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 (or Date of Earliest Event Reported): April 1, 1997
CAIRN ENERGY USA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-10156 23-2169839
- -------------------------------- ------------------------ --------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
8115 Preston Road, Suite 500
Dallas, Texas 75225
- ---------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 369-0316
CORPDAL:63397.2 15467-00006
1
ITEM 5. OTHER EVENTS.
I. Rights Plan
On March 27, 1997, the Board of Directors of CAIRN ENERGY USA, INC.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.01 per share,
of the Company (the "Common Stock"). The dividend is payable on April 11, 1997
(the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, par value $.01 per
share, of the Company (the "Preferred Stock") at a price of $40 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of April 1, 1997, as the same may be amended from time to
time (the "Rights Agreement"), between the Company and STOCK TRANSFER COMPANY OF
AMERICA, INC., as Rights Agent (the "Rights Agent").
Detachment of Rights: Exercise. Until the earlier to occur of (i) 10
days following a public announcement that a person or group of affiliated or
associated persons (with certain exceptions, an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding shares of Common Stock or
(ii) 10 business days (or such later date as may be determined by action of the
Board of Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a copy of this
Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier expiration of the Rights), the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier expiration of the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights, will also constitute the transfer
of the Rights associated with the shares of Common Stock represented by such
certificates. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
CORPDAL:63397.2 15467-00006
2
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 31, 2007 (the "Final Expiration Date"), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right that number
of shares of Common Stock having a market value of two times the exercise price
of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive upon the exercise of a Right that number of
shares of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent) that at the time of such transaction have
a market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring Person of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which will have become
void), in whole or in part, for shares of Common Stock or Preferred Stock (or a
series of the Company's preferred stock having equivalent rights, preferences
and privileges), at an exchange ratio of one share of Common Stock, or a
fractional share of Preferred Stock (or other preferred stock) equivalent in
value thereto, per Right.
Preferred Shares. Shares of Preferred Stock purchasable upon exercise
of the Rights will not be redeemable. Each share of Preferred Stock will be
entitled, when, as and if declared, to a dividend payment per share equal to an
aggregate dividend of 1000 times the dividend declared per share of Common
Stock. In the event of liquidation, dissolution or winding up of the Company,
the holders of the Preferred Stock will be entitled to a minimum preferential
payment of $1.00 per share (plus any accrued but unpaid dividends) but will be
entitled to an aggregate payment of 1000 times the payment made per share of
Common Stock. Each share of Preferred Stock will have 1000 votes, voting
together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which outstanding shares of Common Stock
are converted or exchanged, each share of Preferred Stock will be entitled to
receive 1000 times the amount received per share of Common Stock. These Rights
are protected by customary antidilution provisions.
CORPDAL:63397.2 15467-00006
3
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximately the
value of one share of Common Stock.
The offer and sale of the Preferred Shares or Common Shares issuable
upon exercise of the Rights will be registered pursuant to the Securities Act of
1933, as amended; such registration will not become effective until the Rights
become exercisable.
Antidilution and Other Adjustments. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
Redemption of Rights. At any time prior to the earlier of (i) the
Distribution Date or (ii) the Final Expiration Date, the Board of Directors of
the Company may redeem all but not less than all of the then outstanding Rights
at a price of $0.01 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. At
the effective time of such redemption, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
No Rights as Stockholder. 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.
Amendment of Rights. For so long as the Rights are then redeemable, the
Company may, except with respect to the redemption price, amend the Rights
Agreement in any manner. After the Rights are no longer redeemable, the Company
may, except with respect to the redemption price, amend the Rights Agreement in
any manner that does not adversely affect the interests of holders of the
Rights.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement filed
herewith as Exhibit 4.1, which is hereby incorporated by reference.
CORPDAL:63397.2 15467-00006
4
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits
(4) Instruments defining rights of security
holders, including indentures:
4.1 Rights Agreement dated as of April
1, 1997 between Cairn Energy USA,
Inc. and Stock Transfer Company of
America, Inc., which includes the
form of Certificate of Designations
for Designating Series A Junior
Participating Preferred Stock, $.01
par value, as Exhibit A, the form of
Right Certificate as Exhibit B and
the Summary of Rights to Purchase
Series A Junior Participating
Preferred Stock as Exhibit C.
4.2 Form of Certificate of Designation
for Designating Series A Junior
Participating Preferred Stock, $.01
par value (included as Exhibit A to
Rights Agreement filed as Exhibit
4.1 hereto).
4.3 Form of Right Certificate (included
as Exhibit B to Rights Agreement
filed as Exhibit 4.1 hereto).
Pursuant to the Rights Agreement,
printed Right Certificates will not
be mailed until as soon as
practicable after the Distribution
Date.
4.4 Form of Summary of Rights to
Purchase Series A Junior
Participating Preferred Stock
(included as Exhibit C to Rights
Agreement filed as Exhibit 4.1
hereto) which together with
certificates representing the
outstanding Common Shares of the
Company shall represent the Rights
until the Distribution Date.
4.5 Specimen of legend to be placed
pursuant to Section 3(c) of the
Rights Agreement, on all new Common
Share certificates issued after
April 11, 1997 and prior to the
Distribution Date upon transfer,
exchange or new issuance (included
in Section 3(c) of the Rights
Agreement incorporated by reference
herein as Exhibit 4.1).
CORPDAL:63397.2 15467-00006
5
SIGNATURE
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, thereunto duly authorized.
Dated: April 2, 1997
Cairn Energy USA, Inc.
By:/s/Michael R. Gilbert
---------------------
Name: Michael R. Gilbert
Title: President
CORPDAL:63397.2 15467-00006
6
EXHIBIT INDEX
Sequentially
Exhibit Numbered
No. Exhibit Description Page
(4) Instruments defining the rights
of security holders, including
indentures:
4.1 Rights Agreement dated as of April
1, 1997 between Cairn Energy USA,
Inc. and Stock Transfer Company of
America, Inc., which includes the
form of Certificate of Designations
for Designating Series A Junior
Participating Preferred Stock, $.01
par value, as Exhibit A, the form of
Right Certificate as Exhibit B and
the Summary of Rights to Purchase
Series A Junior Participating
Preferred Stock as Exhibit C.
4.2 Form of Certificate of Designation
for Designating Series A Junior
Participating Preferred Stock, $.01
par value (included as Exhibit A to
Rights Agreement filed as Exhibit
4.1 hereto).
4.3 Form of Right Certificate (included
as Exhibit B to Rights Agreement
filed as Exhibit 4.1 hereto).
Pursuant to the Rights Agreement,
printed Right Certificates will not
be mailed until as soon as
practicable after the Distribution
Date.
4.4 Form of Summary of Rights to
Purchase Series A Junior
Participating Preferred Stock
(included as Exhibit C to Rights
Agreement filed as Exhibit 4.1
hereto) which together with
certificates representing the
outstanding Common Shares of the
Company shall represent the Rights
until the Distribution Date.
4.5 Specimen of legend to be placed
pursuant to Section 3(c) of the
Rights Agreement, on all new Common
Share certificates issued after
April 11, 1997 and prior to the
Distribution Date upon transfer,
exchange or new issuance (included
in Section 3(c) of the Rights
Agreement incorporated by reference
herein as Exhibit 4.1).
CORPDAL:63397.2 15467-00006
7