UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 29, 2006
SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
| 1 -08246 | 71-0205415 | |
| (Commission File Number) | (IRS Employer Identification No.) |
|
2350 N. Sam Houston Pkwy. E., Suite 300, Houston, Texas |
77032 | |
| (Address of principal executive offices) | (Zip Code) |
(281) 618-4700
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
EXPLANATORY NOTE: This Form 8-K/A is being filed in order to correct a single error on the cover page of the Report on Form 8-K of Southwestern Energy Company originally filed on June 30, 2006 and the contents of the report have not otherwise been modified or changed. This Form 8-K/A amends and replaces the original 8-K filing in its entirety.
SECTION 1 - Registrant's Business and Operations
Item 1.01 Entry Into A Material Definitive Agreement.
In order to change the state of its incorporation from Arkansas to Delaware (the “ Reincorporation ”), Southwestern Energy Company, an Arkansas corporation (“ SWN Arkansas ”), merged with and into (the “ Merger ”) its wholly-owned subsidiary, Southwestern Energy Company, a Delaware corporation (“ SWN Delaware ”), pursuant to an Agreement and Plan of Merger (the “ Merger Agreement ”) which became effective on June 30, 2006. SWN Delaware is the surviving corporation in the Merger and SWN Delaware’s Certificate of Incorporation and Bylaws prior to the effective time became the Certificate of Incorporation and Bylaws of the surviving corporation. Pursuant to the Merger Agreement, each share of common stock, par value of $0.10 per share, of SWN Arkansas outstanding immediately prior to the effective time of the Merger automatically converted into the right to receive a share of common stock par value of $0.01 per share, of SWN Delaware, including the associated common stock purchase rights. After completion of the Merger, the shareholders of SWN Arkansas became the shareholders of SWN Delaware which, together with its subsidiaries, will continue to be engaged in the same business that SWN Arkansas and its subsidiaries were engaged in prior to the Merger. Pursuant to Section 12g-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act" ), SWN Delaware is the successor registrant to SWN Arkansas. The Merger Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In connection with the Reincorporation and the Merger, SWN Delaware also entered into the following material definitive agreements:
First Amendment and Consent to Amended and Restated Credit Agreement
The Amended and Restated Credit Agreement dated as of January 4, 2005 (the “ Credit Agreement ”) among Southwestern Energy Company, various Lenders and JPMorgan Chase Bank, N.A., as Administrative Agent was amended pursuant to the terms of a First Amendment and Consent dated as of June 29, 2006 (“the First Amendment ”) to provide that the term “Borrower” means Southwestern Energy Company, a Delaware corporation, and its successors and assigns. In addition, pursuant to the terms of the First Amendment and Consent, the Lenders consented to the Reincorporation subject to the concurrent satisfaction of certain conditions.
A copy of the First Amendment is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Supplemental Indentures
On June 30, 2006, SWN Arkansas, SWN Delaware and J.P. Morgan Trust Company, N.A. (as ultimate successor to The First National Bank of Chicago), as Trustee (“ JP Morgan” ) executed the First Supplemental Indenture (the “ First Supplemental Indenture ”) supplementing the Indenture, dated as of December 1, 1995 between SWN Arkansas and The First National Bank of Chicago, as trustee (the “ JP Morgan Indenture ”) relating to SWN Arkansas’ 7.625% Medium-Term Notes due 2027, 7.125% Fixed Rate Notes due October 10, 2017, and 7.35% Fixed Rate Notes due October 2, 2017 (collectively, the “ Notes ”). Pursuant to the First Supplemental Indenture, SWN Delaware has assumed all obligations of SWN Arkansas under the Securities (as defined in the JP Morgan Indenture), including, but not limited to, the Notes, and the JP Morgan Indenture.
