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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______to ________.
Commission file number 0-22576
COHO ENERGY, INC.
(Exact name of registrant as specified in its charter)
Texas 75-2488635
- ------------------------ ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
14785 Preston Road, Suite 860
Dallas, Texas 75240
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 774-8300
--------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of March 23, 2001, 18,714,175 shares of the registrant's Common Stock were
outstanding and the aggregate market value of all voting stock held by
non-affiliates was $10.7 million based upon the closing price on Nasdaq's OTC
Bulletin Board on such date. The officers and directors of the registrant are
considered affiliates for purposes of this calculation.
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AMENDMENT TO FORM 10-K
EXPLANATORY NOTE
This Amendment is being filed to add a "Risk Factors" section to Part I,
Items 1 and 2. "Business and Properties" and to provide the disclosure required
by Part III of Form 10-K.
PART I
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
RISK FACTORS
OUR LEVEL OF DEBT MAY NOT ALLOW US TO PROPERLY PLAN FOR FUTURE OPPORTUNITIES OR
TO COMPETE EFFECTIVELY.
After the consummation of our plan of reorganization, we have a significant
amount of indebtedness. Our total consolidated indebtedness as of December 31,
2000 was $282.4 million and the ratio of total consolidated indebtedness to
total capitalization was 82%. Our high level of indebtedness will have several
important effects on our future operations, including:
o requiring us to devote a substantial portion of our cash flow from
operations to pay interest on our indebtedness and not for other uses, such
as funding working capital or capital expenditures;
o limiting our ability to obtain additional financing in the future for
working capital, capital expenditures, acquisitions, general corporate
purposes or other purposes;
o putting us at a competitive disadvantage to our competitors who have less
debt than us; and
o limiting our flexibility to plan for, or to react to, changes in our
business and the industry in which we operate.
LIQUIDITY CONSTRAINTS MAY HINDER OUR CONTINUED OIL AND GAS OPERATIONS.
We have historically funded our operations primarily through our cash flow
from operations and borrowings under credit sources. We anticipate our principal
sources of liquidity during the next 12 months will be cash on hand, cash
generated by operations and borrowings under our bank credit facility.
Our ability to raise funds through additional indebtedness is limited
because substantially all of our crude oil and natural gas properties are
subject to a lien for the benefit of the lenders under the bank credit facility.
We may also choose to issue equity securities or sell assets to fund our
operations, although the terms of our existing indebtedness limit our use of the
proceeds of any sale of assets. If we elect to raise additional capital by
issuing equity securities, there can be no assurance that we will be able to
obtain equity financing on satisfactory terms or at all.
PAST SUBSTANTIAL NET LOSSES MAY AFFECT FUTURE OPERATIONS.
We experienced a substantial net losses for the years ended December 31,
1999 and 2000 of $30.7 million and $32.7 million, respectively. There can be no
assurances that we will become profitable in the future.
WE MAY NOT BE ABLE TO REPLACE DEPLETED RESERVES THAT ARE NECESSARY TO CONTINUE
OUR PRODUCTION.
The rate of production from crude oil and natural gas properties declines
as reserves are depleted. Except to the extent we acquire additional properties
containing proved reserves, or conduct successful exploration and development
activities that identify additional formations with primary or secondary reserve
opportunities on our own properties, our proved reserves will decline as
reserves are produced. Future crude oil and natural gas production is therefore
highly dependent on our level of success in finding and acquiring additional
reserves. Our ability to continue acquiring producing properties or companies
that own producing properties assumes that major integrated oil companies and
independent oil companies will continue to divest some of their crude oil and
natural gas properties. There can be no assurance that these divestitures will
continue or that we will be able to acquire
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producing properties at acceptable prices. Our ability to develop additional
reserves is limited by the terms of the bank credit facility and the standby
loan, each of which limits our ability to obtain additional financing in the
future for acquisitions and capital expenditures.
THE BANKRUPTCY MAY HAVE CREATED A NEGATIVE IMAGE OF US.
The negative effect, if any, which our plan of reorganization may have on
our operations now that it has been consummated cannot be accurately predicted
or quantified. Our plan of reorganization was consummated on March 31, 2000.
Although we believe that the consummation of our plan of reorganization has had
and will continue to have a minimal effect on our relationships with our
customers, employees and suppliers, we cannot assure you that there will not be
a detrimental impact on future sales and patronage because of the negative image
of us that may have been created by the bankruptcy.
IF WE ARE UNABLE TO COMPETE EFFECTIVELY AGAINST MAJOR OIL COMPANIES AND OTHER
INDEPENDENT OPERATORS, WE MAY BE UNABLE TO OBTAIN NECESSARY MATERIALS AND
RESOURCES AND MAY EXPERIENCE A SIGNIFICANT DISRUPTION OF OUR OPERATIONS.
We encounter strong competition from major oil companies and independent
operators in acquiring properties and leases for the exploration for, and
production of, crude oil and natural gas. Competition is particularly intense
with respect to the acquisition of desirable underdeveloped crude oil and
natural gas properties. Many of our competitors have financial resources, staff
and facilities substantially greater than ours. Although we believe our current
operating and financial resources will be adequate to preclude any significant
disruption of our operations in the immediate future, the continued availability
of these materials and resources to us cannot be assured.
WE HAVE A HIGH LEVEL OF DEPENDENCE ON THREE CUSTOMERS THAT CAN DIRECTLY AFFECT
OUR INCOME STATEMENT.
During 2000, two purchasers of our crude oil and natural gas, EOTT Energy
Operating Limited Partnership and Amoco Production Company, accounted for 41%
and 29%, respectively, of our revenues. In October 2000, we began selling our
crude oil that had been previously sold to Amoco, to TEPPCO Crude Oil, L.P. and
Sunoco, Inc. While we believe that our relationships with EOTT, TEPPCO and
Sunoco have been and will continue to be good, any loss of revenue from these
customers due to nonpayment by the customer would have an adverse effect on our
net income and earnings per share on our income statement and, ultimately, may
affect our share price. In addition, any significant late payment may adversely
affect our short-term liquidity position.
