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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): May 2, 1996
GERRITY OIL & GAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-18667 84-1145802
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
4100 East Mississippi
Denver, Colorado 80222
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 757-1110
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Item 1. Changes in Control in Registrant.
As announced on May 2, 1996, the merger (the "Merger") of Gerrity Oil & Gas
Corporation ("Gerrity") into a wholly-owned subsidiary of Patina Oil & Gas
Corporation ("Patina") occurred on May 2, 1996 following approval of the Merger
by Gerrity's common shareholders. As a result of the Merger, Gerrity became a
wholly-owned subsidiary of Patina. Simultaneously with the Merger, Snyder Oil
Corporation ("SOCO") contributed all its assets and operations, subject to
certain limitations, in the Wattenberg Field of Colorado ("Wattenberg") to
Patina (the "Contribution"). In connection with the Contribution, Patina assumed
$75 million of bank debt from SOCO.
SOCO owns an aggregate of 14,000,000 shares of common stock of Patina, of
which 12,000,000 are common stock, par value $.01 per share ("Patina Common
Stock"), and 2,000,000 are Series A Common Stock. The Series A Common Stock is a
special series of common stock of Patina having three votes per share, and will
convert automatically into ordinary Patina Common Stock (i.e., shares with one
vote per share) upon transfer of those shares by SOCO to a non-affiliate or if
Patina ceases to be included in the consolidated financial statements of SOCO.
Thus, SOCO owns 70% of the outstanding shares of the common stock of Patina and
holds 75% of the voting power of Patina's common stock.
Pursuant to the terms of the Merger, the shares of common stock of Gerrity
issued and outstanding immediately prior to the effective time of the Merger
were converted into an aggregate of 6,000,000 shares of Patina Common Stock and
3,000,000 five-year warrants initially to purchase one share of Patina Common
Stock at an exercise price of $12.50 per share (the"Patina Warrants").
In addition, pursuant to an exchange offer, approximately 2,286,308, or
75.3%, of the depositary shares representing Gerrity's $12 convertible preferred
stock were accepted by Patina for exchange into approximately 1.2 million shares
of Patina's 7 1/8% convertible preferred stock (the "Patina Preferred Stock").
The Patina Preferred Stock has a liquidation preference of $25.00 per share,
pays quarterly dividends at the rate of 7 1/8% per year and is convertible into
Patina Common Stock at a conversion price of $12.30, which conversion price is
subject to downward adjustment after the Merger to equal 123% of the average
closing price of the Patina Common stock for the ten trading days immediately
following the 60th day after the Merger, subject to a minimum conversion price
of $8.61.
Patina also issued a five-year warrant for 500,000 shares of Patina Common
Stock, at a price equal to the average closing price during the 10-day period
following the Merger, to Robert W. Gerrity, who resigned as an officer and
director of Gerrity in connection with the transaction.
Patina's long-term debt, after all transaction costs, is expected to
approximate $215 million initially. Patina has entered into a $240 million
credit facility with Texas Commerce Bank National Association, which serves as
Administrative Agent, NationsBank of Texas, N.A., Documentation Agent, and CIBC,
Inc., Credit Lyonnais New York Branch and Wells Fargo Bank, N.A., as co- agents.
The facility will be used to refinance debt to be assumed in the transaction,
including approximately $100 million of bank debt assumed from SOCO and Gerrity
and up to $100 million of Gerrity's senior subordinated notes if the holders
exercise their right to put the notes to Gerrity. $87 million of the facility
may be used only to repurchase Gerrit's senior subordinated notes. The balance
of the facility will be available for working capital. The stock of Patina's
subsidiaries, including Gerrity, is pledged to secure the obligations of Patina
credit agreement. Substantially all Gerrity's oil and gas properties are
mortgaged to secure Gerrity's obligations under the credit agreement.
The Amended and Restated Agreement and Plan of Merger dated as of January
16, 1996 as amended and restated as of March 20, 1996 (the "Merger Agreement"),
which was negotiated between representatives of SOCO and Gerrity, provides that
any contracts or transactions (other than transactions contemplated by the
Merger Agreement) involving Patina or any of its subsidiaries in which SOCO or
any of its subsidiaries has any interest (other than an interest solely as a
stockholder of Patina) shall be approved by either (a) a majority of the
disinterested directors of Patina or (b) a majority of any committee established
by the Patina Board of Directors that consists solely of directors that are
disinterested. In addition, in accordance with the Merger Agreement, SOCO and
Patina have entered into certain agreements, including a Business Opportunity
Agreement, Corporate Services Agreement, Cross-Indemnification Agreement and
Registration Rights Agreement, that will govern the relationship between SOCO
and Patina following the Merger.
The descriptions of the Merger Agreement, Business Opportunity Agreement,
Corporate Services Agreement, Cross-Indemnification Agreement and Registration
Rights Agreement included in this Report are summaries and are qualified in
their entirety by the respective terms of such agreements, which are filed as
exhibits to this Report and are incorporated herein by reference.