1500 kms of new data.
On January 17, 1993 Triton Energy Corporation announced its intention to make an
offer for the minority interests in the Company. For the purposes of this offer,
a report on the Company's producing assets at November 30, 1993 was commissioned
by the Independent Directors. The report assumes an initial oil price achieved
of $15.02 and values the proven reserves and the proven plus probable reserves
at L19.3 million and L24.7 million respectively."
<TABLE>
<CAPTION>
CONSOLIDATED PROFIT AND LOSS ACCOUNT
SIX MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, MAY 31,
1993 1992 1993
L000 L000 L000
<S> <C> <C> <C>
Turnover 6,937 9,369 18,527
Cost of Sales (7,468) (7,967) (21,207)
-------- -------- -------
Gross profit (531) 1,402 (2,680)
Exceptional items - - (41,967)
Administrative Expenses (2,506) (2,542) (5,606)
-------- -------- -------
Operating (loss)/profit (3,037) (1,140) (50,253)
Interest receivable 166 138 383
Interest payable (34) (13)
Foreign exchange gains/(losses) 108 868 626
Other income 37 165 (27)
-------- -------- -------
Profit/(loss) on ordinary activities before taxation (2,760) 18 (49,271)
Taxation 735 43 14,852
-------- -------- -------
Profit on ordinary activities after taxation (2,025) 61 (34,419)
Dividend - - -
-------- -------- -------
Retained/(loss) profit for the year (2,025) 61 (34,419)
-------- -------- -------
Earnings per share (2.45p) 0.07p (41.72p)
</TABLE>
34
<PAGE>
APPENDIX III
ADDITIONAL INFORMATION ON TRITON ENERGY CONVERTIBLE PREFERRED STOCK AND TRITON
ENERGY COMMON STOCK
1. TRITON ENERGY CONVERTIBLE PREFERRED STOCK
GENERAL
The following description of certain provisions of the Convertible Preferred
Stock is intended as a summary only, and is qualified in its entirety by
reference to the complete text of the Restated Articles of Incorporation of
Triton Energy (the "Articles") and the form of Statement of Resolutions
Establishing and Designating the Convertible Preferred Stock (the
"Designation"). The Articles and the form of the Designation are available as
set forth in Appendix IV under "Additional Information -Documents available for
inspection".
Under the Articles, Triton Energy has authority to issue 5,000,000 shares of
preferred stock. Triton Energy has authorized the issuance of the necessary
number of shares of preferred stock as the Convertible Preferred Stock. No
shares of preferred stock of Triton Energy are currently outstanding. In June
1990, the Board of Directors of Triton Energy (the "Board"), adopted a
Shareholder Rights Plan under which preferred stock rights were issued to
holders of its Common Stock at the rate of one right for each share of Triton
Energy Common Stock. Generally, the rights become exercisable only upon the
occurrence of certain acquisitions or offers for Triton Energy Common Stock. Any
shares of preferred stock issued pursuant to the Shareholders Rights Plan will
rank junior as to dividends and liquidation to the Convertible Preferred Stock.
The shares of Convertible Preferred Stock, when issued, will be duly and validly
issued, fully paid, and nonassessable. The holders of the shares of the
Convertible Preferred Stock will have no preemptive rights with respect to any
shares of capital stock of Triton Energy or any other securities of Triton
Energy convertible into or carrying rights or options to purchase any such
shares.
The transfer agent, conversion agent, and registrar for the Convertible
Preferred Stock and the transfer agent and registrar for the Triton Energy
Common Stock issuable upon conversion thereof will be Chemical Bank (New York)
(the "Transfer Agent").
DIVIDENDS
Holders of shares of the Convertible Preferred Stock will be entitled to
receive, when, as, and if declared by the Board out of funds of Triton Energy
legally available for payment, cumulative cash dividends at the annual rate per
share equal to 5 per cent of the Redemption Price of the shares payable
semi-annually on September 30 and March 30 in each year, beginning September 30,
1994, except that if any such date is a Saturday, Sunday, or legal holiday, then
such dividend shall be payable on the next day that is not a Saturday, Sunday,
or legal holiday. Dividends will accrue from the date on which the Convertible
Preferred Stock is issued and will be payable to holders of record as they
appear on the stock books of Triton Energy on such record dates as are fixed by
the Board. The amount of dividends payable per share of Convertible Preferred
Stock for each semi-annual dividend period will be computed by dividing the
annual dividend amount by two. The amount of dividends payable for the initial
dividend period and for any period other than a full semi-annual dividend period
will be computed on the basis of a 360-day year of twelve 30-day months. No
interest will be payable in respect of any dividend payment on the Convertible
Preferred Stock which may be in arrears.
If dividends on the Convertible Preferred Stock shall not have been declared and
paid in full, or funds set aside for payment, by a date 15 days after a dividend
payment date (a "Calculation Date"), dividends payable on the Convertible
Preferred Stock shall be increased by an amount equal to the prime rate of
Morgan Guaranty Trust Company of New York plus 1 per cent as in effect on each
Calculation Date applied against the amount of dividends so due and unpaid until
such dividends shall be paid (the "Penalty Dividend").
The Convertible Preferred Stock will have priority as to dividends over Triton
Energy Common Stock and any other series or class of Triton Energy's stock
hereafter issued which ranks junior as to dividends to the Convertible Preferred
Stock (junior dividend stock), and no dividend (other than dividends payable
solely in junior dividend stock) may be paid on, and no purchase, redemption, or
other acquisition may be made by Triton Energy of, any junior dividend stock
unless all accrued and unpaid
35
<PAGE>
dividends on the Convertible Preferred Stock have been paid or declared and set
apart for payment. Triton Energy may not pay dividends on any class or series of
its stock having parity with the Convertible Preferred Stock as to dividends
(parity dividend stock), unless it has paid or declared and set apart for
payment or contemporaneously pays or declares and sets apart for payment all
accrued and unpaid dividends for all prior periods on the Convertible Preferred
Stock and may not pay dividends on the Convertible Preferred Stock unless it has
paid or declared and set apart for payment or contemporaneously pays or declares
and sets apart for payment all accrued and unpaid dividends for all prior
periods on the parity dividend stock. Whenever all accrued dividends are not
paid in full on the Convertible Preferred Stock or any parity dividend stock,
all dividends declared on the Convertible Preferred Stock and such parity
dividend stock will be declared or made pro rata so that the amount of dividends
declared per share on the Convertible Preferred Stock and such parity dividend
stock will bear the same ratio that accrued and unpaid dividends per share on
the Convertible Preferred Stock and such parity dividend stock bear to each
other. The Convertible Preferred Stock will be junior as to dividends to any
series or class of Triton Energy's stock hereafter issued which ranks senior as
to dividends to the Convertible Preferred Stock (senior dividend stock), and if
at any time Triton Energy has failed to pay or declare and set apart for payment
accrued and unpaid dividends on any senior dividend stock, Triton Energy may not
pay any dividend on the Convertible Preferred Stock.
Under Texas law, Triton Energy may declare and pay dividends on its shares of
capital stock out of its surplus (which totalled approximately $240 million as
of November 30, 1993). The payment of cash dividends is restricted by covenants
in loan documents and indentures to which Triton Energy is a party. In the
opinion of Triton Energy, the most restrictive covenant would not impede the
ability of Triton Energy at the present time to pay dividends on the Convertible
Preferred Stock.
LIQUIDATION RIGHTS
In case of the voluntary or involuntary liquidation, dissolution, or winding up
of Triton Energy, holders of shares of Convertible Preferred Stock are entitled
to receive an amount per share equal to the Redemption Price, plus any accrued
and unpaid dividends (including Penalty Dividends) to the payment date (the
"Liquidation Price"), before any payment or distribution is made to the holders
of Triton Energy Common Stock or any other series or class of Triton Energy's
stock hereafter issued which ranks junior as to liquidation rights to the
Convertible Preferred Stock, but the holders of the shares of the Convertible
Preferred Stock will not be entitled to receive the Liquidation Price of such
shares until the liquidation price of any other series or class of Triton
Energy's stock hereafter issued which ranks senior as to liquidation rights to
the Convertible Preferred Stock (senior liquidation stock) has been paid in
full. The holders of Convertible Preferred Stock and all series or classes of
Triton Energy's stock hereafter issued which rank on a parity as to liquidation
rights with the Convertible Preferred Stock are entitled to share rateably, in
accordance with the respective preferential amounts payable on such stock, in
any distribution (after payment of the liquidation price of the senior
liquidation stock) which is not sufficient to pay in full the aggregate of the
amounts payable thereon. After payment in full of the Liquidation Price of the
shares of the Convertible Preferred Stock, the holders of such shares will not
be entitled to any further participation in any distribution of assets by Triton
Energy. Neither a consolidation or merger of Triton Energy with another
corporation nor a sale or transfer of all or part of Triton Energy's assets for
cash, securities, or other property will be considered a liquidation,
dissolution, or winding up of Triton Energy.