POTENTIAL CONFLICTS OF INTEREST WITH OUR MAJORITY STOCKHOLDERS
A variety of conflicts of interest between Appaloosa, PPM America, Oaktree
and our public stockholders may arise as a result of their aggregate ownership
of 88.1% of our common stock. Each of PPM America, Appaloosa and Oaktree, who
own 35.9%, 28.3% and 23.8% of our common stock, respectively, may decide to sell
all or part of their ownership interests in us in a transaction that does not
provide other stockholders the opportunity to sell their shares to the purchaser
for a price reflecting a change of control premium. Further, shareholders who
collectively control 66 2/3% of our common stock would be in a position to
control:
o the election of our entire board of directors thereby giving them the
opportunity to select our management; and
o the outcome of the vote on all matters requiring the vote of our
shareholders, such as the acquisition or disposition of our assets,
including the sale of our business as a whole, and the future issuance
of our common stock or other securities.
Two of our directors, Messrs. Goldstein and Bolin, are also officers of
Appaloosa, who owns 28.3% of our common stock.
THE ANTITAKEOVER EFFECTS OF SOME OF THE PROVISIONS OF OUR GOVERNING DOCUMENTS
MAY PREVENT SOME TRANSACTIONS.
Some of the provisions of our articles of incorporation and bylaws may tend
to deter potential unsolicited offers or other efforts to obtain control that
are not approved by our board of directors. These provisions include the right
of our board of directors, without any action by our shareholders, to fix the
rights and preferences of undesignated preferred stock, including dividend,
liquidation and voting rights. All of these provisions apply to the common
stock, and may have the effect of delaying, deferring or preventing a change of
control.
OUR COMMON STOCK IS NOT LISTED ON THE NASDAQ NATIONAL MARKET OR ANY OTHER STOCK
EXCHANGE, WHICH MAY DEPRESS THE PRICE OF THE COMMON STOCK AND YOU MAY HAVE
DIFFICULTIES RESELLING THE STOCK.
We intend to explore the possibility of listing our common stock on the
Nasdaq National Market or on one or more other national securities exchanges.
However, there can be no assurance that we will determine that it is feasible,
practicable or advisable to list our common stock or that, if an application is
made, our common stock would be approved for listing. Our inability to secure
the listing of our common stock or the decision not to list our common stock
will affect the liquidity and marketability of our common stock. Even if our
common stock is approved for listing on the Nasdaq National Market or any other
national securities exchange, there can be no assurance as to the price as to
which any shares of our common stock may be traded when issued or that an
established market for those securities will develop.
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OUR PROFITABILITY IS HIGHLY DEPENDENT ON INDUSTRY CONDITIONS THAT HAVE, IN THE
PAST, CAUSED US TO IMPLEMENT SIGNIFICANT WRITEDOWNS OF OUR ASSETS.
Our revenue, profitability and future rate of growth substantially depend
on prevailing prices for crude oil and natural gas. Crude oil and natural gas
prices can be extremely volatile. Prices are also affected by actions of state
and local agencies, the United States and foreign governments and international
cartels. Prices for crude oil and natural gas were depressed by excess imported
supplies during 1998 and the first half of 1999 and reached historic lows on an
inflation-adjusted basis. During the last half of 1999, commodity prices
improved significantly and prices continued to increase during 2000 reaching
high price levels not seen since the early 1980's. There can be no assurance
that commodity prices will remain high or will not return to historic lows.
These external factors and the volatile nature of the energy markets make it
difficult to estimate future prices of crude oil and natural gas. The
substantial and extended decline in the prices of crude oil and natural gas
during 1998 and 1999 adversely affected our financial condition and the results
of our operations, including reduced cash flow and borrowing capacity. All of
these factors are beyond our control.
We periodically review the carrying value of our crude oil and natural gas
properties under the full cost accounting rules of the Securities and Exchange
Commission. Under these rules, a ceiling test is performed whereby capitalized
costs of proved oil and natural gas properties may not exceed a present value,
based on unescalated prices at a single point in time, of estimated future net
revenues from proved reserves, discounted at 10%. Application of the ceiling
test generally requires pricing future revenue at the unescalated prices in
effect as of the end of each fiscal quarter and requires a write-down for
accounting purposes if the ceiling is exceeded. We were required to write down
the carrying value of our crude oil and natural gas properties during 1998 by an
aggregate of $188 million. We took a write-down of our Tunisia properties of
$5.4 million during the third quarter of 1999 once it was determined that an
exploratory well drilled in Tunisia, North Africa would not produce sufficient
quantities of crude oil to justify further completion work on the well. We took
an additional write-down on our Tunisia properties of $3.0 million during the
fourth quarter of 2000 because we decided to discontinue our participation in
the exploration of such properties. When a write-down is required, it results in
a charge to earnings, but does not affect cash flow from operating activities.
Once incurred, a write-down of crude oil and natural gas properties is not
reversible at a later date.
WE RELY ON ESTIMATES OF PROVED RESERVES AND FUTURE NET REVENUE INFORMATION THAT
ARE SUBJECT TO MANY FACTORS AND ANY NEGATIVE VARIANCE IN THESE ESTIMATES COULD
AFFECT OUR REPORTED ASSETS AND OUR ABILITY TO BORROW FUNDS.
There are numerous uncertainties inherent in estimating quantities of
proved reserves and in projecting future rates of production and the timing of
development expenditures, including many factors beyond our control. The reserve
data included in our 2000 annual report on Form 10-K represent only estimates.
In addition, the estimates of future net revenue from proved reserves and their
present value are based on assumptions about future production levels, prices
and costs that may change over time. In particular, estimates of crude oil and
natural gas reserves, future net revenue from proved reserves and the present
value of proved reserves for the crude oil and natural gas properties described
in this report are based on the assumption that future crude oil and natural gas
prices remain the same as crude oil and natural gas prices at December 31, 2000.
The NYMEX prices as of December 31, 2000, used for purposes of our estimates
were $26.80 per Bbl of crude oil and $9.78 per MMbtu of natural gas. These year
end market prices are high in comparison to historical average crude oil and
natural gas prices in the most recent three-year period. Any significant
variance in actual results from these assumptions could also materially affect
the estimated quantity and value of our reserves.
WE ARE SUBJECT TO SIGNIFICANT GOVERNMENT REGULATION THAT MAY HINDER OUR ABILITY
TO CONDUCT OUR BUSINESS.
Our business is subject to federal, state, provincial and local laws and
regulations relating to the exploration for and development, production and
marketing of crude oil and natural gas, as well as environmental and safety
matters. These laws and regulations have generally become more stringent in
recent years, often imposing greater liability on a larger number of potentially
responsible parties. Because the requirements imposed by these laws and
regulations are frequently changed, we are unable to predict the ultimate cost
of compliance with these requirements. There is no assurance that laws and
regulations enacted in the future will not hinder our ability to conduct our
business.
