AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMERICAN EXPLORATION COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 74-2086890
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010-3088
(713) 756-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOHN M. HOGAN
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
AMERICAN EXPLORATION COMPANY
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010-3088
(713) 756-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copy to:
JOE S. POFF
BAKER & BOTTS, L.L.P.
ONE SHELL PLAZA
HOUSTON, TEXAS 77002
(713) 229-1410
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]_______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]_______________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Maximum
Amount Proposed Maximum Aggregate Amount of
Title of Each Class of Securities to be Offering Price Per Offering Registration
to be Registered Registered Unit (1) Price (1) Fee
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Common Stock, $.05 par value 150,000 $ 12.375 $1,856,250 $ 640
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(1) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee and based upon the average of the high
and low prices reported on the American Stock Exchange on July 1, 1996.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR *
* SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH *
* OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR *
* QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. *
* *
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SUBJECT TO COMPLETION, DATED JULY 8, 1996
PROSPECTUS
150,000 SHARES
AMERICAN EXPLORATION COMPANY
COMMON STOCK
(PAR VALUE $.05 PER SHARE)
The 150,000 shares (the "Shares") of common stock, par value $.05 per
share (the "Common Stock"), of American Exploration Company, a Delaware
corporation ("American" or the "Company"), offered hereby are held by a
stockholder of the Company (the "Selling Stockholder"). See "Selling
Stockholder." The Company will not receive any part of the proceeds of the sale
of the Shares offered hereby. The Shares have been approved for listing on the
American Stock Exchange.
Sales of the shares by the Selling Stockholder may be made from time to
time in one or more transactions, including block transactions, on the American
Stock Exchange, or any other exchange or quotation system on which the Common
Stock may be admitted for trading (collectively, the "Exchanges"), pursuant to
and in accordance with the applicable rules of the Exchanges, in negotiated
transactions or in a combination of any such methods of sale, at fixed prices
that may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Shares may
be offered directly, to or through agents designated from time to time, or to or
through brokers or dealers, or through any combination of such methods of sale.
Such agents, brokers or dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholder and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). A member firm of an
Exchange may be engaged to act as an agent in the sale of Shares by the Selling
Stockholder. To the extent required, specific additional information regarding
the Shares will be set forth in an accompanying Prospectus Supplement. See "Plan
of Distribution." The Selling Stockholder and any brokers, dealers, agents or
others that participate with the Selling Stockholder in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and any commissions or fees
received by such persons and any profit on the resale of the Shares purchased by
such persons may be deemed to be underwriting commissions or discounts under the
Securities Act. The Company has agreed to indemnify the Selling Stockholder
against certain liabilities, including liabilities under the Securities Act. See
"Plan of Distribution."
The Common Stock is listed on the American Stock Exchange under the symbol
"AX". On July 1, 1996, the closing sales price of the Common Stock as reported
on the American Stock Exchange was $12.375 per share.
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Investors should review the information contained or incorporated by
reference herein. IN PARTICULAR, INVESTORS SHOULD CONSIDER CAREFULLY THE MATTERS
SET FORTH UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 3.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is July __, 1996.
-1-
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission" or "SEC"). Such reports,
proxy statements and other information filed by the Company may be inspected at,
and upon payment of the Commission's customary charges copies may be obtained
from, the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Such reports, proxy
statements and other information are also available for inspection and copying
at prescribed rates at the Commission's regional offices at Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7
World Trade Center, New York, New York 10048. The Common Stock is listed on the
American Stock Exchange. Documents filed by the Company may also be inspected at
the offices of the American Stock Exchange, 86 Trinity Place, New York, New York
10006.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of the Company have been filed with the Commission
pursuant to the Exchange Act (File No. 0-11871) and are incorporated herein by
reference:
1. Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
2. Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
3. Current Report on Form 8-K, as amended by Form 8-K/A, dated
March 15, 1996; and
4. Description of Common Stock on Forms 8-A, filed on
April 30, 1984, November 16, 1987 and October 1, 1993.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
shall be deemed to be incorporated herein by reference and to be a part hereof.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request, a copy of any or all
of the documents incorporated by reference in this Prospectus, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference in such documents). Requests for such copies should be directed to
T. Frank Murphy, Vice President-Corporate Finance, American Exploration Company,
1331 Lamar, Suite 900, Houston, Texas 77010-3088, telephone (713) 756-6000.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-2-
THE COMPANY
American Exploration Company is an independent company engaged in the
exploration, development and production of oil and natural gas. The Company's
oil and gas operations are conducted in the United States with exploration and
development activities concentrated onshore in the Gulf Coast region of Texas
and Louisiana and offshore in the Gulf of Mexico.