REDEMPTION
Triton Energy may, at its option, redeem the Convertible Preferred Stock, in
whole or in part, at any time on or after March 30, 1998 or such earlier date
after which at least 75 per cent of the shares of Convertible Preferred Stock
initially issued shall have been converted into shares of Triton Energy Common
Stock. The redemption price payable upon such optional redemption shall be the
Redemption Price plus all accrued and unpaid dividends including Penalty
Dividends to the redemption date. Such redemption price shall be payable in
cash.
Notice of an optional redemption of the Convertible Preferred Stock by Triton
Energy will be mailed at least 30 days but not more than 60 days before the
redemption date to each holder of record of shares of Convertible Preferred
Stock to be redeemed at the address shown on the books of Triton Energy. Shares
of Convertible Preferred Stock redeemed by Triton Energy will be restored to the
status of authorised but unissued shares of preferred stock, without designation
as to class, and may thereafter be issued, but not as shares of Convertible
Preferred Stock.
36
<PAGE>
If less than all of the outstanding shares of Convertible Preferred Stock are to
be redeemed, Triton Energy will select those to be redeemed pro rata or by lot
or in such other manner as the Board may determine.
The Convertible Preferred Stock shall be subject to mandatory redemption by
Triton Energy on March 30, 2004. At the option of Triton Energy, such redemption
may be for (i) cash at the Redemption Price plus accrued and unpaid dividends
(including Penalty Dividends) on the redemption date; (ii) such number of shares
of Common Stock whose aggregate value (based on the then current market price
determined as set forth in the Designation) does not exceed the Redemption Price
plus any accrued and unpaid dividends (including Penalty Dividends); or (iii) a
combination of cash and shares of Triton Energy Common Stock equal to the
Redemption Price plus any accrued and unpaid dividends (including Penalty
Dividends).
Provided that Triton Energy has made available at the office of the Transfer
Agent a sufficient amount of cash or shares of Triton Energy Common Stock, as
the case may be, to effect the redemption, on and after the redemption date,
dividends will cease to accrue on the Convertible Preferred Stock called for
redemption, such shares shall no longer be deemed to be outstanding, and all
rights of the holders of such shares of Convertible Preferred Stock will cease,
other than the right to receive any cash payable upon such redemption, without
interest.
VOTING RIGHTS
The holders of Convertible Preferred Stock will have no voting rights except as
described below or as required by Texas law. In exercising any such vote, each
outstanding share of Convertible Preferred Stock will be entitled to one vote.
So long as any shares of Convertible Preferred Stock are outstanding, Triton
Energy will not, without the affirmative vote or consent of the holders of at
least two-thirds of the outstanding shares of Convertible Preferred Stock,
voting or consenting separately as a class with holders of any other class of
Triton Energy's preferred stock similarly affected, issue other than wholly for
cash consideration, any shares of any class of senior dividend stock or senior
liquidation stock, or amend the Articles in a manner adversely affecting the
rights of such stockholders.
The Articles may be amended to increase the number of authorised shares of
Triton Energy's preferred stock without the vote of the holders of the
outstanding Convertible Preferred Stock.
CONVERSION RIGHTS
Commencing on October 1, 1994, the holders of Convertible Preferred Stock will
be entitled to convert their shares of Convertible Preferred Stock into Triton
Energy Common Stock subject to the qualifications described below, except that,
with respect to shares of Convertible Preferred Stock called for redemption,
conversion rights will expire at the close of business on the fifth day prior to
the redemption date (unless Triton Energy defaults in the payment of the
redemption price.). No payment or adjustment will be made in respect of
dividends on Triton Energy Common Stock or Convertible Preferred Stock that may
be accrued or unpaid or in arrears upon conversion of shares of Convertible
Preferred Stock except as set forth below. No fractional shares will be issued
and, in lieu of any fractional share, Triton Energy will pay a cash adjustment
based on the then current market price (determined as set forth in the
Designation) of the Triton Energy Common Stock.
Shares of the Convertible Preferred Stock are convertible upon surrender to
Triton Energy at the office of the Transfer Agent, or such other place as the
Board may determine, of duly endorsed certificates representing the shares of
the Convertible Preferred Stock to be converted, together with appropriate
evidence of the payment of any transfer or similar taxes and instructions in
writing to Triton Energy to convert such shares and specifying the name and
address of the person or entity to whom such shares are to be issued. Triton
Energy shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Triton Energy Common Stock upon such conversion; provided
however, that the holder shall pay any such tax which is due because such shares
are to be issued in a name other than that of such holder.
Each share of Convertible Preferred Stock shall be convertible initially into
one share of Triton Energy Common Stock; however, the number of shares of Triton
Energy Common Stock issuable on conversion of each share of Convertible
Preferred Stock (the "Conversion Rate") shall be subject to adjustment as
described below.
37
<PAGE>
The Conversion Rate is subject to adjustment in certain circumstances, including
in respect of any dividends not declared and paid in full in respect of any
dividend payment date occurring prior to the date of conversion and any Penalty
Dividends payable thereon, upon the issuance of shares of Common Stock as a
stock dividend, in connection with combinations and subdivisions of the Triton
Energy Common Stock, upon certain reclassifications of the Triton Energy Common
Stock, upon the issuance to Triton Energy's stockholders of rights or warrants
to subscribe for or purchase shares of Triton Energy Common Stock at a price per
share less than the then current market price of the Triton Energy Common Stock
(as determined in the Designation), and in connection with certain distributions
to Triton Energy's stockholders of evidences of indebtedness or assets. Except
in the case of the adjustment in respect of dividends, no adjustment in the
Conversion Price will be required unless it would result in at least a I per
cent increase or decrease in the Conversion Price; however, any adjustment not
made will be carried forward.
In case of any consolidation or merger of Triton Energy with any other
corporation, or in the case of any merger of another corporation into Triton
Energy (other than a merger with a corporation in which merger Triton Energy is
the continuing corporation and which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Triton Common
Stock), or in the case of a sale or conveyance of all or substantially all of
the assets of Triton Energy to another corporation, Triton Energy will be
required to make proper provisions so that the holder of each share of
Convertible Preferred Stock then outstanding will have the right thereafter to
convert such share of Convertible Preferred Stock into the kind or amount of
shares of stock and other securities and property receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of shares of
Triton Energy Common Stock into which such share of Convertible Preferred Stock
might have been converted immediately prior to such consolidation, merger, sale
or conveyance.
FORM AND PAYMENTS
The certificates representing shares of Convertible Preferred Stock will be
issued in fully registered definitive form, without coupons.
The Redemption Price of the Convertible Preferred Stock will be payable on
redemption upon presentation and surrender of the certificate representing such
shares duly endorsed at the office of the Transfer Agent or such other place of
redemption determined by the Board and specified in the notice of redemption.
Payments in respect of the Redemption Price of the Convertible Preferred Stock
will be made in U.S. dollars. Dividends on the Convertible Preferred Stock will
be payable in U.S. dollars on each dividend payment date by cheque mailed to the
persons in whose names shares of the Convertible Preferred Stock are registered
on the record date preceding such dividend payment date.
2. TRITON ENERGY COMMON STOCK ("COMMON STOCK")
AUTHORISED CAPITAL AND PAR VALUE
The directors of Triton Energy are authorised to issue up to 200,000,000 shares
of Common Stock, which has a par value of $1.00 per share.
VOTING AND OTHER RIGHTS
Each holder of Common Stock is entitled to one vote for each share of Common
Stock held. Because holders are not entitled to cumulate their votes,
shareholders holding a majority of the outstanding shares of Common Stock and
any shares of voting preferred stock which may be issued are able to elect all
members of the board of directors of Triton Energy. The Bylaws of Triton Energy
provide that the directors are to be elected in three classes of as nearly equal
a number as possible and for a term of three years. Holders of Common Stock have
no preemptive rights, and shares of Common Stock have no redemption, sinking
fund or conversion privileges.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution or winding up of the affairs of
Triton Energy, subject to the rights of the holders of any preferred stock
issued, the holders of Common Stock are entitled to receive pro rata any assets
of Triton Energy after the satisfaction of corporate liabilities.