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COSTS OF ENVIRONMENTAL LIABILITIES, REGULATION AND LITIGATION COULD EXCEED OUR
ESTIMATES.
Our current and former operations involve management of regulated materials
and are subject to various environmental laws and regulations. These laws and
regulations may obligate us to remediate various sites at which petroleum,
chemicals, low-level radioactive substances or other regulated materials may
have been disposed of or released. We have been party to legal proceedings
involving environmental matters in the past. Although these legal proceedings
were settled in connection with our plan of reorganization, there can be no
assurance that we will not be party to other legal proceedings involving
environmental matters in the future.
It is not possible for us to estimate reliably the amount and timing of all
future expenditures related to environmental matters because of:
o the difficulty of estimating remediation costs;
o the uncertainty in quantifying liabilities under environmental laws
that may impose joint and several liability on all potentially
responsible parties; and
o the nature of environmental laws and regulations.
Although we believe we have established appropriate reserves for
liabilities, including remediation costs, we could be required to set aside
additional reserves in the future due to these uncertainties.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
BOARD OF DIRECTORS
The names of our directors and other information with respect to each of
them are set forth below. Each of these directors was appointed for a one year
term or until the next annual meeting following the date of appointment.
NAME AGE SINCE
---- ----- ------
Michael Y. McGovern(a)(b)............... 49 2000
Eugene I. Davis(a)(c)................... 46 2000
John G. Graham(d)....................... 62 2000
James E. Bolin(a)(c).................... 42 2000
Michael E. Salvati(e)................... 48 2000
Ronald M. Goldstein(b).................. 46 2000
(a) Member of the Executive Committee.
(b) Member of the Compensation Committee.
(c) Member of the Audit Committee.
(d) Chairman of the Audit Committee.
(e) Chairman of the Compensation Committee.
Michael Y. McGovern. Mr. McGovern has served as our President and Chief
Executive Officer since April 1, 2000. Mr. Govern served as Managing Director of
Pembrook Capital Corporation, an energy investment and advisory services
company, from 1998 until March 31, 2000 and served as Chairman and Chief
Executive Officer for Edisto Resources Corporation, a publicly held oil and gas
company, from 1993 to 1997. Mr. Govern is a director of Greystar Corporation, a
private production management service company; Century Seismic LLC, a private
seismic data library service; and Goodrich Petroleum Corporation, a public oil
and gas company.
Eugene I. Davis. Mr. Davis has served as Chairman and Chief Executive
Officer of Pirinate Consulting Group, L.L.C., a consulting firm specializing in
crisis and turn-around management advisory services for public and private
businesses, since 1999. Mr. Davis served as Chief Operating Officer of Total-Tel
USA Communications, Inc., an integrated telecommunications provider, from 1998
to 1999. He also served in various officer positions, lastly as Vice Chairman
and Director, of Emerson Radio Corporation, an international distributor of
consumer electronics products, since 1990. Mr. Davis is a director of Eagle
Geophysical Corporation, a privately held seismic company.
John G. Graham. Mr. Graham has served as President and Chief Executive
Officer of Utilities Mutual Insurance Company, a mutual provider of workers'
compensation and other insurance lines, since May 1999. Mr. Graham also served
as Senior Vice President and Chief Financial Officer of GPU Service Corporation,
a domestic and international electric utility, from 1976 to April 1999. Mr.
Graham is a director of Viatel Inc., a publicly held telecommunications company.
James E. Bolin. Mr. Bolin has served as Vice President and Secretary of
Appaloosa Partners, Inc., an investment firm and the general partner of
Appaloosa Management, L.P. which is one of our principal shareholders, since
1995. Mr. Bolin served as a Vice President and Analyst for Goldman, Sachs &
Company, an investment banking firm, from 1989 to 1995, and as Director of
Corporation Bond Research from 1992 to 1995. Mr. Bolin is a director of Inamed
Corporation, a publicly held medical device company, and, following the
consummation of its plan of reorganization, Kindred Corporation (formerly known
as Vencor Corporation), a publicly held nursing home operator.
Michael E. Salvati. Mr Salvati is an independent financial consultant with
Oak Ridge Consulting, Inc. Mr. Salvati also served as Chief Financial Officer of
MarchFirst, a publicly held internet professional services company, during March
and April 2001. Mr. Salvati served as Executive Vice President and Chief
Operating Officer of National Financial Partners Corp., a financial services
firm, from 1998 to February 2000. Mr. Salvati served as Vice President and Chief
Financial Officer of Culligan Water Technologies, Inc., from 1996 to 1998, and
was a Partner with KPMG Peat Marwick LLP, a public accounting firm, prior to
1996.
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Ronald M. Goldstein. Mr. Goldstein currently serves as Vice President and
Chief Financial Officer of Appaloosa Partners, Inc., an investment firm and the
general partner of Appaloosa Management, L.P., which is one of our principal
shareholders. Prior to joining Appaloosa Partners, Inc. in 1993, Mr. Goldstein
was a Senior High Yield Trader for Bear Stearns & Company, an investment banking
firm.
There is no family relationship between any director, executive officer or
person nominated or chosen by the registrant to become a director or executive
officer.
EXECUTIVE OFFICERS
The names of our executive officers and other information with respect to
them are set forth below:
Name Age Position
- ---- --- --------
Michael Y. McGovern 49 President, Chief Executive Officer and Director
Gary L. Pittman 45 Vice President, Chief Financial Officer and
Corporate Secretary
Gerald E. Ruley 60 Vice President-Operations, Exploration, Land
and Reserves
Susan J. McAden 43 Controller and Chief Accounting Officer
For information concerning Michael McGovern, see the table under the
caption "Directors," above.
Gary L. Pittman has served as our Chief Financial Officer and Corporate
Secretary since April 1, 2000. Mr. Pittman served as Chief Financial Officer of
Bell Geospace, Inc., a privately held technology based provider of high
resolution gradient data to the oil and gas industry, from August 23, 1999 to
March 17, 2000. Bell Geospace was a financial distress start-up company that
engaged Mr. Pittman to assist in developing and executing a strategic business
plan, which included filing bankruptcy on October 4, 1999. In March 2000, Bell
Geospace filed its plan of reorganization and Mr. Pittman resigned. The court
subsequently approved Bell Geospace's plan of reorganization on July 23, 2000.