The Company was incorporated in Delaware in 1980. Its executive offices
are located at 1331 Lamar, Suite 900, Houston, Texas 77010, and its telephone
number is (713) 756-6000.
RISK FACTORS
The following factors relating to the Company and the Common Stock, as
well as the information contained elsewhere in this Prospectus or incorporated
by reference herein, should be carefully considered when evaluating an
investment in the Shares.
INDUSTRY CONDITIONS; VOLATILITY OF CRUDE OIL AND NATURAL GAS PRICES
The Company's revenues, cash flow, profitability and future rate of growth
and the carrying value of its crude oil and natural gas properties are
substantially dependent upon the prices of oil and natural gas, which
historically have been volatile and are likely to continue to be volatile in the
future. Various factors beyond the control of the Company affect prices of oil
and natural gas, including worldwide and domestic supplies of and demand for oil
and gas; political and economic conditions; weather conditions; the ability of
the members of the Organization of Petroleum Exporting Countries to agree on and
maintain price and production controls; political instability or armed conflict
in oil-producing regions; the price of foreign imports; the level of consumer
demand; the price and availability of alternative fuels; and changes in existing
federal and state regulations. Any significant decline in oil or gas prices
could have a material adverse effect on the Company's operations, financial
condition and level of development and exploration expenditures and could result
in a reduction of the Company's borrowing base under its bank credit agreement,
thereby reducing the amount of credit available to the Company to fund its
exploration, development and acquisition activities.
INCURRENCE OF LOSSES AND WORKING CAPITAL DEFICITS
Although the Company reported net income available for Common Stock of
$2.1 million in 1995, the Company experienced significant net losses in 1994 and
1993. The 1995 net income included a $10.2 million gain on sales of properties,
partially offset by $1.8 million of impairment expense. There can be no
assurance that the Company will not experience losses in the future. If the
Company experiences significant losses, its ability to maintain compliance with
financial covenants in its debt instruments could be adversely affected.
Under certain circumstances, the Company may be required to write down the
book value of the Company's proved oil and natural gas properties or recognize
an impairment in the book value of its unproved properties. The Company has
experienced write-downs of its oil and natural gas properties during the last
few years.
The Company has maintained or incurred working capital deficits in the
ordinary course of its business and expects to continue to operate with such
working capital deficits in the future. The Company's working capital deficits
reflect, among other items, payables, short-term debt (including the current
portion of long-term debt), taxes and other amounts that are due within one
year. The Company generally intends to fund its working capital deficit through
operating cash flow and bank borrowings, as available. Any material adverse
developments relating to the Company's operating cash flow or its ability to
borrow under its existing or any future bank credit facility could have a
material adverse effect on the Company's financial condition.
-3-
RISKS OF DEVELOPMENT DRILLING, ACQUISITIONS AND EXPLORATION; REPLACEMENT OF
RESERVES
The Company intends to utilize its cash flow from operations and borrowing
capacity under its bank credit agreement to fund the Company's exploration,
development and exploitation activities and property acquisitions. The decision
to develop, exploit, purchase or explore a property will depend in part on the
Company's assessment of recoverable reserves, future crude oil and natural gas
prices and operating costs, potential environmental and other liabilities and
other factors. Such assessments are necessarily inexact and their accuracy is
inherently uncertain. Even if geophysical and geological analyses and
engineering studies, the results of which are often inconclusive or subject to
varying interpretations, indicate high reserve potential of a prospect or
project, there can be no assurance that the Company's development, exploitation,
acquisition or exploration activities will result in additional reserves or that
the Company will be successful in drilling productive wells.
In general, the volume of production from oil and natural gas properties
declines as reserves are depleted. Except to the extent the Company conducts
successful development, exploitation and exploration activities or acquires
properties containing proved reserves, or both, the proved reserves of the
Company will decline as reserves are produced. As is generally the case in the
Gulf Coast region, many of the Company's producing properties are characterized
by a high initial production rate, followed by a steep decline in production. As
a result, the Company's future oil and natural gas production is highly
dependent upon its level of success in finding, acquiring, developing and
exploiting additional reserves.
ESTIMATES OF RESERVES AND FUTURE NET REVENUES
There are numerous uncertainties inherent in estimating quantities of
proved oil and gas reserves and in projecting future rates of production and the
timing and results of development expenditures. Oil and gas reserve engineering
is a subjective process of estimating underground accumulations of oil and gas
that cannot be measured in an exact way, and estimates of other engineers might
differ from those included or incorporated by reference in this Prospectus. The
accuracy of any reserve estimate is a function of the quality of available data
and of engineering and geological interpretation and judgment. Results of
drilling, testing and production subsequent to the date of an estimate may
justify revision of such estimate. Accordingly, reserve estimates are often
different from the quantities of oil and gas that are ultimately recovered,
which differences may be significant. In addition, estimates of the Company's
future net revenues from proved reserves and the present value thereof are based
on certain assumptions regarding future oil and gas prices, production levels
and operating and development costs that may not prove to be correct. Any
significant variance in these assumptions could materially affect the Company's
estimated quantity of reserves and future net revenues therefrom.