38
<PAGE>
DIVIDEND RIGHTS
Subject to the rights of holders of any preferred stock, all shares of Common
Stock are entitled to share equally in dividends from sources legally available
for payment of dividends, as and if declared by the board of directors.
Under Texas law, Triton Energy may declare and pay dividends on its shares of
capital stock out of, inter alia, its surplus. Payment of dividends by Triton
Energy on capital stock is restricted by covenants in indentures to which Triton
Energy is a party. Triton Energy does not anticipate paying dividends on Common
Stock in the foreseeable future.
39
<PAGE>
APPENDIX IV
ADDITIONAL INFORMATION
1. RESPONSIBILITY
The directors of Triton Energy, whose names are set out in paragraph 2 below,
accept responsibility for the information contained or referred to in this
document relating to the Triton Energy group, themselves and their immediate
families and related trusts, except for the views of the Independent Directors
and the paragraph headed "Recommendation" in the letter from the Independent
Directors, for which the Independent Directors alone accept responsibility. To
the best of the knowledge and belief of such directors (who have taken all
reasonable care to ensure that such is the case), the information contained or
referred to in this document for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
The directors of Triton Europe, whose names are set out in paragraph 3 below,
accept responsibility for the information contained or referred to in this
document relating to the Triton Europe group, themselves and their immediate
families and related trusts, save that only the Independent Directors accept
responsibility for the views of the Independent Directors and the paragraph
headed "Recommendation" in the letter from the Independent Directors. To the
best of the knowledge and belief of the directors of Triton Europe (who have
taken all reasonable care to ensure that such is the case), the information
contained or referred to for which they respectively accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
2. DIRECTORS OF TRITON ENERGY
The directors of Triton Energy are:
William I. Lee
Herbert L. Brewer
Ernest E. Cook
Ray H. Eubank
Thomas G. Finck
Jesse E. Hendricks
Fitzgerald Hudson
John P. Lewis
Michael E. McMahon
Graeme O. Morris
Wellslake D. Morse, Jr
J.G.A. Tucker
J. Otis Winters
3. DIRECTORS OF TRITON EUROPE
The directors of Triton Europe are:
T. G. Finck
W.I. Lee
M.A. R. Herzog
R.B. Holland III
J. J. Holtzscherer (non-executive)
D.P. Metcalfe (non-executive)
W.R. Smith (non-executive)
4. MARKET QUOTATIONS
The following table sets out the mid-market quotations for Ordinary Shares
(derived from the London Stock Exchange Daily Official List) and the closing
price for Triton Energy Common Stock (as reported on Datastream) in each case on
the first day of each month that both the London Stock Exchange and
40
<PAGE>
the NYSE were open for business since August 3, 1993, on January 14, 1994 (being
the business day prior to the announcement of the offer) and on February 3, 1994
(being the latest practicable date prior to the printing of this document):
<TABLE>
<CAPTION>
DATE TRITON EUROPE TRITON ENERGY
ORDINARY SHARES COMMON STOCK
(P) ($)
<S> <C> <C>
August 3, 1993 26p $30.88
September 1, 1993 26p $32.38
October 1, 1993 22p $31.63
November 1, 1993 17p $33.75
December 1, 1993 16p $30.38
January 3, 1994 21p $30.75
January 14, 1994 20p $30.25
February 3, 1994 33p $31.50
</TABLE>
5. HOLDINGS OF THE DIRECTORS OF THE TRITON ENERGY GROUP IN TRITON ENERGY
(a) The shareholdings in Triton Energy in which directors of Triton Energy are
interested as at February 3, 1994 (being the latest practicable date prior to
the printing of this document) are set out below:
<TABLE>
<CAPTION>
TRITON ENERGY
COMMON
NAME STOCK
<S> <C>
Herbert L. Brewer 36,523
Ernest E. Cook 7,699
Ray H. Eubank 19,151
Thomas G. Finck 4,000
Jesse E. Hendricks 8,935
Fitzgerald S. Hudson 70,000
William I. Lee 340,758
John P. Lewis 1,090
Graeme O. Morris 103
Wellslake D. Morse 683
J. G. A. Tucker 118
J. Otis Winters 2,000
Michael E. McMahon 0
</TABLE>
(b) The directors of Triton Energy also hold certain options granted under
certain stock option plans to subscribe for Triton Energy Common Stock as at
February 3, 1994, as set out below:
<TABLE>
<CAPTION>
NAME TOTAL NUMBER DATE OF GRANT EXERCISE
OF DIRECTOR STOCK OPTIONS OF SHARES OR ACQUISITION PRICE EXERCISE PERIOD
<S> <C> <C> <C> <C> <C>
Herbert L. Brewer 30,000 5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
Ernest E. Cook 45,000 10,000 19/09/91 $42.000 Current-19/09/2001
5,000 19/09/91 $42.000 19/09/94-19/09/2001
5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.500 15/11/94-15/11/2003
5,000 15/11/93 $32.500 15/11/95-15/11/2003
5,000 15/11/93 $32.500 15/11/96-15/11/2003
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
NAME TOTAL NUMBER DATE OF GRANT EXERCISE
OF DIRECTOR STOCK OPTIONS OF SHARES OR ACQUISITION PRICE EXERCISE PERIOD
<S> <C> <C> <C> <C> <C>
Ray H. Eubank 45,000 10,000 19/09/91 $42.000 Current-19/09/2001
5,000 19/09/91 $42.000 19/09/94-19/09/2001
5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
Thomas G. Finck 400,000 62,500 13/08/92 $34.125 Current-13/08/2002
62,500 13/08/92 $34.125 13/08/94-13/08/2002
62,500 13/08/92 $34.125 13/08/95-13/08/2002
62,500 13/08/92 $34.125 13/08/96-13/08/2002
37,500 21/10/93 $32.250 21/10/94-21/10/2003
37,500 21/10/93 $32.250 21/10/95-21/10/2003
37,500 21/10/93 $32.250 21/10/96-21/10/2003
37,500 21/10/93 $32.250 21/10/97-21/10/2003
Jesse E. Hendricks 45,000 10,000 19/09/91 $42.000 Current-19/09/2001
5,000 19/09/91 $42.000 19/09/94-19/09/2001
5,000 16/11/92 $39.625 Current-19/09/2001
5,000 16/11/92 $39.625 16/11/94-19/09/2001
5,000 16/11/92 $39.625 16/11/95-19/09/2001
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/76-15/11/2003
Fitzgerald Hudson 30,000 5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
William I. Lee 15,000 5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
John P. Lewis 45,000 10,000 19/09/91 $42.000 Current-19/09/2001
5,000 19/09/91 $42.000 19/09/94-19/09/2001
5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
Michael E. McMahon 15,000 5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
Graeme Morris 45,000 10,000 19/09/91 $42.000 Current-19/09/2001
5,000 19/09/91 $42.000 19/09/94-19/09/2001
5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.256 15/11/94-15/11/2003
5,000 15/11/93 $32.256 15/11/95-15/11/2003
5,000 15/11/93 $32.256 15/11/96-15/11/2003
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
NAME TOTAL NUMBER DATE OF GRANT EXERCISE
OF DIRECTOR STOCK OPTIONS OF SHARES OR ACQUISITION PRICE EXERCISE PERIOD
<S> <C> <C> <C> <C> <C>
Wellslake D. Morse 45,000 10,000 19/09/91 $42.000 Current-19/09/2001
5,000 19/09/91 $42.000 19/09/94-19/09/2001
5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
J.G.A. Tucker 45,000 10,000 19/09/91 $42.000 Current-19/09/2001
5,000 19/09/91 $42.000 19/09/94-19/09/2001
5,000 16/11/92 $39.625 Current-16/11/2002
5,000 16/11/92 $39.625 16/11/94-16/11/2002
5,000 16/11/92 $39.625 16/11/95-16/11/2002
5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
J. Otis Winters 15,000 5,000 15/11/93 $32.250 15/11/94-15/11/2003
5,000 15/11/93 $32.250 15/11/95-15/11/2003
5,000 15/11/93 $32.250 15/11/96-15/11/2003
</TABLE>
(c) The holdings of securities in Triton Energy in which the directors of
Triton Europe are interested as at February 3, 1994 are as follows:
<TABLE>
<CAPTION>
NAME TRITON ENERGY
COMMON STOCK
<S> <C>
T.G. Finck 4,000
R.B Holland III 3,020
W.I. Lee 340,758
</TABLE>
6. HOLDINGS OF THE TRITON ENERGY GROUP IN TRITON EUROPE
The interests of Triton Energy group and its directors in the share capital of
Triton Europe as at February 3, 1994, are as follows:
<TABLE>
<CAPTION>
Ordinary Shares
- -------------------------------------------------------------------
Triton Oil & Gas Corporation (59.47% of the total) 49,058,805
- -------------------------------------------------------------------
<S> <C>
Mr H. L. Brewer 1,000
Mr R. H. Eubank 2,500
Mr W. I. Lee* 1,000
<FN>
*also a director of Triton Europe
</TABLE>
7. INTERESTS OF THE DIRECTORS OF TRITON EUROPE IN TRITON EUROPE
The interests of the directors of Triton Europe together with those of their
immediate families in shares of Triton Europe as shown in the Register of
Directors' interests maintained under the provisions of Sections 324 to 328 of
the Companies Act 1985 are set out below:
<TABLE>
<CAPTION>
ORDINARY SHARES
<S> <C>
Mr W. R. Smith 10,000
Mr D. P. Metcalfe 1,000
Mr M. A. R. Herzog 1,000
Mr J. J. Holtzscherer 1,000
Mr W. I. Lee 1,000
Mr R. B. Holland III 0
Mr T. G. Finck 0
</TABLE>
43
<PAGE>
8. DEALINGS
(a) In this paragraph 8 reference to the Disclosure Period is to the period
commencing on January 18, 1993 (being 12 months prior to the date of the
announcement of the Proposed Scheme) and ending on February 3, (the latest
practicable date prior to the printing of this document).