Mr. Pittman also served as a financial consultant to Perception, Inc., a
privately held manufacturing company, from 1998 to 1999, and as Executive Vice
President and Chief Financial Officer of Convest Energy Corporation, a publicly
traded independent energy company, from 1995 to 1997.
Gerald E. Ruley has served as our Vice President-Operations since April 1,
2000 and as a Production Manager for Coho since 1996. Mr. Ruley also served as
Exploration and Production Manager of Winchester Production Company, an
independent energy company, from 1994 to 1995.
Susan J. McAden has served as our Controller and Chief Accounting Officer
since April 1, 2000. Ms. McAden has been employed by us since February 1995 as
Controller and was promoted to Vice President and Controller in January 1998.
Messrs. McGovern and Pittman were directors and officers of two of Coho's
wholly-owned subsidiaries that filed for protection under Chapter 11 of the
United States Bankruptcy Code in February 2001 as discussed under Part I, Items
1 and 2. "Business and Properties-Oil and Gas Operations-Tunisian Operations."
Mr. Ruley was also a director of these two wholly-owned subsidiaries. Mr. Ruley
and Ms. McAden were officers of one of these two wholly-owned subsidiaries.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To our knowledge, based solely on a review of the copies of reports
required pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, that have been furnished to us and written representations that no
other reports were required, during the year ended December 31, 2000 all Section
16(a) filing requirements applicable to its directors, executive officers and
greater than 10% beneficial owners have been met except as follows:
o the Form 3 for Oaktree Capital Management, LLC related to its common
shares acquired under our plan of reorganization was not filed on a
timely basis;
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o the Form 3s required to be filed upon the appointment of Messrs.
McGovern, Pittman and Ruley as executive officers were not timely
filed; and
o the Form 5s for the executive officers and the non-employee directors
reporting exempt option grants during 2000 were not timely filed.
ITEM 11. EXECUTIVE COMPENSATION
The following tables contain information about our most highly compensated
executive officers, including our Chief Executive Officer, in 1998, 1999 and
2000.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards
------------
Annual Compensation Securities
--------------------------- Underlying All Other
Name and Principal Position Year Salary Bonus Options (#) Compensation
- --------------------------- ---- --------------------------- ----------- ------------
Michael Y. McGovern 2000 $ 262,494 -- 560,825 $ 103,914
President and Chief Executive 1999 -- -- -- --
Officer(1) 1998 -- -- -- --
Jeffrey Clarke 2000 $ 89,423 -- -- $ 579,189
Former President and Chief 1999 300,000 -- -- 53,194
Executive Officer(2)(8) 1998 300,000 -- -- 378,060
Gerald E. Ruley 2000 $ 218,256 -- 233,677 $ 8,500
Vice President-Operations, 1999 -- -- -- --
Exploration, Land and Reserves(3) 1998 -- -- -- --
Gary L. Pittman 2000 $ 150,000 -- 186,942 $ 46,805
Vice President, Chief Financial 1999 -- -- -- --
Officer and Corporate Secretary(4) 1998 -- -- -- --
Susan J. McAden 2000 $ 111,375 $ 18,333(9) -- $ 90,599
Controller and 1999 -- -- -- --
Chief Accounting Officer(5) 1998 -- -- -- --
Anne Marie O'Gorman 2000 $ 112,067 $ 29,167(9) -- $ 305,099
Former Senior Vice President 1999 175,000 -- -- 11,511
Corporate Development and 1998 175,000 -- -- 83,106
Corporate Secretary(6)(8)
Larry L. Keller 2000 $ 163,000 $ 27,167(9) -- $ 133,174
Former Vice President, Mid 1999 163,000 -- -- 10,481
Continent Division(7)(8) 1998 163,000 -- -- 83,685
(1) Mr. McGovern has served as our President and Chief Executive Officer since
April 1, 2000. Mr. McGovern's All Other Compensation includes our
contributions to a 401(k) savings plan of $8,500 and $95,414 related to
relocation costs.
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(2) Mr. Clarke ceased to serve as President, Chief Executive Officer and
Chairman on March 31, 2000, and is no longer employed by us. Mr. Clarke's
All Other Compensation includes our contributions to a 401(k) savings plan
of $4,500 in 2000 and $8,000 in each of 1999 and 1998; premiums paid on a
disability and life insurance policy of $32,656, $33,118 and $32,656 in
2000, 1999 and 1998, respectively; $12,076 in each of 1999 and 1998 of
imputed interest on a loan from Coho; a severance payment of $412,500 in
2000; consulting fees paid during the last nine months of 2000 totaling
$65,000 associated with marketing our Tunisian properties for sale; and
forgiveness of debt of $64,533 in 2000 under his severance agreement.
(3) Mr. Ruley has served as our Vice President-Operations, Exploration, Land
and Reserves since April 1, 2000. Mr. Ruley's All Other Compensation
includes our contributions to a 401(k) savings plan of $8,500. Mr. Ruley
did not serve as an executive officer during 1998 and 1999.
(4) Mr. Pittman has served as our Vice President, Chief Financial Officer and
Corporate Secretary since April 1, 2000. Mr. Pittman's All Other
Compensation includes our contributions to a 401(k) savings plan of $7,500
and $39,305 related to relocation costs.
(5) Ms. McAden has served as our Controller and Chief Accounting Officer since
April 1, 2000. Ms. McAden's All Other Compensation includes our
contributions to a 401(k) savings plan of $6,485; premiums paid on a
disability policy of $1,614; and claim settlement payments totaling $82,500
associated with the termination of her severance agreement in our
reorganization.
(6) Ms. O'Gorman ceased to serve as Senior Vice President, Corporate
Development and Corporate Secretary on April 1, 2000. Ms. O'Gorman's All
Other Compensation includes our contributions to a 401(k) savings plan of
$8,500 in 2000 and $8,000, in each of 1999 and 1998; premiums paid on a
disability policy of $3,325, $3,511 and $3,429 in 2000, 1999 and 1998,
respectively; a severance payment of $162,025 in 2000; and claim settlement
payments totaling $131,250 in 2000 associated with the termination of
employment agreement in our reorganization.
(7) Although Mr. Keller continued his employment with Coho during 2000, Mr.