OPERATING HAZARDS AND UNINSURED RISKS
The Company's operations are subject to all of the risks normally incident
to the exploration for and the development and production of oil and gas,
including blowouts, cratering, uncontrollable flows of oil, gas or well fluids,
fires, pollution and other environmental risks. These hazards could result in
substantial losses to the Company due to injury and loss of life, severe damage
to and destruction of property and equipment, pollution and other environmental
damage and suspension of operations. In addition, offshore operations are
subject to a variety of operating risks peculiar to the marine environment, such
as hurricanes or other adverse weather conditions, to more extensive
governmental regulation, and to interruption or termination of operations by
governmental authorities based on environmental or other considerations.
Although the Company maintains insurance coverage considered to be
customary in the industry, it is not fully insured against certain of these
risks, either because such insurance is not available or because of high premium
costs. The occurrence of a significant event against which the Company is not
fully insured could have a material adverse effect on the Company's financial
position.
-4-
GOVERNMENT REGULATION AND ENVIRONMENTAL RISKS
The Company's business is subject to certain federal, state and local laws
and regulations relating to taxation, exploration for and development and
production of oil and gas and environmental and safety matters. Although the
Company believes that its operations are in compliance with applicable
environmental regulations, risks of substantial costs and liabilities are
inherent in the operations of companies in the oil and gas industry, and there
can be no assurance that such costs and liabilities will not be incurred. A
variety of federal and state laws and regulations govern the environmental
aspects of oil and gas production, transportation and processing and may, in
addition to other laws, impose liability in the event of discharges (whether or
not accidental), failure to notify the proper authorities of a discharge and
other failures to comply with those laws. The Company does not believe that its
environmental risks are materially different from those of comparable companies
in the oil and gas industry. Nevertheless, there can be no assurance that future
laws and regulations, including environmental laws and regulations, will not
adversely affect the Company's operations and financial condition.
CAPITAL INTENSIVE INDUSTRY; LIMITS ON ACCESS TO CAPITAL
The business of developing, exploring for and acquiring oil and gas
reserves is capital intensive, and the Company will require substantial amounts
of cash for planned expenditures for development and exploratory drilling
activities, acquisitions of reserves and debt service. The ability of the
Company to generate cash flow and obtain financing from third parties will be
dependent on the Company's future performance and liquidity. Substantially all
of the Company's assets are encumbered, and the Company's ability to borrow
additional funds is limited by the terms of the purchase agreements relating to
its 11% senior subordinated notes and its bank credit agreement. Pursuant to the
bank credit agreement, the Company's borrowing base is subject to
redetermination on a semi-annual basis.
HEDGING OF PRODUCTION
Part of the Company's business strategy is to reduce its exposure to the
volatility of crude oil and natural gas prices by hedging a portion of its
production. The Company's objective is to reduce the risk that a sharp price
drop will cause the Company to defer various capital spending projects. In a
typical hedge transaction, the Company will have the right to receive from the
counterparty to the hedge transaction any excess of the fixed price specified in
the hedge over a floating price based on a market index, multiplied by the
quantity hedged. If the floating price exceeds the fixed price, the Company is
required to pay the counterparty this difference multiplied by the quantity
hedged. The Company is required to pay the difference between the floating price
and the fixed price (when the floating price exceeds the fixed price) regardless
of whether the Company has sufficient production to cover the quantities
specified in the hedge. Significant reductions in production, due to unforeseen
events, at times when the floating price exceeds the fixed price could require
the Company to make payments under the hedge agreements even though such
payments are not offset by sales of production. To reduce this risk, the Company
strives to keep a percentage of its production unhedged. Hedging will also
prevent the Company from receiving the full advantage of increases in crude oil
or natural gas prices above the fixed amount specified in the hedge.
REGISTRATION RIGHTS
The Company has granted registration rights with respect to approximately
5.8 million shares of outstanding Common Stock. In addition, the Company has
outstanding warrants covering an aggregate of approximately 1.5 million shares
of Common Stock, the holders of which warrants have also been granted certain
registration rights. As of July 1, 1996, the weighted average exercise price for
these warrants was $22.49 per share of Common Stock.
NO DIVIDENDS ON COMMON STOCK
The Company has not paid any dividends on the Common Stock and does not
anticipate paying any dividends on the Common Stock for the foreseeable future.
In addition, the terms of the Company's bank credit agreement and purchase
agreements relating to its 11% senior subordinated notes also impose limitations
upon the payment of dividends.