(b) DEALINGS IN TRITON EUROPE ORDINARY SHARES
During the Disclosure Period there were no dealings for value in Ordinary Shares
by those specified below:
(i) the directors and officers of Triton Europe;
(ii) the Triton Energy group; or
(iii) the directors and officers of Triton Energy.
(c) DEALINGS IN TRITON ENERGY COMMON STOCK, CONVERTIBLE DEBENTURES AND STOCK
OPTIONS
During the Disclosure period the following dealings for value in Triton
Energy Common Stock, convertible debentures and stock options have taken place
by the directors of Triton Energy:
<TABLE>
<CAPTION>
NO. OF
SHARES OF
NAME DATE ACQUISITION DISPOSAL COMMON STOCK PRICE
<S> <C> <C> <C> <C> <C>
HERBERT BREWER 31/12/93 GIFT 1,919 -
THOMAS FINCK* 10/07/93 PURCHASE 1,000 $30.875
30/11/93 PURCHASE 3,000 $30.125
JESSE E. HENDRICKS 01/07/93 GIFT 5,500 -
28/09/93 PURCHASE 1,000 $29.25
21/12/93 GIFT 100 -
WILLIAM LEE* 05/04/93 OPTION EXERCISE 1,388 $11.125
05/04/93 OPTION EXERCISE 22,000 $11.50
05/04/93 OPTION EXERCISE 36,113 $8.375
05/04/93 OPTION EXERCISE 462 $11.125
05/04/93 SALE 7,500 $39.50
05/04/93 SALE 5,000 $39.625
05/04/93 SALE 17,001 $39.75
05/04/93 SALE 14,000 $40.00
05/04/93 SALE 9,500 $40.125
05/04/93 SALE 12,500 $40.25
05/04/93 SALE 4,000 $40.375
15/12/93 DEBENTURE CONVERSION 50,000 $8.00
15/12/93 DEBENTURE CONVERSION 83,716 $15.118
21/12/93 SALE 23,744 $29.25
21/12/93 SALE 5,000 $29.375
OTIS WINTERS 16/09/93 PURCHASE 2,000 $30.125
<FN>
*ALSO DIRECTORS OF TRITON EUROPE.
</TABLE>
(d) During the Disclosure Period, the following dealings for value in
securities in Triton Energy have taken place by the directors of Triton Europe:
<TABLE>
<CAPTION>
NO. OF
SHARES OF
NAME DATE ACQUISITION DISPOSAL COMMON STOCK PRICE
<S> <C> <C> <C> <C> <C>
R. B. Holland III 17/12/93 Purchase 1,020 $28.75
04/08/93 Purchase 2,000 $31.50
</TABLE>
See also paragraph 8(c), above.
44
<PAGE>
(e) GENERAL
Save as disclosed herein:
(1) Neither Triton Europe nor Triton Energy nor any of the directors of
Triton Europe or Triton Energy or any of their close relatives and
related trusts nor any person acting in concert (for the purposes of
the Code) with Triton Energy for the purpose of the Scheme owns,
controls or is interested in (as defined in parts VI and X of The
Companies Act 1985) any shares in Triton Europe or Triton Energy, or
other securities convertible into or rights to subscribe for or
options in respect of such shares, or has dealt for value therein
during the Disclosure Period.
(2) No subsidiary of Triton Europe or pension fund of any member of the
Triton Europe group nor any bank, stockbroker, financial or other
professional adviser of Triton Europe, nor any person controlling,
controlled by or under the same control as any such adviser (other
than an exempt market maker) owns or controls any shares in Triton
Europe or Triton Energy, or other securities convertible into or
rights to subscribe for or options in respect of such shares, or has
dealt for value therein during the Disclosure Period. In this
paragraph the reference to a "bank" does not include a bank whose sole
relationship with Triton Europe is the provision of normal commercial
banking services.
(3) No person mentioned in sub-paragraphs (1) to (2) above has dealt for
value in relevant securities during the Disclosure Period, and no
person mentioned in sub-paragraph (3) has dealt for value in any
shares in Triton Europe or Triton Energy, or other securities
convertible into or rights to subscribe for or options in respect of
such shares during the Disclosure Period.
(f) The following persons, all being Scheme Shareholders, have indicated their
intention to Triton Energy of voting in favour of the Scheme at the relevant
meetings in respect of the following number of Triton Europe shares:
<TABLE>
<CAPTION>
NUMBER OF
SCHEME SHARES
<S> <C>
L.L. Capital Partners 3,250,000
Provident Mutual 7,465,000
Legal & General 4,407,000
</TABLE>
The above-mentioned persons have also irrevocably undertaken to procure that no
election is made to receive cash consideration under the Scheme in respect of
any of their Scheme Shares.
9. SERVICE CONTRACTS OF TRITON EUROPE DIRECTORS
None of the directors of Triton Europe have service contracts with more than
twelve months to run.
10. MATERIAL CONTRACTS
TRITON ENERGY GROUP
The following contracts (not being entered into in the ordinary course of
business) have been entered into by Triton Energy and/or other members of the
Triton Energy group (other than the Triton Europe group) since January 18, 1992
(being the date 2 years before the announcement of the proposed Scheme) and are
or may be material:
(i) A Senior Subordinated Indenture dated December 15, 1993 between Triton
Energy and United States Trust Company of New York (as Trustee)
pursuant to which Triton Energy can from time to time issue unsecured
senior subordinated debentures, notes or other evidences of
indebtedness to be issued in one or more series up to such principal
amount or amounts as may from time to time be authorised in accordance
with the terms of the Indenture.
(ii) First Supplemental Indenture (to the Senior Subordinated Debenture of
December 15, 1993) dated December 15, 1993 between Triton Energy and
the United States Trust Company of New York (as Trustee) pursuant to
which Triton Energy issued $170,000,000 in aggregate principal amount
of 9 3/4 per cent Senior Subordinated Discount Notes due 2000.
(iii) An Indenture dated November 13, 1992 between Triton Energy and
Chemical Bank (as Trustee) pursuant to which Triton Energy constituted
$240,000,000 Senior Subordinated Discount Notes due 1997.
45
<PAGE>
(iv) A Supplemental Indenture dated July 1, 1993 between Triton Energy and
Chemical Bank (as Trustee) amending the terms of the Indenture dated
November 13, 1992 (including those relating to limitations on certain
payments by Triton Energy).
(v) Supplemental Indenture dated August 16, 1993 between Triton Energy and
Chemical Bank (as Trustee) amending the Indenture dated November 13,
1992 (including provisions concerning limitations on certain
restricted payments, maintenance of consolidated net worth, and
disposition of proceeds of asset sales).