Keller ceased to serve as Vice President, Mid Continent Division on April
4, 2000. Mr. Keller's All Other Compensation includes our contributions to
a 401(k) savings plan of $8,500 in 2000 and $8,000 in each of 1999 and
1998; premiums paid on a disability policy of $2,424, $2,481 and $2,345 in
2000, 1999 and 1998, respectively; and claim settlement payments totaling
$122,250 in 2000 associated with the termination of his severance agreement
in our reorganization.
(8) Included in All Other Compensation for Messrs. Clarke and Keller and Ms.
O'Gorman for 1998 are payments of $324,992, $73,331 and $71,678,
respectively, which represent amounts paid on January 22, 1998 to make up
the difference of the guaranteed price of $10.50 and the strike price of
stock options exercised in October 1997.
(9) Represents the initial 33% retention bonus payment paid immediately after
the confirmation of our plan of reorganization.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------
GRANTED FISCAL YEAR PRICE DATE 5% 10%
---------- ------------ -------- ---------- ------- --------
Michael Y. McGovern 280,412 28.6% $10.40 Oct. 1/05 to $ -- $ --
Apr. 1/07(1)
70,104 7.1% $ 5.98 Oct. 1/05 $ 4,355 $121,206
70,103 7.1% $ 5.98 Apr. 1/06 $ 16,981 $157,327
70,103 7.1% $ 5.98 Oct. 1/06 $ 25,113 $173,591
70,103 7.1% $ 5.98 Apr. 1/07 $ 38,776 $214,952
Gerald E. Ruley 116,837 11.9% $10.40 Oct. 1/05 to $ -- $ --
Apr. 1/07(1)
29,210 3.0% $ 5.98 Oct. 1/05 $ 1,815 $ 50,503
29,210 3.0% $ 5.98 Apr. 1/06 $ 7,075 $ 65,554
29,210 3.0% $ 5.98 Oct. 1/06 $ 10,464 $ 72,330
29,208 3.0% $ 5.98 Apr. 1/07 $ 16,156 $ 89,558
Gary L. Pittman 93,471 9.5% $10.40 Oct. 1/05 to $ -- $ --
Apr. 1/07(1)
23,368 2.4% $ 5.98 Oct. 1/05 $ 1,452 $ 40,402
23,368 2.4% $ 5.98 Apr. 1/06 $ 5,660 $ 52,443
23,368 2.4% $ 5.98 Oct. 1/06 $ 8,371 $ 57,864
23,367 2.4% $ 5.98 Apr. 1/07 $ 12,925 $ 71,649
(1) The options granted in 2000 vest over a two year period with 25% of them
vesting on each of October 1, 2000, April 1, 2001, October 1, 2001 and
April 1, 2002. The options expire five years from their vesting date.
No options were granted to Messrs. Clarke and Keller or to Mss. O'Gorman
and McAden during 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END(1) AT FISCAL YEAR-END (2)
ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE NON-EXERCISABLE EXERCISABLE NON-EXERCISABLE
- ---- -------- -------- ----------- --------------- ----------- ---------------
Michael Y. McGovern -- $ -- 140,206 420,619 $ -- $ --
Gerald E. Ruley -- $ -- 58,420 175,257 $ -- $ --
Gary L. Pittman -- $ -- 46,736 140,206 $ -- $ --
Susan J. McAden -- $ -- -- -- $ -- $ --
(1) All options issued to Messrs. Clarke and Keller and Ms. O'Gorman were
canceled in connection with our plan of reorganization.
(2) Computed based upon the difference between the market price on December 31,
2000 of $3.25 per share and the exercise price per share.
EMPLOYMENT AGREEMENTS
On April 1, 2000, we entered into employment agreements with each of
Messrs. McGovern, Ruley and Pittman, which provide for minimum annual
compensation in the amount of $350,000, $250,000, and $200,000, respectively.
Each employment agreement is for a term of two years, which term automatically
renews daily for a term to extend two years from the renewal date until either
party gives notice. Additionally, each employment agreement
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automatically terminates on the date of a "Change of Control," as defined below.
Each employment agreement entitles the officer to participate in the bonus,
incentive compensation and other programs that are created by our board of
directors. If any of Messrs. McGovern, Ruley or Pittman is terminated by Coho
without "Cause" (as defined below), or if the employment agreements are
automatically terminated because of a "Change of Control," Coho would:
o pay that individual a cash lump sum payment equal to two times the
executive's then-current annual rate of total compensation; and
o continue, until the second anniversary of the employment termination,
health and life insurance coverage under our plans or the equivalent
thereof on the same basis as our other senior executives.
If any of Messrs. McGovern, Ruley or Pittman becomes disabled or dies during the
term of the respective employment agreement, the employment agreement may be
terminated by us, and we will pay the executive or his estate any unpaid
compensation and other benefits under the employment agreement until the date of
termination.
The term "Cause" is defined in each employment agreement generally to mean:
o any material failure of the executive after written notice to perform
his or her duties;
o commission of fraud, embezzlement or misappropriation by the executive
against Coho;
o a material breach by the executive of the employment agreement or of
the fiduciary duty owed to Coho; or
o conviction of the executive of a felony offense or a crime involving
moral turpitude.
Under each employment agreement, a "Change of Control" of Coho is deemed to
have occurred if:
o there is a sale, lease or other transfer of all or substantially all
of the assets of Coho;
o our shareholders adopt a plan relating to the liquidation or
dissolution of Coho;
o any person or group of persons acting in concert becomes the
beneficial owner of more than 50 percent of the voting power of our
securities generally entitled to vote in the election of directors,
with certain exceptions; or
o there occurs a merger or consolidation of Coho unless, after the
transaction, all of those persons who were the beneficial owners of
our common stock before the transaction beneficially own 50 percent or
more of the total voting power of all securities generally entitled to
vote in the election of directors, managers or trustees of the
surviving entity.
We had employment agreements with each of Jeffrey Clarke and Anne Marie
O'Gorman. Additionally, we had severance agreements with Larry L. Keller and
Susan J. McAden. Each of the above is a former officer of Coho, and Mr. Clarke
is also a former director. We rejected each of these agreements under our plan
of reorganization, and each of the above filed proofs of claim in our bankruptcy
case. We negotiated settlement agreements with each of Messrs. Clarke and Keller
and Ms. O'Gorman and Ms. McAden, which agreements are described below.
On April 3, 2000, we entered into an executive employment severance
agreement with Jeffrey Clarke, our former president and chief executive officer.