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ANTI-TAKEOVER PROVISIONS; STOCKHOLDER RIGHTS PLAN
The Board of Directors of the Company ("Board of Directors") is authorized
to issue additional shares of preferred stock and could, without stockholder
approval, issue such preferred stock with voting, liquidation preference,
dividend and other rights superior to those of the Common Stock. The issuance of
such preferred stock could adversely affect the voting power of holders of the
Common Stock and could have the effect of delaying, deferring or preventing a
change in control of the Company or the removal of existing management. The
terms of the Company's outstanding $450 Cumulative Convertible Preferred Stock,
Series C, par value $1.00 per share (the "Convertible Preferred Stock"), with
its voting and special conversion rights, could also have a similar effect. In
addition, in 1993 the Company adopted a stockholder rights plan and shortly
thereafter distributed rights to each outstanding holder of Common Stock. See
"Description of Capital Stock -- Stockholder Rights Plan." While the Company
believes that the rights plan is designed to strengthen the Company's ability to
negotiate with potential acquirors and to protect stockholders from coercive or
abusive takeover tactics, the overall effect of the rights plan may be to delay,
defer or prevent a change in control of the Company. The Company has no specific
plans or arrangements for the issuance of any series of preferred stock other
than the issuance of the preferred stock issuable pursuant to the terms of the
Company's stockholder rights plan.
-6-
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of any
Shares offered pursuant to this Prospectus, all of which will be sold by the
Selling Stockholder.
SELLING STOCKHOLDER
The following table sets forth certain information, as of the date hereof,
with respect to the number of Shares beneficially owned and being offered hereby
by the Selling Stockholder. The Shares are being registered to permit public
secondary trading of the Shares, and the Selling Stockholder may offer the
Shares for resale from time to time.
See "Plan of Distribution."
The Selling Stockholder represented to the Company at the time of
acquiring the Shares held by it that it was acquiring such Shares for investment
purposes only. The Company granted the Selling Stockholder certain registration
rights covering the resale of the Shares. See "Description of Capital
Stock--Registration Rights and Listing." The Company is filing under the
Securities Act with the Commission a Registration Statement on Form S-3, of
which this Prospectus forms a part, with respect to the resale of the Shares
from time to time. See "Plan of Distribution."
BENEFICIAL OWNERSHIP
PRIOR TO OFFERING
- ---------------------------------------------------------- NUMBER OF
SHARES
NAME OF NUMBER OF BEING
SELLING STOCKHOLDER SHARES PERCENT OFFERED
- ------------------- --------- ------- ---------
Apache Corporation 150,000 1.3 150,000
PLAN OF DISTRIBUTION
GENERAL
Sales of Shares by the Selling Stockholder may be made from time to time
in one or more transactions, including block transactions, on the American Stock
Exchange or any other exchange or quotation system on which the Common Stock may
be listed or quoted pursuant to and in accordance with the applicable rules of
the Exchanges, in negotiated transactions or in a combination of any such
methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Shares may be offered directly, to or
through agents designated from time to time or to or through brokers or dealers,
or through any combination of these methods of sale. Such agents, brokers or
dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholder and/or the purchasers of the Shares for
whom such broker-dealers may act as agents or to whom they sell as principals,
or both (which compensation as to a particular broker-dealer might be in excess
of customary commissions). A member firm of an Exchange may be engaged to act as
an agent in the sale of Shares by the Selling Stockholder. To the extent
required, specific additional information regarding the Shares will be set forth
in a Prospectus Supplement.
The Selling Stockholder and any brokers, dealers, agents or others that
participate with the Selling Stockholder in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities
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Act, and any commissions or fees received by such persons and any profit on the
resale of the Shares purchased by such persons may be deemed to be underwriting
commissions or discounts under the Securities Act.
Agents, brokers and dealers may be entitled under agreements entered into
by the Selling Stockholder and/or the Company to indemnification against certain
civil liabilities, including liabilities under the Securities Act.
There is no assurance that the Selling Stockholder will sell any or all of
the Shares offered hereby.
ORIGINAL ISSUANCE OF THE SHARES
The Shares were sold to the Selling Stockholder in a private placement
effected in August 1994. Under the terms of the agreement pursuant to which the
Shares were sold, the Company agreed to register the Shares under the Securities
Act in certain circumstances and to indemnify and hold the Selling Stockholder
and certain related persons harmless against certain liabilities under the
Securities Act that could arise in connection with the sale by the Selling
Stockholder of the Shares. The Company has agreed to pay all reasonable fees and
expenses incident to the filing of this Registration Statement, but not selling
commissions or discounts.