(vi) Underwriting Agreement dated June 18, 1993 between Triton Canada
Resources Limited (1) Triton Energy Corporation (2) ((1) and (2)
together the Issuers) RBC Dominion Securities Inc. (3) Burns Fry
Limited (4) Gordon Capital Corporation (5) Nesbit Thompson Inc. (6)
Midland Walwyn Capital Inc. (7) ScotiaMcLeod Inc. (8) Trilon
Securities Corporation (9) ((3) -(9) together the Underwriters)
pursuant to which the Underwriters offered to purchase from Triton
Canada Resources Limited and Triton Energy 40,000,000 special warrants
to be issued by Triton Canada Resources Limited and Triton Energy
pursuant to the issue by Triton Canada Resources Limited of 9,501,775
common shares and the sale by Triton Energy of 30,498,225 common
shares of Triton Canada owned by Triton Energy or its directors or
wholly-owned subsidiaries. The Underwriters agreed to pay $2.65 per
special warrant and Triton Energy received net proceeds of $59
million.
(vii) A Sale and Purchase Agreement dated August 26, 1993 between Triton Oil
& Gas Corporation (as Seller) Torch Energy Advisers Incorporated (as
Buyer) and Triton Energy pursuant to which Triton Oil & Gas
Corporation sold a substantial proportion of its working interests in
Oil & Gas Reserves in the United States for a base purchase price of
$18.7 million. This base purchase price was reduced at closing by
approximately $2.6 million to reflect estimated post-January 1, 1993
revenues and expenses (as the transaction was dated effective from
January 1, 1993).
(viii) A Sale and Purchase Agreement dated August 25, 1993 between Triton
Fuel Group, Inc. and Avfuel Corporation, pursuant to which Triton Fuel
Group Inc. sold the aviation fuel component of its wholesale fuel
product segment for approximately $15 million.
11. TAXATION
(A) UK INCOME TAX
Scheme Shareholders resident in the United Kingdom will be liable to income tax
or corporation tax on dividends paid by Triton Energy on the Convertible
Preferred Stock and Triton Energy Common Stock at the rate applicable to their
particular circumstances, although, if such shareholders are taxable on a
remittance basis (where, for example, a Scheme Shareholder is not domiciled in
the United Kingdom) any such liability is limited to the extent that such
dividends are remitted or deemed to have been remitted to the United Kingdom.
Generally, Scheme Shareholders resident in the United Kingdom will bring into
account the gross amount of such dividends before deduction of any US tax
withheld or United Kingdom tax deducted. For individuals in certain
circumstances tax is based on dividends arising or remitted in the previous
year. Subject to certain limits and the individual circumstances of Scheme
Shareholders, any US tax withheld (see below) will be available as a credit
against the liability of such shareholders resident in the United Kingdom to pay
corporation tax or income tax as appropriate in respect of the relevant
dividends.
If dividends are paid by or through a paying agent or collecting agent in the
United Kingdom (for example, a United Kingdom bank which obtains payment of a
dividend warrant), such agent will be required to withhold, or deduct for or on
account of, United Kingdom income tax at 20 per cent from the gross amount of
such dividends unless evidence in a form satisfactory to the Inland Revenue is
produced that the beneficial owner of the shares entitled to the dividend is not
resident in the United Kingdom for tax purposes. In making such deduction, such
paying or collecting agent would normally be permitted to allow a credit for US
tax withheld at the rate of 15 per cent on such amount. Consequently, such
paying or collecting agent will normally be obliged to withhold at the rate of 5
per cent on the gross amount. If a United Kingdom resident entitled to relief
under the United Kingdom/US double tax treaty suffers US withholding tax at a
rate in excess of 15 per cent he/she may be able to recover the excess on
application to the US authorities.
46
<PAGE>
(B) UNITED STATES
GENERAL
The following is a general discussion of certain United States federal income
tax consequences of the ownership and disposition of Convertible Preferred Stock
or Triton Energy Common Stock (collectively referred to in this section as
"Stock") by a Scheme Shareholder who is a resident of the United Kingdom for
taxation purposes and who is not a United States person (a "U.K. Holder"). A
"United States person" is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source. This discussion does not address all aspects of United
States federal income taxes and does not deal with foreign, state and local
consequences that may be relevant to such U.K. Holders in light of their
personal circumstances. Furthermore, this discussion is based on provisions of
the Internal Revenue Code of 1986, as amended (the "I.R. Code"), existing and
proposed regulations promulgated thereunder and administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change.
DIVIDENDS
Under the provisions of the United Kingdom/United States double taxation treaty,
the rate of United States withholding tax on a dividend paid by Triton Energy to
a person resident in the United Kingdom for the purposes of the treaty and who
does not control 10 per cent or more of the voting stock of Triton Energy is,
subject to certain exceptions, reduced to 15 per cent of the amount of the
dividend. However, if the dividends are effectively connected with the conduct
of a trade or business of the U.K. Holder within the United States, they are not
subject to withholding but are subject to United States federal income tax on a
net income basis at applicable graduated individual or corporate rates.
Under current United States Treasury regulations, dividends paid to an address
outside the United States are presumed to be paid to a resident of such country
for the purposes of the withholding tax discussed above, and, under the current
interpretation of United States Treasury regulations, for the purposes of
determining the applicability of a tax treaty rate. Under proposed United States
Treasury regulations not currently in effect, but which could become effective
during the period a U.K. Holder owns Stock, however, a shareholder who wishes to
claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification and other requirements. Other certification and
disclosure requirements must be met in order to be exempt from withholding tax
under the effectively connected income exemption.
A U.K. Holder of Stock eligible for a reduced rate of United States withholding
tax pursuant to the United Kingdom/United States double taxation treaty may
obtain a refund of any excess amounts withheld by filing an appropriate claim
for refund with the Internal Revenue Service (the "IRS").
ADJUSTMENTS TO CONVERSION PRICE
The conversion price of the Convertible Preferred Stock is subject to adjustment
under certain circumstances. Section 305 of the I.R. Code and the Treasury
regulations issued thereunder may treat holders of the Convertible Preferred
Stock or Common Stock as having received a constructive distribution, taxable as
a dividend to the extent of Triton Energy's current and/or accumulated earnings
and profits if, and to the extent that, certain adjustments in the conversion
price increase the proportionate interest of a holder of Convertible Preferred
Stock, or a holder of Common Stock, in the fully diluted Common Stock of Triton
Energy.
GAIN ON DISPOSITION OF STOCK
A U.K. Holder will generally not be subject to United States federal income tax
with respect to gains recognised on a sale or other disposition of Stock unless
(i) the gain is effectively connected with a trade or business of the U.K.
Holder in the United States or (ii) in the case of a U.K. Holder who is an
individual and holds the Stock as a capital asset, such holder is present in the
United States for 183 or more days in the taxable year of the sale or other
disposition and certain other conditions are met.
47
<PAGE>
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
Under Treasury regulations, the Company must report annually to the IRS and to
each shareholder the amount of dividends paid to such holder and the tax
withheld with respect to such dividends. These information reporting
requirements apply even if withholding was not required because the dividends
were effectively connected with a trade or business in the United States of the
shareholder or withholding was reduced or eliminated by an applicable income tax
treaty. Copies of the information returns reporting such dividends and
withholding may also be made available to the tax authorities in the United
Kingdom under the provisions of the United Kingdom/United States double taxation
treaty.
Backup withholding (which generally is a withholding tax imposed at the rate of
31 per cent on certain payments to persons that fail to furnish certain
information under the United States information reporting requirements) will
generally not apply to dividends paid to U.K. Holders outside the United States.
In that regard, under temporary United States Treasury regulations, backup
withholding will not apply to dividends paid on Stock to a shareholder at an
address outside the United States unless the payer has knowledge that the payee
is a U.S. person.
In general, backup withholding and information reporting will not apply to a
payment of the proceeds of a sale of Stock by or through a foreign office of a
broker. If, however, such broker is, for United States federal income tax
purposes a U.S. person, a controlled foreign corporation, or a foreign person
that derives 50 per cent or more of its gross income for certain periods from
the conduct of a trade or business in the United States, such payments will not
be subject to backup withholding but will be subject to information reporting,
unless (1) such broker has documentary evidence in its records that the
beneficial owner is a non-U.S. Holder and certain other conditions are met, or
(2) the beneficial owner otherwise establishes an exemption. Temporary Treasury
regulations provide that the Treasury is considering whether backup withholding
will apply with respect to such payments that are not currently subject to
backup withholding under the current regulations. Under proposed Treasury
regulations not currently in effect, backup withholding will not apply to such
payments absent actual knowledge that the payee is a United States person.
