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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934
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TITAN EXPLORATION, INC.
(Exact name of registrant as specified in is charter)
Delaware 75-2671582
(State of incorporation) (I.R.S. employer identification number)
500 West Texas, Suite 200
Midland, Texas 79701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(915) 498-8600
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box.[_]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box.[_]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Preferred Stock Purchase Rights
(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
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On June 10, 1999, the Board of Directors of Titan Exploration, Inc. (the
"Company") authorized and declared a dividend of one Right (a "Right") for each
outstanding share of Common Stock, par value $.01 per share ("Common Stock"), of
the Company (the "Common Shares"). The dividend is payable on July 1, 1999 (the
"Record Date") to the holders of record of the Common Shares at the close of
business on that date. In addition, the Company has authorized the issuance of
one Right with respect to each share of Common Stock that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined). When exercisable each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company (the
"Preferred Shares"), at a price of $30.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and First Union National Bank, as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15 percent or more of the
outstanding Common Shares and (ii) 10 business days (or such later date as may
be determined by action of the Board of Directors of the Company prior to such
time as any person or group of affiliated or associated persons becomes an
Acquiring Person) following the commencement of, or first public announcement of
an intention to commence, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
affiliated or associated persons of 15 percent or more of the outstanding Common
Shares (the earlier of such dates being herein referred to as the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share certificate
with a copy of a Summary of Rights to Purchase Preferred Shares ("Summary of
Rights"), in substantially the form attached to the Rights Agreement as Exhibit
C, attached thereto.
The Rights Agreement excludes Natural Gas Partners, L.P., Natural Gas
Partners II, L.P. and NGP Louisiana Partners, L.P. and their respective
affiliates and associates (collectively, the "Excluded Parties") from causing
the Rights to become exercisable until such time as the Excluded Parties
collectively own 35% or more of Titan's outstanding stock. The Excluded Parties
presently own an aggregate of approximately 30% of Titan's common stock. the
exception for the Excluded Parties shall terminate once the Excluded Parties are
the Beneficial Owners of an aggregate of less than 15 percent of the shares of
Common Stock of the Company.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Shares. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Share certificates issued after the
Record Date, upon transfer or new issuance of Common Shares, will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding on or
after the Record Date, even without such notation or a copy of the Summary of
Rights being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. 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 Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on June 9, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
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The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
subject to redemption by the Company. Each Preferred Share will be entitled to
a minimum preferential quarterly dividend payment of $.01 per share but will be
entitled to an aggregate dividend of 100 multiplied times the dividend declared
per Common Share. In the event of liquidation, the holder of the Preferred
Shares will be entitled to a minimum preferential liquidation payment of $1.00
per share but will be entitled to an aggregate payment of 100 multiplied times
the payment made per Common Share. Each Preferred Share will have 100 votes,
voting together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 multiplied times the amount
received per Common Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50 percent or more of its consolidated assets or
earning power are sold after a person or group of affiliated or associated
persons has become an Acquiring Person, proper provision will be made so that
each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be null and void and nontransferable), will thereafter
have the right to receive upon exercise that number of Common Shares of the
Company having a market value of two times the exercise price of the Right.
At any time after any person or group of affiliated or associated persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50 percent or more of the outstanding Common Shares, the Board of Directors
of the Company may exchange the Rights (other than Rights owned by such person
or group which will have become null and void and
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nontransferable), in whole or in part, at an exchange ratio of one Common Share,
or one one-hundredth of a Preferred Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in such Purchase Price. The Company may, but shall not be required to,
issue fractions of a Preferred Share (other than one one-hundredth of a
Preferred Share or any integral multiple thereof, which may, at the election of
the Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.
At any time prior to the close of business on the tenth day following a
public announcement that an Acquiring Person has become such an Acquiring
Person, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.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. The time at which the Rights are redeemed by the Company is herein
referred to as the "Redemption Date." Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights will be to receive the Redemption Price.
At any time prior to the Distribution Date and subject to the last sentence
of this paragraph, the terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including without limitation an amendment to lower certain thresholds described
above to not less than the greater of (i) the sum of 0.001 percent and the
largest percentage of the outstanding Common Shares then known by the Company to
be beneficially owned by any person or group of affiliated or associated persons
and (ii) 10 percent. From and after the Distribution Date and subject to
applicable law, the terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of Rights Certificates to,
among other things, make any other provisions in regard to matters under the
Rights Agreement that the Company may deem necessary or desirable and that shall
not adversely affect the interests of the holders of the Rights or Right
Certificates (other than an Acquiring Person or an affiliate or associate of an
Acquiring Person). The terms of the Rights may not be amended to (i) reduce the
Redemption Price (except as required by antidilution provisions) or (ii) provide
for an earlier Final Expiration Date.