DESCRIPTION OF CAPITAL STOCK
PREFERRED STOCK
The Company's Restated Certificate of Incorporation (the "Restated
Certificate") authorizes the Company to issue, without any action on the part of
its stockholders, an aggregate of 100,000 shares of preferred stock, par value
$1.00 per share. The Board of Directors has authority to divide such preferred
stock into one or more series and has broad authority to fix and determine the
relative rights and preferences, including the voting rights, of the shares of
each such series. As of July 1, 1996, an aggregate of 85,000 shares of preferred
stock of the Company had been reserved for issuance upon exercise of the Rights
described below under " -- Stockholder Rights Plan," and the Company's
Convertible Preferred Stock represents an additional 4,000 shares of preferred
stock.
COMMON STOCK
As of July 1, 1996, the Company was authorized to issue 50,000,000 shares
of Common Stock. As of July 1, 1996, an aggregate of 11,807,741 shares were
outstanding and an aggregate of 4,642,686 shares were reserved for issuance upon
exercise of outstanding options and warrants and upon conversion (including
conversion pursuant to special conversion rights) of the Convertible Preferred
Stock. All shares of Common Stock have equal rights to participate in dividends
and, in the event of liquidation, assets, subject to all preferences established
with respect to the Company's preferred stock. Each holder of Common Stock is
entitled to one vote for each share held on all matters submitted to a vote of
stockholders. The Common Stock does not have cumulative voting rights. Shares of
Common Stock carry no conversion, preemptive or subscription rights and are not
subject to redemption. All outstanding shares of Common Stock are fully paid and
nonassessable. The Company currently pays no dividends on Common Stock but is
authorized to pay such dividends when, as and if declared by the Board of
Directors. Dividends may be declared in the discretion of the Board of Directors
from funds legally available therefor, subject to restrictions in the Company's
bank credit agreement and the agreements relating to its 11% senior subordinated
notes.
The transfer agent and registrar of the Common Stock offered herein is
Keycorp Shareholder Services, 1201 Elm Street, Dallas, Texas 75270.
STOCKHOLDER RIGHTS PLAN
GENERAL. In September 1993, the Board of Directors declared a distribution
of one right ("Right") for each outstanding share of Common Stock outstanding to
stockholders of record at the close of business on October 8, 1993 and for each
share of Common Stock issued by the Company (including shares issued upon
conversion of the
-8-
Convertible Preferred Stock) thereafter and prior to the Distribution Date (as
described below). Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share (a "Unit") of Series B Preferred Stock,
par value $1.00 per share (the "Series B Preferred Stock"), at a purchase price
of $7.50 per Unit, subject to adjustment (the "Purchase Price"). The following
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement between the
Company and Society National Bank dated September 28, 1993 (the "Rights
Agreement"), as supplemented by the Amendment to Rights Agreement dated August
3, 1994, copies of which have been filed with the Commission as exhibits to the
Company's Current Reports on Form 8-K dated September 28, 1993, and August 31,
1994, respectively.
THE RIGHTS AGREEMENT. Initially, a Right will attach to each certificate
representing a share of outstanding Common Stock, and no separate certificates
for the Rights ("Rights Certificates") will be distributed. Each Right will
separate from the Common Stock and a "Distribution Date" will occur upon the
earlier of (i) ten business days following a public announcement that a Person
(as such term is defined in the Rights Agreement) or group of affiliated or
associated persons (other than the Company, any subsidiary of the Company or any
employee benefit plan of the Company or such subsidiary or certain former
investors in certain of the Company's institutional oil and gas programs by
virtue of their exchange of interests in such programs for Common Stock) (an
"Acquiring Person") has acquired, obtained the right to acquire, or otherwise
obtained beneficial ownership of 15% or more of the then outstanding shares of
Common Stock (the date of the announcement being the "Stock Acquisition Date"),
and (ii) ten business days (or such later date as may be determined by action of
the Board of Directors before any person becomes an Acquiring Person) following
the commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 30% or more of the then outstanding shares
of Common Stock.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the tenth anniversary of the Rights Agreement unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights.
In the event that (i) the Company is the surviving corporation in a merger
with an Acquiring Person and shares of Common Stock remain outstanding, (ii) a
Person becomes the beneficial owner of 15% or more of the then outstanding
shares of Common Stock, (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement or (iv) during
such time as there is an Acquiring Person, an event occurs that results in such
Acquiring Person's ownership interest being increased by more than 1% (e.g., by
means of a reverse stock split or recapitalization), then, in each such case,
each holder of a Right will thereafter have the right to receive, upon exercise,
Units of Series B Preferred Stock (or, in certain circumstances, Common Stock,
cash, property or other securities of the Company) having a value equal to two
times the amount payable upon exercise of the Right. The amount payable upon
exercise is the then current Purchase Price multiplied by the number of Units of
Series B Preferred Stock issuable upon exercise of a Right immediately prior to
the events described in this paragraph. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or were (under certain circumstances specified in the Rights
Agreement), beneficially owned by any Acquiring Person will be null and void.