Payment by a United States office of a broker of the proceeds of a sale of Stock
is subject to both backup withholding and information reporting unless the
beneficial owner certifies under penalties of perjury that it is a non-U.S.
Holder, or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
12. LITIGATION
Between May 27, 1992 and June 15, 1992 several suits were filed in the United
States District Court for the Northern District of Texas, Dallas Division, by
seven alleged shareholders against Triton Energy and various present and former
directors and officers of Triton Energy. The plaintiffs in all of these cases
seek to represent alleged classes of purchasers of Triton Energy's securities.
On October 6, 1992, the plaintiffs in all but one of the suits collectively
filed a First Amended Consolidated and Supplemental Class Action Complaint in
which they allege violations of the Securities Exchange Act of 1984 and Rule
10b-5 promulgated thereunder, a common law fraud and statutory fraud and
negligent misrepresentation. Among other allegations, the plaintiffs
additionally allege illegal trades of Triton Energy's stock by certain of the
defendants based on inside information. Triton Energy and the individual
defendants have agreed with the plaintiffs' counsel to settle all of the above
actions, and have agreed with their insurers regarding their respective funding
of the settlement and defence costs. Under the agreement with the insurers, one
third of settlement and defence costs, including fees and expenses of counsel
for the individual defendants, would be funded by Triton Energy and two-thirds
would be funded by the insurers. Completion of the settlement is subject to
various conditions, including court approval. The settlement provides for the
payment of an aggregate of $8.15 million (less expenses) to all persons who
purchased publicly traded securities of Triton Energy during the period between
August 31, 1990 and May 27, 1992 and all United States citizens and residents
who purchased publicly traded securities of Triton Europe during the period
between April 7, 1992 and April 19, 1993 (but excluding (a) the defendants and
their assigns, (b) subsidiaries and affiliates of Triton Energy and (c)
48
<PAGE>
members of the immediate families of the individual defendants). L.L. Capital
Partners is one of the purchasers of Ordinary Shares in Triton Europe who may be
eligible, and may elect, to participate in the settlement.
Further details of the litigation are provided in the accompanying document
entitled "Information on Triton Energy" and form an integral part of this
document.
13. GENERAL
(a) Save as disclosed herein, no agreement, arrangement or understanding
(including any compensation arrangements) exists between Triton Energy or any
party acting in concert (as defined in the Code) with Triton Energy and any of
the directors, recent directors, shareholders or recent shareholders of Triton
Europe having any connection with or dependence on the Scheme.
(b) There is no arrangement (including indemnity or option arrangements) or any
other agreement or understanding, formal or informal, of whatever nature between
any person and Triton Energy or any person acting in concert with Triton Energy,
or between any person and Triton Europe or any of their respective associates,
relating to any shares in Triton Energy or Triton Europe, or other securities
convertible into or rights to subscribe for or options in respect of such
shares, which may be an inducement to deal or to refrain from dealing therein.
In this sub-paragraph (b):
(i) references to an "associate" are to:
(aa) subsidiaries and associated companies of Triton Energy and Triton
Europe respectively and companies of which any such subsidiaries or
associated companies are associated companies;
(bb) banks, financial and other professional advisors (including
stockbrokers) to Triton Energy and Triton Europe respectively or a
company covered in (aa) above, including persons controlling,
controlled by or under the same control as such banks, financial or
other professional advisors;
(cc) the directors (together with their close relatives and related
trusts) of Triton Energy and Triton Europe respectively or a company
covered in (aa) above; and
(dd) the pension funds of Triton Energy and Triton Europe respectively or
a company covered in (aa) above;
(ii) references to a "bank" do not apply to a bank whose sole relationship
with Triton Energy and Triton Europe respectively or a company covered
in (aa) above is the provision of normal commercial banking services or
such activities in connection with the Scheme as registration work; and
(iii) ownership or control of twenty per cent or more of the equity share
capital of a company is regarded as the test of associated status and
"control" means a holding, or aggregate holdings, of shares carrying
thirty per cent or more of the voting rights attributable to the share
capital of a company which are currently exercisable at a general
meeting, irrespective of whether the holding or aggregate holding gives
de facto control.
(c) Settlement of the consideration to which any Scheme Shareholder is entitled
under the terms of the Scheme will be implemented in full in accordance with the
terms of the Scheme without regard to any lien, right of set-off, counterclaim
or other analogous right to which Triton Energy may otherwise be, or claim to
be, entitled as against the Scheme Shareholder.
(d) J.P. Morgan, financial adviser to Triton Energy, is satisfied that adequate
resources are available to Triton Energy to meet its cash obligations under the
terms of the Scheme.
(e) J.P. Morgan and Kleinwort Benson Securities have each given and not
withdrawn their respective written consents to the issue of this document with
references to their respective names in the form and context in which they
appear.
DeGolyer and MacNaughton has given and not withdrawn its consent to the issue of
the Scheme Documents with references to their name and letter in the form and
context in which it appears.
(f) There is no agreement, arrangement or understanding whereby the beneficial
ownership of any of the shares acquired by Triton Energy pursuant to the Scheme
will be transferred to any other persons save that Triton Energy reserves the
right to transfer such shares to any of its subsidiaries.
49
<PAGE>
(g) Neither J.P. Morgan nor Kleinwort Benson Securities will treat any person
receiving or relying upon this document as being, by virtue thereof, its
customer within the meaning and for the purposes of the Rules of the Securities
and Futures Authority Limited (the 'SFA'). In particular, they will not owe any
such person any of the duties or responsibilities owed to their customers nor be
responsible for advising any such person on the Scheme.
(h) So far as the directors of Triton Energy are aware, save as disclosed in
the Scheme Document, there have been no material changes in the financial or
trading position of Triton Energy since May 31, 1993.
(i) No proposal exists in connection with the Scheme that any payment or other
benefit shall be made or given to any director of Triton Europe as compensation
for loss of office or as consideration for or in connection with his retiring
from office.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection during normal
business hours on any weekday (Saturdays, Sundays and public holidays excepted),
at the offices of Linklaters & Paines, Barrington House, 59-67 Gresham Street,
London EC2V 7JA while the Scheme remains capable of becoming effective.
(a) The Memorandum and Articles of Association, as amended, of Triton Europe.
(b) The Articles of Incorporation, as amended, and the by-laws of Triton
Energy.
(c) The audited consolidated accounts of Triton Europe for the two financial
years ended on May 31, 1992 and 1993.
(d) The audited consolidated financial statements of Triton Energy for the two
accounting periods ended May 31, 1992 and 1993 and Quarterly Reports on
Form 10-Q in respect of the quarters ended August 31 and November 30,
1993.
(e) Copies of all Triton Energy directors' Service Agreements of duration
greater than one year.
(f) The Material Contracts referred to in paragraph 10 above.
(g) The letters of consent referred to in paragraph 13(e) above.
(h) The letters of intention and undertaking given by the Scheme Shareholders
referred to in paragraph 8(f) above.
(i) The Designation referred to in Appendix III above.
50
<PAGE>
THE SCHEME OF ARRANGEMENT
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION No. 00522 of 1994
IN THE MATTER OF TRITON EUROPE PUBLIC LIMITED COMPANY
and
IN THE MATTER OF THE COMPANIES ACT 1985
SCHEME OF ARRANGEMENT
(under section 425 of the Companies Act 1985)
Between
TRITON EUROPE PUBLIC LIMITED COMPANY
and
THE HOLDERS OF
THE SCHEME SHARES (AS HEREINAFTER DEFINED)
PRELIMINARY
(A) In this Scheme, unless inconsistent with the subject or context, the
following expressions shall bear the following meanings, namely:
"Triton Europe" Triton Europe Public Limited Company
"Ordinary Shares" Ordinary Shares of 5p each in the share capital of
Triton Europe in issue at the date of this Scheme
"Effective Date" the day on which this Scheme becomes effective in
accordance with clause 9 of this Scheme
"Explanatory Statement" the Explanatory Statement circulated with this Scheme
pursuant to section 426 of the Companies Act 1985
"holder" includes any person entitled by transmission
"Triton Energy" Triton Energy Corporation
"Convertible Preferred Convertible Preferred Stock of Triton Energy to be
Stock" created by Triton Energy in accordance with clause 1
of this Scheme
"Record Date" February 22, 1994
"Redemption Price" an amount in US dollars equivalent to 120 per cent of
the average closing price for one share of Triton
Energy Common Stock (par value $1.00) on the New York
Stock Exchange for the 5 trading days prior to the
date of the hearing of the High Court of Justice to
sanction this Scheme.