The purpose of this agreement was to compromise and settle any claims Mr. Clarke
may have had under his prior employment agreement and to secure Mr. Clarke's
assistance in the lawsuit we filed against Hicks Muse. In addition, Mr. Clarke
agreed to serve as a consultant to us for up to two days per week through June
30, 2000. Under the compromise and settlement agreement, Mr. Clarke received a
total of $875,000 as a cash settlement, $412,500 of which was paid in April 2000
and $462,500 of which was paid in January 2001.
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In addition, under the agreement, Mr. Clarke is entitled to the following
non-cash benefits:
o payment of two years of medical insurance, life insurance and
disability insurance;
o release of any claims we may have in connection with the non-interest
bearing sole recourse loan made to Mr. Clarke in October 1997 to
assist him in the exercise of expiring options;
o forbearance of the interest-free loan from us to Mr. Clarke in the
amount of $205,000 used to purchase a house, in exchange for Mr.
Clarke's assistance in the Hicks Muse lawsuit, which loan will be
forgiven on the date the Hicks Muse lawsuit is settled or otherwise
concluded;
o a three-year directors' and officers' insurance policy covering
actions prior to the effective date of our plan of reorganization; and
o our agreement not to assign any claims we may have against Mr. Clarke,
if any.
On April 13, 2000, we entered into an agreement with Anne Marie O'Gorman,
our former Senior Vice President-Corporate Development and Corporate Secretary,
to compromise and settle her claims under her employment agreement, which was
rejected under our plan of reorganization. Under the compromise and settlement
agreement, Ms. O'Gorman received $175,000 as a cash settlement, $131,250 of
which was paid in 2000 and $43,750 of which was paid in January 2001. Ms.
O'Gorman also received a severance payment of $162,025 upon termination in
August 2000.
In addition, under the agreement, Ms. O'Gorman was released from any claims
we may have had in connection with the non-interest bearing sole recourse loan
made to Ms. O'Gorman in October 1997 to assist her in the exercise of expiring
options. Further, Ms. O'Gorman is entitled to the payment of medical and dental
coverage through August 2001.
Also on April 13, 2000, we entered into agreements with Larry L. Keller,
our former Vice President, Mid-Continent Division, and Susan J. McAden, related
to her former position as our Vice President and Controller, to compromise and
settle their claims under their previous severance agreements, which were
rejected under our plan of reorganization. Under the compromise and settlement
agreements, Mr. Keller received a $163,000 cash settlement, $122,250 of which
was paid in 2000 and $40,750 of which was paid in January 2001 and Ms. McAden
received a $110,000 cash settlement, $82,500 of which was paid in 2000 and
$27,500 of which was paid in January 2001.
In addition, under the agreement, Mr. Keller was released from any claims
we may have had in connection with the non-interest bearing sole recourse loan
made to Mr. Keller in October 1997 to assist him in the exercise of expiring
options.
We have entered into an executive stay agreement with Ms. McAden which is
designed to encourage her to continue to carry out her duties with us in the
event we have a change in control. If she, subsequent to a change of control,
continues to be employed by us for a period of greater than 180 days or if her
employment is terminated for other than cause, this stay agreement generally
provides for a payment in an amount equal to her annual salary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
At December 31, 2000 the members of our compensation committee were Michael
E. Salvati, Ronald M. Goldstein and Michael Y. McGovern. Mr. McGovern has also
served as our president and chief executive officer since April 1, 2000. No
other member of our compensation committee was an officer or employee of Coho at
any time during 2000.
During 2000, no executive officer of Coho served as:
o a member of the compensation committee or other board committee
performing equivalent functions (or, in the absence of any such
committee, the board of directors) of another entity, one of whose
executive officers served on the compensation committee of our board
of directors;
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o director of another entity, one of whose executive officers served on
the compensation committee of our board of directors; or
o a member of the compensation committee or other board committee
performing equivalent functions (or, in the absence of any such
committee, the board of directors) of another entity, one of whose
executive officers served as a director of Coho.
COMPENSATION OF DIRECTORS
Directors who are not our employees receive an annual retainer of $15,000
plus a fee of $1,000 for each meeting of our board of directors or meeting of a
committee of our board of directors attended in person. Additionally, members of
the Audit, Compensation and Executive Committees will receive an annual fee of
$2,000, with the exception of the chairman of each Committee, who will receive
an annual chairman fee of $3,500. All directors are reimbursed for expenses
incurred in attending meetings of our board of directors or meetings of
committees of our board of directors. Our employees who are also directors do
not receive a retainer or fees for attending meetings of our board of directors
or meetings of committees of our board of directors.
On April 1, 2000, we entered into an agreement with Pirinate Consulting
Group, LLC with respect to monthly financial advisory services to be performed
by Eugene I. Davis for us for a monthly retainer of $15,000. Mr. Davis is
Chairman and Chief Executive Officer of Pirinate Consulting Group, LLC and is
currently one of our directors.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
On August 17, 2000, we adopted a non-employee director stock option plan
for our current non-employee directors. On August 17, 2000, each non-employee
director received options to purchase 10,000 shares of our common stock at a
price per share equal to the closing sale price of our common stock on August
17, 2000. In addition, on August 1 each year thereafter the directors are each
entitled to receive options to purchase an additional 5,000 shares of our common
stock at the closing sale price on the date of grant.
Options granted under the non-employee director stock option plan are fully
exercisable on the date of grant and must be exercised within five years from
the date of grant. The options terminate on the earlier of the date of the
expiration of the option or one year after the date the optionee ceases to serve
as a director of Coho.
REPORT OF THE COMPENSATION COMMITTEE WITH RESPECT TO COMPENSATION OF EXECUTIVE
OFFICERS
To the Board of Directors
Coho Energy, Inc.
Objectives
The objective of the Compensation Committee is to develop compensation
policies which will provide incentives to key executives to develop and carry
out Coho's business strategy that will result in the maximization of return to
the shareholders. More specifically, the Compensation Committee's objectives are
to develop compensation policies which will:
o allow Coho to attract and retain qualified individuals;
o encourage achievement of Coho's short term and long term goals; and
o align executive remuneration with the interest of shareholders by
linking a significant portion of executive compensation to the
appreciation of the share price of the common stock.
The Compensation Committee's philosophy toward executive compensation is to
provide a combination of base level cash compensation and annual incentives, as
well as providing longer term awards through a stock option plan. Executives are
also permitted to participate in a health benefits insurance program and a 401
(k) plan, each of which is available to all employees of Coho.