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.
The Preferred Shares shall rank, with respect to the payment of dividends
and as to distributions of assets upon liquidation, dissolution or winding up of
the Company, junior to all other series of preferred stock of the Company,
unless the Board of Directors of the Company shall specifically determine
otherwise in fixing the powers, preferences and relative, participating,
optional and other special rights of the shares of any such other series and the
qualifications, limitations and restrictions thereof.
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As of May 28, 1999, there were 37,934,675 Common Shares issued and
outstanding, and an aggregate of an additional 6,510,000 Common Shares reserved
for issuance under the Company's employee stock option plans. One Right will be
distributed to holders of the Common Stock for each Common Share owned of record
by them on July 1, 1999. One Right will be issued with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date. In
certain circumstances, the Company may issue Rights with respect to Common
Shares issued following the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date. The Company's Board of Directors
has initially reserved for issuance upon exercise of the Rights 515,000
Preferred Shares, which number is subject to adjustment from time to time in
accordance with the Rights Agreement.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner or on terms not approved by the Board of Directors. The Rights,
however, should not deter any prospective offeror willing to negotiate in good
faith with the Board of Directors, nor should the Rights interfere with any
merger or business combination approved by the Board of Directors of the Company
prior to an Acquiring Person's acquiring 15 percent or more of the Common
Shares.
A copy of the Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights is filed as an exhibit to this Registration
Statement and incorporated herein by reference. The foregoing description of
the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement.
The Company has in place certain additional measures that could also be
considered to have anti-takeover effects. The Company's Certificate of
Incorporation (i) provides for cumulative voting for the election of directors;
(ii) authorizes the Board of Directors of the Company to issue up to 10,000,000
shares of preferred stock without stockholder approval and to set the rights,
preferences and other designations, including voting rights, of those shares as
the Board of Directors may determine; (iii) requires unanimous written consent
of all the holders of record of all the outstanding shares in order for the
stockholders to act without a meeting; (iv) requires advance notice of nominees
to the Company's board of directors; and (v) requires the approval of the
holders of at least eighty percent (80%) of the combined voting power of the
then outstanding voting stock for the amendment of certain corporate governance
provisions. In addition, the Company is authorized to issue up to 60,000,000
shares of Common Stock. These provisions, alone or in combination with each
other, may discourage transactions involving actual or potential changes of
control of the Company, including transactions that otherwise could involve
payment of a premium over prevailing market prices to holders of Common Stock.
The Company is also subject to provisions of the Delaware General
Corporation Law that may make some business combinations more difficult.
Section 203 of the Delaware General Corporation Law prohibits the Company from
engaging in a "business combination" (as defined in Section 203) with an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) for three years following the date that
person becomes an interested stockholder, unless (a) before that person became
an interested stockholder, the Company's Board of Directors approved the
transaction in which the interested stockholder became an interested stockholder
or approved the business combination; (b) upon completion of the
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transaction that resulted in the interested stockholder's becoming an interested
stockholder, the interested stockholder owns at least 85% of the voting stock
outstanding at the time the transaction commenced (excluding stock held by
directors who are also officers of the Company and by employee stock plans that
do not provide employees with the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange offer)
or (c) following the transaction in which that person became an interested
stockholder, the business combination is approved by the Company's Board of
Directors and authorized at a meeting of stockholders by the affirmative vote of
the holders of at least two-thirds of the outstanding voting stock not owned by
the interested stockholder.
Under Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of one of certain extraordinary transactions involving the Company
and a person who was not an interested stockholder during the previous three
years or who became an interested stockholder with the approval of a majority of
the Company's directors, if that extraordinary transaction is approved or not
opposed by a majority of the directors who were directors before any person
became an interested stockholder in the previous three years or who were
recommended for election or elected to succeed such directors by a majority of
such directors then in office.
Item 2. Exhibits.
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4. Rights Agreement, dated as of June 10, 1999, between Titan
Exploration, Inc. and First Union National Bank, which includes as
Exhibit B the Form of Right Certificate.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized.
TITAN EXPLORATION, INC.
Date: June 10, 1999 By: /s/ Jack D. Hightower
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Jack D. Hightower,
Chairman, President and Chief Executive Officer
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