"Scheme Shares" the 33,441,195 Ordinary Shares not beneficially owned
by Triton Oil & Gas Corporation
"this Scheme" this Scheme in its present form or with any
modification, addition or condition which the Court
may think fit to approve or impose
(B) The authorised share capital of Triton Europe is L6,250,000 divided into
125,000,000 Ordinary Shares of 5 pence each of which 82,500,000 have been issued
and are credited as fully paid and the remainder are unissued;
(C) Triton Energy is incorporated under the laws of the State of Texas. Triton
Oil & Gas Corporation, a wholly owned subsidiary of Triton Energy, is the
beneficial owner of 49,058,805 Ordinary Shares;
(D) The present authorised share capital of Triton Energy is $200,000,000
divided into 200,000,000 ordinary shares of $1 each of which 35,414,224 have
been issued and are credited as fully paid and the remainder are unissued, and
5,000,000 shares of preferred stock, without par value, none of which has been
issued;
51
<PAGE>
(E) Triton Energy has agreed to appear by Counsel on the hearing of the petition
to sanction this Scheme and to undertake to the Court to be bound thereby and to
execute and do and procure to be executed and done all such documents, acts and
things as may be necessary or desirable for the purpose of giving effect to this
Scheme.
The Scheme
1. CREATION OF TRITON ENERGY PREFERRED STOCK
On or prior to the Effective Date Triton Energy shall create sufficient 5 per
cent. Convertible Preferred Stock to give effect to this Scheme. Such stock
shall conform to the particulars thereof set out in Appendix III of the
Explanatory Statement.
2. REORGANISATION OF THE CAPITAL OF TRITON EUROPE
On the Effective Date the Scheme Shares shall be reorganised so that those
Scheme Shares in respect of which Cash Election Notices shall not have been
completed pursuant to Clause 5 of this Scheme shall be designated as "A" Scheme
Shares and all other Scheme Shares shall be designated as a separate class of
"B" Scheme Shares each having the rights and being subject to the restrictions
set out in the Special Resolution in the Notice convening the Extraordinary
General Meeting of Triton Europe for March 3, 1994.
3. CANCELLATION OF SCHEME SHARES
(a) The authorised share capital of Triton Europe shall be reduced by
cancelling the Scheme Shares.
(b) Forthwith and contingently upon the said reduction of capital taking effect
the authorised share capital of Triton Europe shall be increased to its former
amount by the creation of 33,441,195 ordinary shares of 5p each.
(c) On the Effective Date the credit of L1,672,059.15 arising in the books of
account of Triton Europe as a result of such reduction of capital shall be
capitalised and applied in paying up in full the 33,441,195 ordinary shares of
5p each so created which shares shall be allotted credited as fully paid to
Triton Energy or its nominees.
4. CONSIDERATION
(a) "A" Scheme Shares
In consideration of the cancellation of the "A" Scheme Shares Triton Energy
shall allot (subject to the provisions of Clause 6 of this Scheme) to the
holders thereof one share of Convertible Preferred Stock for every multiple of
that number of "A" Scheme Shares held by such persons respectively whose
equivalent value in US dollars most nearly equals (without exceeding) the
Redemption Price. For this purpose, each 'A' Scheme Share will be attributed a
value of 37.5p and its equivalent in US dollars $0.56 has been calculated on the
basis of an exchange rate of $1.4925, the JP Morgan exchange rate prevailing at
5.00 p.m. on February 3, 1994.
(b) "B" Scheme Shares
In consideration of the cancellation of the "B" Scheme Shares Triton Energy
shall (subject as hereinafter provided) pay to the persons who are the holders
thereof the sum of 37.5p for every "B" Scheme Share held by such persons
respectively provided that: -
(i) no holder of Scheme Shares shall be entitled to elect pursuant to the
provisions of Clause 5 of this Scheme to receive cash in excess of
L6,700.17 and any cash election delivered pursuant to such Clause
which would otherwise entitle the holder to receive an amount in
excess of such sum shall be deemed to be an election to receive cash
in respect of such number of Scheme Shares as would entitle the holder
to receive cash equal to such amount; and
(ii) the maximum amount of cash which would be required to be paid by
Triton Energy in respect of Cash Elections and pursuant to Clause 6 of
this Scheme shall not exceed in the aggregate L1,340,033.50. If the
amount which would otherwise be payable by Triton Energy to the
holders of the Scheme Shares shall exceed L1,340,033.50 the maximum
Cash Election amount shall be reduced from L6,700.17 to such amount so
that the amount payable by Triton Energy in respect of Cash Elections
shall not exceed the difference betweenL 1,340,033.50 and the
aggregate amount which Triton Energy shall be required to pay in
respect of fractional entitlements.
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(iii) a holder of Scheme Shares shall only be entitled to elect to receive
cash in respect of Scheme Shares (i) which are registered in his name
on the Register of Members of Triton Europe on or before February 22,
1994 or (ii) in respect of which he is unconditionally entitled to be
so registered on that date.
5. CASH ELECTION NOTICES
AN ELECTION TO RECEIVE THE CASH CONSIDERATION IN RESPECT OF ANY SCHEME
SHARES SHALL BE MADE BY DULY COMPLETING A CASH ELECTION NOTICE IN
ACCORDANCE WITH THE INSTRUCTIONS THEREON AND BY SENDING OR DELIVERING THE
SAME TO THE RECEIVING BANK TRITON EUROPE, NATIONAL WESTMINSTER BANK PLC,
REGISTRAR'S DEPARTMENT, NEW ISSUES SECTION, PO BOX 859, THE LOMBARD CENTRE,
CONSORT HOUSE, EAST STREET, BEDMINSTER, BRISTOL BS99 1XZ, OR BY HAND ONLY
WITH NATIONAL WESTMINSTER BANK PLC, REGISTRAR'S DEPARTMENT, NEW ISSUES
SECTION, 15 FEATHERSTONE STREET, LONDON EC1 8QS, SO AS TO BE RECEIVED NO
LATER THAN 3 P.M. ON MARCH 28, 1994. EVERY CASH ELECTION NOTICE SHALL BE IN
THE FORM OR SUBSTANTIALLY IN THE FORM OF THE CASH ELECTION NOTICE
CIRCULATED TO THE HOLDERS OF THE SCHEME SHARES WITH THE EXPLANATORY
STATEMENT AND SHALL BE SIGNED OR, (IN THE CASE OF A BODY CORPORATE HAVING A
COMMON SEAL) EXECUTED UNDER ITS COMMON SEAL BY THE HOLDER, OR IN THE CASE
OF JOINT HOLDINGS, ALL THE JOINT HOLDERS OF THE SCHEME SHARES TO WHICH IT
RELATES. A CASH ELECTION NOTICE SO COMPLETED AND LODGED SHALL BE
IRREVOCABLE AND SHALL REMAIN IN FORCE NOTWITHSTANDING ANY TRANSFER OF THE
SCHEME SHARES TO WHICH IT RELATES.
6. FRACTIONS
No fraction of a share of Convertible Preferred Stock shall be allotted pursuant
to the provisions of Clause 4(a) of this Scheme. If, save for the provisions of
this Clause, any holding or part of a holding of Scheme Shares would require
Triton Energy to allot a fraction of a share of Convertible Preferred Stock,
Triton Energy shall pay to the relevant holder an amount in sterling equal to
the redemption price of the Convertible Preferred Stock (calculated at the
exchange rate prevailing on February 3, 1994) multiplied by the relevant
fraction save that Triton Energy shall not be required to pay to any holder of
Scheme Shares any sum in respect of fractional entitlements amounting to less
than 50p.
7. CERTIFICATES AND PAYMENT
(a) Not later than 7 days after the Effective Date Triton Energy shall: -
(i) make all such allotments of the Convertible Preferred Stock to the
persons respectively entitled thereto as are required to be made by it
to give effect to this Scheme and shall deliver to such persons
certificates for the Convertible Preferred Stock so allotted to them
respectively; and
(ii) deliver to the persons respectively entitled thereto cheques for any
sums payable to them respectively under Clauses 4 and 6 of this
Scheme.