In the event that at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
and the Company is not the surviving corporation (other than a merger described
in the preceding paragraph), (ii) any Person consolidates or merges with the
Company and all or part of the Common Stock is converted or exchanged for
securities, cash or property of any other Person or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights that previously have been voided as described above) will
thereafter have the right to receive, upon exercise, common stock of the
Acquiring Person having a value equal to two times the amount payable upon
exercise of the Right.
The amount payable, and the number of Units of Series B Preferred Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution upon the occurrence of certain events.
-9-
At any time until ten business days following the Stock Acquisition Date,
a majority of the Independent Directors (as such term is defined in the Rights
Agreement) may redeem the Rights in whole, but not in part, at a price of $.10
per Right, subject to adjustment upon the occurrence of certain events (the
"Redemption Price"), payable, at the election of such majority of the
Independent Directors, in cash or shares of Common Stock. Immediately upon the
action of a majority of Independent Directors ordering the redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. Holders of Common Stock or of Convertible
Preferred Stock may, depending upon the circumstances, recognize taxable income
in the event that the Rights become exercisable for Units of Series B Preferred
Stock (or other consideration).
DESCRIPTION OF THE SERIES B PREFERRED STOCK. The Units of Series B
Preferred Stock that may be acquired upon exercise of the Rights will be
nonredeemable and subordinate to any other shares of preferred stock that may be
issued by the Company. Each Unit of Series B Preferred Stock will have a minimum
preferential quarterly dividend of $0.01 per Unit or any higher per share
dividend declared on the Common Stock.
The holder of each Unit of Series B Preferred Stock will be entitled to
one vote for each Unit held, voting together with the Common Stock. The holders
of Units of Series B Preferred Stock, voting as a separate class, will be
entitled to elect two directors if dividends on the Series B Preferred Stock are
in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each Unit of Series B Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Common Stock. In the event of liquidation, the holder of a Unit of Series B
Preferred Stock will receive a preferred liquidation payment equal to the
greater of $0.10 per Unit plus accrued and unpaid dividends and the per share
amount paid in respect of a share of Common Stock. Certain rights of the holders
of the Preferred Stock, including voting rights, rights upon liquidation and
rights upon merger, consolidation or other transactions in which shares of
Common Stock are exchanged, are subject to adjustment upon the occurrence of
certain events.
PROVISIONS OF THE COMPANY'S BYLAWS
Certain provisions of the Company's Bylaws establish time periods during
which appropriate stockholder proposals must be delivered to the Company for
consideration at special and annual meetings called by the Company. The Bylaws
provide, among other things, that (i) only the Board of Directors may call
special meetings of stockholders, (ii) stockholders making nominations for the
Board of Directors at, or bringing other business before, an annual meeting of
stockholders must provide timely written notice to the Company thereof (timely
notice being required to be no later than 60 days before the first anniversary
of the preceding year's annual meeting or, in the event the date of an annual
meeting is advanced by more than 30 days, or delayed by more than 60 days, from
such anniversary date, no later than 60 days before the date of such annual
meeting or ten days following the day on which the date of such meeting is
publicly announced) and (iii) stockholders making nominations for the Board of
Directors at a special meeting of stockholders must provide timely written
notice to the Company thereof (timely notice being required to be no later than
60 days before such special meeting or ten days following the day on which the
date of such special meeting is publicly announced).
WARRANTS
As of July 1, 1996, there were warrants outstanding to purchase an
aggregate of up to approximately 1.5 million shares of Common Stock. In December
1991, the Company issued warrants to certain institutional investors
contemporaneously with the issuance of its 11% senior subordinated notes (the
"Institutional Warrants"). The Institutional Warrants granted the right to
purchase approximately 1.2 million shares (as adjusted for subsequent events) of
Common Stock at an exercise price of $22.37 per share, subject to adjustment, on
or before December 30, 2001. In connection with an acquisition of Common Stock
in September 1992, The Prudential Insurance Company of America ("Prudential")
acquired warrants to purchase approximately 0.3 million shares (as adjusted) of
Common Stock at an
-10-
exercise price of $22.95 per share, subject to adjustment, on or before April
30, 1999 (the "Prudential Warrants" and, collectively with the Institutional
Warrants, the "Warrants").
The Warrants contain certain provisions for adjustment of exercise prices
in certain events, including sales of Common Stock at less than the exercise
price or fair market value thereof, stock dividends, stock splits,
reorganizations, reclassifications and mergers.
Holders of the Warrants are also entitled to certain registration rights
with respect to Common Stock issued upon the exercise thereof.