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Base Compensation
The minimum cash compensation levels set forth in the employment agreements
for Messrs. McGovern, Ruley and Pittman were based on such factors as the
executives' levels of responsibility, prior experience, breadth of knowledge and
compensation paid to similarly situated executives employed by oil and gas
companies with capitalizations similar to Coho and with experience in directing
a company emerging from a bankruptcy reorganization. The Compensation
Committee's review and analysis of these matters was subjective in nature, with
no particular weight being placed on any specific factors.
Annual Incentives
Although the employment agreements for Messrs. McGovern, Ruley and Pittman
entitle them to participate in bonus and incentive compensation programs, no
such programs have been implemented yet.
Long Term Incentives
Longer term incentives in the form of stock options to executives are
designed to enhance long term growth in shareholder value. The committee
believes that linking a portion of executive compensation to future shareholder
value will encourage long term performance and growth of Coho.
Messrs. McGovern, Pittman and Ruley were granted options under their
employment agreements in 2000 for the purchase of a total of 560,825, 186,942
and 233,677 shares of our common stock, respectively. These option grants
provide for a two year vesting period with 25% of them vesting on each of
October 1, 2000, April 1, 2001, October 1, 2001 and April 1, 2002. The exercise
price for half of the options was set at $5.98 per share (the average closing
price for the 70 days following March 31, 2000) and the exercise price for the
remaining half was set at $10.40 per share (the share price set forth in Coho's
plan of reorganization).
Respectfully submitted,
COMPENSATION COMMITTEE
Michael E. Salvati
Ronald M. Goldstein
Michael Y. McGovern
PERFORMANCE GRAPH
The following graph compares, as of December 31 for each of the dates
indicated, the percentage change in cumulative total stockholder return on our
common stock with the cumulative total return of the Standard & Poor's 500 Index
and the Standard Industrial Code Index for Crude Oil and Natural Gas Producers.
The graph assumes that the value of the investment in our common stock and each
index was $100 at December 31, 1995 and that all dividends paid by those
companies included in the indices were reinvested.
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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG COHO ENERGY, INC., THE S & P 500 INDEX
AND A PEER GROUP
[PERFORMANCE GRAPH]
Measurement Period Coho Energy, Industry Broad
(Fiscal Year Covered) Inc. Index Market
1995 100.00 100.00 100.00
1996 146.15 125.44 122.96
1997 187.18 125.02 163.98
1998 57.64 97.71 210.84
1999 8.97 121.54 255.22
2000 1.67 196.76 231.98
ITEM 12. SECURITY OWNERSHIP OF PRINCIPAL BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to persons or entities who,
to our knowledge based on information received from those persons or entities,
were the beneficial owners of more than 5% of the outstanding shares of common
stock as of April 20, 2001. Unless otherwise specified, these persons have sole
voting power and sole dispositive power with respect to all shares attributable
to them.
Common Stock
-----------------------------------------------
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class(1)
- ------------------------------------ -------------------- -------------------
PPM America, Inc.(2) 6,721,076 35.9%
225 West Wacker Drive, Suite 1200
Chicago, Illinois 60606
Appaloosa Management, L.P.(3) 5,289,934 28.3%
26 Main Street
Chatham, New Jersey 07928
Oaktree Capital Management, LLC(4) 4,476,979 23.9%
333 South Grand Avenue, 28th Floor
Los Angeles, California 90071
(1) Based on 18,714,175 shares issued and outstanding as of April 20, 2001.
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(2) Based on information contained in a Schedule 13D filed October 23, 2000
filed with the Commission. PPM America, Inc. has shared voting and
dispositive power with respect to 6,721,076 shares of new common stock that
are owned by it.
(3) Based on information contained in a Schedule 13D filed August 16, 2000
filed with the Commission. Appaloosa Management, L.P. is a limited
partnership and has sole voting and dispositive power with respect to
5,269,934 shares of new common stock that are owned by the partnership. The
number of shares shown as beneficially owned includes the 20,000 shares
that may be acquired upon the exercise of stock options held by Mr. Bolin
and Mr. Goldstein for the benefit of Appaloosa Management, L.P.
(4) Based on information contained in Schedule 13D filed December 29, 2000 with
the Commission. Oaktree Capital Management, LLC has sole voting and
dispositive power with respect to 4,476,979 shares of Common Stock that are
owned by it.
The following table sets forth information with respect to common stock
beneficially owned as of April 20, 2001 by each of our directors, by each
executive officer named in the Summary Compensation Table and by all directors
and officers as a group. Unless otherwise specified, these persons have sole
voting power and sole dispositive power with respect to all shares attributable
to him or her.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT OF CLASS(1)
-------------------- -------------------
James E. Bolin (2)............................................... 5,289,934 28.3%
Eugene I. Davis (3).............................................. 10,000 *
Ronald M. Goldstein (4).......................................... 5,289,934 28.3%
John G. Graham (3)............................................... 10,000 *
Susan J. McAden.................................................. -- --
Michael Y. McGovern (5).......................................... 293,512 1.5%
Gary L. Pittman (5).............................................. 100,021 *
Gerald E. Ruley (5).............................................. 121,457 *
Michael E. Salvati (3)........................................... 10,000 *
All directors and executive officers as a group (9 persons)...... 5,844,924 31.2%
* Less than 1%
(1) Based on 18,714,175 shares issued and outstanding as of April 20, 2001.
(2) Mr. Bolin, one of our directors, is a vice president and secretary of
Appaloosa Partners, Inc. and, as such, may be deemed to beneficially own
the 5,269,934 shares owned by Appaloosa Partners, Inc. The number of shares
shown as beneficially owned by Mr. Bolin includes the 20,000 shares that
may be acquired within 60 days of the date hereof upon the exercise of
stock options held by Mr. Bolin and Mr. Goldstein for the benefit of
Appaloosa Management L.P.
(3) Includes 10,000 shares that may be required upon exercise of stock options
held by each of Mr. Davis, Mr. Graham and Mr. Salvati within 60 days of the
date hereof.
(4) Mr. Goldstein, one of our directors, is a vice president and chief
financial officer of Appaloosa Partners, Inc. and, as such, may be deemed
to beneficially own the shares owned by Appaloosa Partners, Inc. The number
of shares shown as beneficially owned by Mr. Goldstein includes the 20,000
shares that may be acquired within 60 days of the date hereof upon the
exercise of stock options held by Mr. Goldstein and Mr. Bolin for the
benefit of Appaloosa Management L.P.