(b) All deliveries of certificates and cheques required to be made by sub-clause
(a) of this Clause 7 shall be effected by posting the same in prepaid envelopes
addressed to the persons respectively entitled thereto at their respective
addresses as appearing in the register of members of Triton Europe at the close
of business on the Record Date, or in the case of joint holders, at the address
appearing in such register at such close of business of that one of the joint
holders whose name stands first in such register in respect of the joint
holding, or in accordance with any special instructions regarding
communications.
(c) Each such cheque referred to in sub-clause (a) of this Clause 7 shall be
payable to the order of the person(s) entitled thereto, and the encashment of
any such cheque shall be a good discharge to Triton Energy for the monies
represented thereby.
(d) Neither Triton Energy nor Triton Europe shall be responsible for any loss in
the transmission of certificates or cheques posted in accordance with sub-clause
(b) of this Clause 7.
8. CERTIFICATES
As from and including the Effective Date each existing certificate representing
a holding of Scheme Shares shall cease to be valid and the holder of any such
certificate shall be bound on the request of Triton Energy to deliver up the
same as directed by Triton Energy.
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9. EFFECTIVE DATE
(a) This Scheme shall become effective as soon as an office copy of the Order of
the Court sanctioning this Scheme under section 425 of the Companies Act 1985
and confirming under Section 137 of the same Act the reduction of the capital of
Triton Europe provided for by clause 2(a) of this Scheme, shall have been
delivered to the Registrar of Companies for registration.
(b) Unless this Scheme shall have become effective on or before June 30, 1994 or
such later date, if any, as Triton Energy and Triton Europe may approve and the
Court may allow, this Scheme shall never become effective.
10. MODIFICATION
Triton Energy and Triton Europe may jointly consent on behalf of all concerned
to any modification of or addition to this Scheme or to any condition which the
Court may think fit to approve or impose.
Dated February 8, 1994
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NOTICE OF COURT MEETING
IN THE HIGH COURT
CHANCERY DIVISION No. 00522 of 1994
MR. REGISTRAR BUCKLEY
IN THE MATTER OF TRITON EUROPE PUBLIC LIMITED COMPANY
and
IN THE MATTER OF THE COMPANIES ACT 1985
------------------------------
Notice is hereby given that by an Order dated February 3, 1994 made in the above
matters, the Court has directed a Meeting to be convened of the holders of the
Scheme Shares (as defined in the Scheme of Arrangement hereinafter mentioned)
for the purpose of considering and, if thought fit, approving (with or without
modification) a Scheme of Arrangement proposed to be made between the above
named Company ("the Company") and the holders of the Scheme Shares and that such
meeting will be held at 20 Fenchurch Street, London EC3P 3DB on March 3, 1994 at
10.30 a.m. at which place and time all such shareholders are requested to
attend.
A copy of the said Scheme of Arrangement and a copy of a Statement required to
be furnished pursuant to section 426 of the above mentioned Act are incorporated
in the document of which this Notice forms part.
THE SAID SHAREHOLDERS MAY VOTE IN PERSON AT THE SAID MEETING OR THEY MAY APPOINT
ANOTHER PERSON, WHETHER A MEMBER OF THE COMPANY OR NOT, AS THEIR PROXY TO ATTEND
AND VOTE IN THEIR STEAD. A FORM OF PROXY FOR THE SAID MEETING IS ENCLOSED
HEREWITH.
In the case of joint holders, the vote of the senior who tenders a vote whether
in person or by proxy will be accepted to the exclusion of the votes of the
other joint holders and for this purpose seniority will be determined by the
order in which the names stand in the Register of Members of the Company in
respect of the joint holding.
It is requested that forms appointing proxies be lodged with the Registrars of
the Company, National Westminster Bank Plc, Registrar's Department, PO Box 82,
Caxton House, Redcliffe Way, Bristol BS99 7YA, aforesaid not less than 48 hours
before the time appointed for the said Meeting but, if forms are not so lodged,
they may be handed to the Chairman of the Meeting.
By the said Order, the Court has appointed William Robertson Smith or failing
him Jean Jacques Holtzscherer, to act as Chairman of the said Meeting and has
directed the Chairman to report the result thereof to the Court.
The said Scheme of Arrangement will be subject to the subsequent approval of the
Court.
February 8, 1994
LINKLATERS & PAINES (OHC)
Barrington House
59/67 Gresham Street
London EC2V 7JA
SOLICITORS FOR THE COMPANY
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NOTICE OF THE EXTRAORDINARY GENERAL MEETING
TRITON EUROPE PLC
NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of Triton Europe
plc will be held at 20 Fenchurch Street, London EC3P 3DB on March 3, 1994 at
10.45 a.m. (or as soon thereafter as the Meeting of the holders of the Scheme
Shares (as defined in the Scheme of Arrangement hereinafter mentioned), convened
by direction of the High Court of Justice for the same date and place shall have
been concluded or adjourned) to consider and, if thought fit, pass the following
resolution, which will be proposed as a Special Resolution
THAT:
(a) the Scheme of Arrangement dated February 8, 1994 ("the Scheme") and
circulated with the Notice convening this Meeting a print of which has been
produced to this Meeting and signed for the purpose of identification by
the Chairman hereof be and the same is hereby approved.
(b) on the Effective Date (as defined in the Scheme) the Scheme Shares (as so
defined) in respect of which Cash Election Notices shall not have been
completed in accordance with and pursuant to Clause 5 of the Scheme shall
be converted into and designated as a separate class of "A" Scheme Shares
and the remaining Scheme Shares shall be converted into and designated as a
separate class of "B" Scheme Shares each such class having the rights and
being subject to the restrictions respectively set out in sub-paragraph (c)
of this Resolution.
(c) the said "A" Scheme Shares and "B" Scheme Shares shall rank in all respects
pari passu with the Ordinary Shares in the capital of the Company save
that:
(i) as regards income the holders of the "B" Scheme Shares shall be
entitled to receive, in priority to the holders of "A" Scheme Shares
and the Ordinary Shares out of the profits which the Company may
determine to distribute in respect of any financial year the sum of 1p
for each "B" Scheme Share held; and
(ii) as regards capital the holders of the "A" Scheme Shares shall be
entitled to receive in priority to the holders of the Ordinary Shares
and the "B" Scheme Shares on a return of assets on a winding up or
otherwise the sum of 1p for each "A" Scheme Shares held.
(d) forthwith upon the said conversion taking effect the capital of the Company
be reduced by canceling the Scheme Shares (as in the Scheme defined).
(e) forthwith and contingently upon the said reduction of capital taking effect
the capital of the Company be increased by the creation of 33,441,195
Ordinary Shares of 5p each and the credit of L1,672,059.15 arising as a
result of such reduction of capital be applied in paying up in full the
Ordinary Shares so created, such Ordinary Shares to be allotted and issued
credited as fully paid to Triton Energy Corporation or its nominees.
(f) the Directors of the Company be and they are hereby authorised for the
purposes of section 80 of the Companies Act 1985 to give effect to this
Resolution and accordingly to effect the allotments of Ordinary Shares
referred to in paragraph (e) above provided that (a) this authority shall
expire on October 27, 1994; (b) the maximum nominal amount of relevant
securities which may be allotted hereunder is L1,672,059.15 and (c) the
authority shall be without prejudice to any other authority under the said
Section 80 previously granted and in force on the date on which this
Resolution is passed.
A member entitled to attend and vote is entitled to appoint a proxy or proxies
to attend and, on a poll, vote instead of him. A proxy need not be a member of
the Company.
February 8, 1994
By Order of the Board
Notes: -
1. A form of proxy is enclosed. The appointment of a proxy will not prevent a
Shareholder from subsequently attending and voting at the meeting in
person.
2. To be effective the instrument appointing a proxy, and any power of
attorney or other authority under which it is executed (or a duly certified
copy of any such power or authority), must be deposited with the Registrars
of the Company, the National Westminster Bank Plc, Registrar's Department,
PO Box 82, Caxton House, Redcliffe Way, Bristol B599 7YA, not less than 48
hours before the time for holding the meeting or adjourned meeting or (in
the case of a poll taken otherwise than at or on the same day as the
meeting or adjourned meeting) for the taking of the poll at which it is to
be used.
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