The Company may at its option redeem (i) any or all of the outstanding
Institutional Warrants for cash on or after December 30, 1996 at $22.37 per
share of Common Stock issuable upon the exercise of such warrants, subject to
adjustment, and (ii) all of the outstanding Prudential Warrants at any time
after October 1, 1994 at the exercise price in effect on the date of redemption,
provided in each case that the Common Stock has traded at specified prices above
the then current exercise price for a specified period.
LIMITATION ON DIRECTORS' LIABILITY
Delaware law authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. The Restated
Certificate limits the liability of directors of the Company to the Company or
its stockholders (in their capacity as directors but not in their capacity as
officers) to the fullest extent permitted by Delaware law. Specifically,
directors of the Company will not be personally liable for monetary damages for
breach of a director's fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law ("DGCL") or (iv) for any
transaction from which the director derived an improper personal benefit.
The inclusion of this provision in the Restated Certificate may have the
effect of reducing the likelihood of derivative litigation against directors and
may discourage or deter stockholders or management from bringing a lawsuit
against directors for breach of their duty of care, even though such an action,
if successful, might otherwise have benefited the Company and its stockholders.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is a Delaware corporation and is subject to Section 203 of the
DGCL. Generally, Section 203 prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) prior to such date, either the
business combination or such transaction is approved by the board of directors
of the corporation, (ii) upon consummation of the transaction that resulted in
the stockholder becoming an interested stockholder, the interested stockholder
owns at least 85% of the outstanding voting stock or (iii) on or after such date
the business combination is approved by the board and by the affirmative vote of
at least 662/3% of the outstanding voting stock that is not owned by the
interested stockholder. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the interested
stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
the corporation's outstanding voting stock.
LIMITATION ON CHANGES IN CONTROL
The Rights and Rights Agreement, certain provisions of the Company's
Bylaws and the provisions of Section 203 of the DGCL could have the effect of
delaying, deferring or preventing a change in control of the Company. This could
be the case notwithstanding that a majority of the stockholders might benefit
from such a change in control or offer.
-11-
LEGAL MATTERS
Certain legal matters in connection with the Shares have been passed upon
for the Company by Baker & Botts, L.L.P., Houston, Texas.
EXPERTS
The audited consolidated financial statements and schedules incorporated
by reference in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said report.
-12-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (1)
AMOUNT
------
Filing fee, Securities and Exchange Commission.......$
Fees and expenses of accountants.....................$
Fees and expenses of counsel.........................$
Printing and engraving expenses......................$
Blue sky fees and expenses...........................$
Miscellaneous........................................$
Total..........................................$
- ------------
(1) The amounts set forth above, except for the filing fees for the
Securities and Exchange Commission and for the American Stock
Exchange listing fee, are in each case estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the DGCL gives corporations the power to indemnify officers
and directors under certain circumstances. The Registrant's Bylaws contain
provisions that provide for indemnification of certain persons (including
officers and directors).
Article IV of the Bylaws of the Registrant contains the following
provisions:
"Section 1. INDEMNIFICATION GENERALLY. Subject to the provisions of
Section 3 of this Article IV, the Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee, or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner that he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
"Section 2. INDEMNIFICATION FOR EXPENSES ONLY. Subject to the provisions
of Section 3 of this Article IV, the Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with such action or suit, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Corporation and except that no indemnification shall be made in respect to
any claim, issue, or matter as to which such person shall have been adjudged to
be liable to the Corporation unless and only to the extent that the Delaware
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all of the circumstances of the case,
II-1
such person is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Court of Chancery or such other court shall deem proper.
"Section 3. DETERMINATION. Any indemnification under Sections 1 and 2 of
this Article IV (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper in the
circumstances because he had met the applicable standard of conduct set forth in
said Sections 1 and 2. Such determination shall be made (a) by the Board, by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit, or proceeding, or (b) if such quorum is not obtainable, or even if
obtainable and a quorum of disinterested directors so directs, by independent
legal counsel (who may be counsel to the Corporation) in a written opinion, or
(c) by the stockholders.
"Section 4. SUCCESSFUL SUIT. If a director, officer, employee, or agent of
the Corporation has been successful on the merits or otherwise as a party to any
action, suit, or proceeding, referred to in Sections 1 and 2 of this Article IV,
or with respect to any claim, issue or matter therein (to the extent that a
portion of his expenses can be reasonably allocated thereto), he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
"Section 5. ADVANCE PAYMENT. Expenses incurred in connection with a civil,
criminal, administrative, or investigative action, suit, or proceeding, or
threat thereof, shall be paid by the Corporation in advance of the final
disposition of such action, suit, or proceeding upon receipt of an undertaking
by or on behalf of the director, officer, employee, or agent to repay such
amount, unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article IV.