(5) The numbers of shares shown as beneficially owned by Messrs. McGovern,
Pittman and Ruley include shares 280,413, 93,471, and 116,839,
respectively, that may be acquired upon exercise of stock options within 60
days of the date hereof. Included in Mr. Ruley's total shares are 1,496
shares which are held by a family trust; Mr. Ruley claims no beneficial
interest in these shares.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 31, 2000, and in connection with the consummation of our plan of
reorganization, we issued $72 million of senior subordinated notes, of which
$65.5 million were issued to three of our major shareholders and their
affiliates. In addition, participants purchasing the notes were entitled to a
cash origination fee equal to 3 1/2% of the face amount of the notes purchased
plus an aggregate of 2,694,841 shares of our common stock. Share information,
loan origination fees and notes purchased by our major shareholders are as
follows:
Loan Origination Senior Notes
Common Shares Fee (in 000's) Purchased (in 000's)
------------- -------------- --------------------
PPM America, Inc. and affiliates.................. 1,466,723 $ 1,382 $ 39,500
Appaloosa Management, L.P. and affiliates......... 587,157 $ 560 $ 16,000
Oaktree Capital Management, LLC and
affiliates ..................................... 374,283 $ 350 $ 10,000
In addition, during April 2000, certain of our officers were entitled, under
their employment contracts, to participate in the senior note loans and receive
the benefit of the loan origination fee and additional shares of common stock
issued by purchasing senior notes at face value from Appaloosa Management, L.P.
and PPM America, Inc. and affiliates. Share information, loan origination fees
and senior notes purchased from the major shareholders by our officers are as
follows:
Loan Origination Senior Notes
Common Shares Fee (in 000's) Purchased (in 000's)
------------- -------------- --------------------
Michael Y. McGovern ................................. 13,100 $ 12.5 $ 350
Gary L. Pittman...................................... 6,550 $ 6.0 $ 175
Gerald E. Ruley...................................... 3,743 $ 3.5 $ 100
The senior subordinated notes, as discussed above, require semiannual
interest payments payable in cash or, if required pursuant to the intercreditor
arrangement between the standby lenders and the lenders under our bank credit
agreement, paid-in-kind. On September 29, 2000, the semiannual interest payment
in the aggregate amount of $5,358,000 was paid-in-kind to the holders of the
senior subordinated notes, resulting in the issuance of new senior subordinated
notes to certain major shareholders and officers as follows:
Additional Senior Notes Issued (in 000's)
-----------------------------------------
PPM America, Inc. and affiliates..................... $ 2,923
Appaloosa Management, L.P. and affiliates............ $ 1,170
Oaktree Capital Management, LLC and
affiliates ........................................ $ 657
Michael Y. McGovern ................................. $ 26
Gary L. Pittman...................................... $ 13
Gerald E. Ruley...................................... $ 7
On April 1, 2000, we entered into an agreement with Pirinate Consulting
Group, LLC with respect to monthly financial advisory services to be performed
by Eugene I. Davis for us for a monthly retainer of $15,000. Mr. Davis is
Chairman and Chief Executive Officer of Pirinate Consulting Group, LLC and is
currently one of our directors.
We have entered into executive stay agreements with certain key employees
which are designed to encourage these key employees to continue to carry out
their duties with us in the event we have a change in control. If the employee,
subsequent to a change in control, continues to be employed by us for a period
of greater than 180 days or if the employee's employment is terminated for other
than cause, these stay agreements generally provide for a payment in an amount
equal to the employee's annual salary. The change of control payments paid to
the key employees covered under such severance agreements would aggregate
approximately $406,000.
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Pursuant to a registration rights agreement dated March 31, 2000, we have
agreed to register all shares of our common stock owned, currently or in the
future, by PPM, Appaloosa, Oaktree and Pacholder Associates, Inc. In accordance
with the registration rights agreement, we have filed a shelf registration
statement which became effective on January 8, 2001 and have agreed to keep the
shelf registration statement effective until the earlier of three years from the
date of effectiveness or the time when the shares of common stock covered by the
registration rights agreement have been sold or may be sold without restriction.
We have a limited right to suspend the availability of the shelf registration
statement for a valid business purpose for up to two consecutive 30-day periods
or to prevent the disclosure of material non-public information.
Further, holders of at least 10% of all common stock covered by the
registration rights agreement may request that we register shares for sale in
the manner specified in the request. Each of PPM, Appaloosa, Oaktree and
Pacholder is entitled to three demand registrations. However, they may request a
registration on Form S-3 and if Form S-3 is available to us, there is no limit
on the number of registrations on Form S-3 that we are obligated to effect. We
have a limited right to delay the filing of a registration statement pursuant to
these demands to prevent the disclosure of material non-public information. In
addition, any time we file a registration statement, holders of common stock
covered by the registration rights agreement will have the right to request the
inclusion of their shares in the registration. The number of shares requested to
be registered (except those under the shelf registration statement) may be cut
back, on a pro rata basis, by the managing underwriter in a public offering to
ensure the successful marketing of a smaller number of shares.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
3. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ryder Scott Company, L.P.
23.3 Consent of Sproule Associates, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Coho Energy, Inc.
Date: April 30, 2001 By: /s/ MICHAEL Y. MCGOVERN
-------------------------------------
Michael Y. McGovern
President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ MICHAEL Y. MCGOVERN President, Chief Executive April 30, 2001
- --------------------------- Officer and Director
Michael Y. McGovern
/s/ GARY L. PITTMAN Vice President and Chief April 30, 2001
- --------------------------- Financial Officer
Gary L. Pittman
/s/ SUSAN J. MCADEN Controller and Chief April 30, 2001
- --------------------------- Accounting Officer
Susan J. McAden
/s/ EUGENE I. DAVIS Director April 30, 2001
- ---------------------------
Eugene I. Davis
/s/ JOHN G. GRAHAM Director April 30, 2001
- ---------------------------
John G. Graham
/s/ JAMES E. BOLIN Director April 30, 2001
- ---------------------------
James E. Bolin
/s/ RONALD M. GOLDSTEIN Director April 30, 2001
- ---------------------------
Ronald M. Goldstein
/s/ MICHAEL E. SALVATI Director April 30, 2001
- ---------------------------
Michael E. Salvati
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ryder Scott Company, L.P.
23.3 Consent of Sproule Associates, Inc.