"Section 6. INSURANCE. By action of the Board, notwithstanding any
interest of the directors in the action, to the full extent permitted by
applicable law, the Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation, as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article IV or of Section 145 of the
General Corporation Law of the State of Delaware.
"Section 7. DEFINITIONS. For purposes of this Article IV, references to
the "Corporation" shall include, in addition to the Corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger that, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
and agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, or other enterprise, shall
stand in the same position under the provisions of this Article IV with respect
to the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued. For purposes of
this Article IV, references to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to any employee benefit plan; and references to "serving
at the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article IV.
"Section 8. OTHER RIGHTS. The indemnification provided pursuant to the
provisions of this Article IV shall not be deemed exclusive of any other rights
that those seeking indemnification may be entitled to under any other Bylaw,
agreement, contract of insurance, statute, vote of stockholders, or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent of the Corporation, or has ceased to be a director,
officer, employee, or agent of another corporation, partnership, joint venture,
or other enterprise wherein such person was serving at the request of the
Corporation, and shall inure to the benefit of the heirs, executors and
administrators of such person.
II-2
"Section 9. AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article IV shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification."
In addition to the above recited provisions of the Registrant's Bylaws,
the Registrant's stockholders, pursuant to Section 102(b)(7) of the DGCL,
adopted a new Article SIXTH of the Registrant's Restated Certificate of
Incorporation which has the effect of limiting or eliminating the potential
monetary liability of the directors to the Registrant or its stockholders for
breaches of a director's fiduciary duty of care. The text of Article SIXTH
adopted pursuant to the aforementioned Section 102(b)(7) by the stockholders of
the Registrant on September 8, 1986 is set out in full below:
"SIXTH: No director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a Director, provided that this provision shall
not limit the liability of a Director (a) for any breach of the
Director's duty of loyalty to the Corporation or its stockholders,
(b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under
Section 174 of the Delaware Corporation Law, or (d) for any
transaction from which the Director derived an improper personal
benefit. This Article does not limit the liability of a Director for
any act or omission occurring prior to the date when this Article
becomes effective."
In addition, the Registrant maintains two primary and two excess insurance
policies, which collectively provide insurance coverage in the amount of $10.0
million. The first primary and excess policies insure the Registrant's directors
and officers against liability for their acts in such capacities collectively up
to an aggregate of $6.0 million, subject to specified exclusions, including an
exclusion with respect to liabilities arising out of the Registrant's acting as
a general partner or joint venturer. The second primary and excess policies
insure the Registrant and its directors, subject to specified deductibles and
exclusions, against liability for their acts in connection with the Registrant
acting as a general partner up to an aggregate of $4.0 million. Both of the
primary policies are subject to common acts tie-in endorsements.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
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ITEM 16. EXHIBITS
4.1* -- Restated Certificate of Incorporation of American Exploration
Company, as supplemented by Certificate of Amendment to Restated
Certificate of Incorporation, effective June 13, 1995 (Form 10-K,
December 31, 1995, Exhibit 3(a))
4.2* -- Amended and Restated Bylaws of American Exploration Company
(Form 10-K, December 31, 1995, Exhibit 3(b))
5 -- Opinion of Baker & Botts, L.L.P.
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Baker & Botts, L.L.P. (contained in Exhibit 5)
24 -- Powers of Attorney
- -------------
* Incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement :
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement,
PROVIDED, HOWEVER, that clauses (a)(1)(i) and (a)(1)(ii) of this paragraph do
not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or
II-4
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON THE 3rd DAY OF JULY,
1996.
AMERICAN EXPLORATION COMPANY
By: /s/ MARK ANDREWS
Mark Andrews
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ MARK ANDREWS Chairman of the Board and July 3, 1996
(Mark Andrews) Chief Executive Officer
(Principal Executive Officer)
/s/ JOHN M. HOGAN Senior Vice President and July 3, 1996
(John M. Hogan) Chief Financial Officer
(Principal Financial and
Accounting Officer)
HARRY W. COLMERY, JR.* Director July 3, 1996
(Harry W. Colmery, Jr.)
IRVIN K. CULPEPPER, JR.* Director July 3, 1996
(Irvin K. Culpepper, Jr.)
WALTER J.P. CURLEY* Director July 3, 1996
(Walter J. P. Curley)
PHILLIP FROST, M.D.* Director July 3, 1996
(Phillip Frost, M.D.)
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PETER G. GERRY* Director July 3, 1996
(Peter G. Gerry)
_________________________ Director July __, 1996
(H. Phipps Hoffstot, III)
JOHN H. MOORE* Director July 3, 1996
(John H. Moore)
_________________________ Director July __, 1996
(Peter P. Nitze)
*By: /s/ JOHN M. HOGAN July 3, 1996
Jonn M. Hogan, Attorney-in-Fact
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