On June 30, 2006, SWN Arkansas, SWN Delaware and UMB Bank, N.A. (as successor to The Bank of New York), as Trustee, executed the Second Supplemental Indenture (the “ Second Supplemental Indenture ”) supplementing the Indenture, dated June 1, 1998 between NOARK Pipeline Finance L.L.C. (“ NOARK Finance ”) and The Bank of New York, as Trustee (as previously supplemented by the First Supplemental indenture dated May 2, 2006, the “ UMB Indenture ”), relating to NOARK Finance’s 7.15% Notes due 2018 (the “7.15% Notes”). Pursuant to the Second Supplemental Indenture, SWN Delaware has assumed SWN Arkansas’ obligations with respect to the due and punctual payment of the principal of and interest on the Notes according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indentures to be performed or observed by SWN Arkansas.
Copies of the First Supplemental Indenture and the Second Supplemental Indenture are filed as Exhibits 4.2 and 4.3 to this Current Report on Form 8-K and are incorporated herein by reference.
Second Amended and Restated Indemnity Agreements
Effective June 30, 2006, SWN Delaware amended and restated the indemnity agreements (the “ Second Amended and Restated Indemnity Agreements ”) SWN Arkansas had previously entered into with each of its executive officers and directors in order to reflect the Reincorporation and change the governing law under the Agreements from Arkansas to Delaware. It is the policy of SWN Delaware and its subsidiaries to enter into indemnity agreements with their respective executive officers, directors and key employees (each, an “ Indemnitee ”).
The Second Amended and Restated Indemnity Agreements provide indemnification of an Indemnitee to the fullest extent permitted by law and specifically obligate SWN Delaware and its subsidiaries to (i) indemnify an Indemnitee against all liabilities and losses incurred in connection with any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or other (including, but not limited to, any action by or in the right of SWN Delaware), to which the Indemnitee is, was or at any time becomes a party, is threatened to be made a party, or is involved (as a witness or otherwise), by reason of the fact that the Indemnitee is, was or at any time becomes a director, officer, employee, trustee or agent (including a fiduciary) of SWN Delaware or any subsidiary or is or was serving at the request of SWN Delaware as a director, officer, employee, trustee or agent (including a fiduciary) of another corporation or of a partnership, joint venture, trust or other enterprise, whether the basis of such proceeding is alleged action in an official capacity, or in any other capacity while serving as a director, officer, employee, trustee or agent; and (ii) pay, on behalf of the Indemnitee, and his or her executors, administrators, heirs or assigns, any amount which he or she is or becomes legally obligated to pay because of any claim or claims made against the Indemnitee because of any act or omission or neglect or breach of duty, including any actual or alleged error or misstatement or misleading statement, which Indemnitee commits or suffers while acting in his or her capacity as a director, officer, employee, trustee or agent (including a fiduciary) of SWN Delaware and/or any of the subsidiaries. The payments which SWN Delaware and/or its subsidiaries will be obligated to make under the Second Amended and Restated Indemnity Agreements shall include, inter alia , compensatory and punitive damages, judgments, fines, ERISA excise taxes, penalties, settlements and costs, costs of investigation, (excluding salaries as officers or employees of SWN Delaware and/or its subsidiaries), attorneys’ fees, costs of appearance, attachment and similar bonds and other legal costs of actions, claims, proceedings, investigations and alternative dispute mechanisms, (including actions, claims, proceedings, investigations or alternative dispute mechanisms by or on behalf of SWN Delaware and/or any subsidiary and appeals therefrom), whether civil, criminal, administrative, investigative or other.
The Second Amended and Restated Indemnity Agreements provide for the advancement of any and all reasonable expenses specifically documented (including legal fees and expenses) as being incurred in investigating or defending prior to any final disposition of any threatened or pending action, suit or proceedings (whether civil, criminal, administrative, investigative or other) within thirty (30) days after receiving invoices for such expenses. The Indemnitee agrees that the Indemnitee will promptly reimburse SWN Delaware and/or each relevant subsidiary for all expenses advanced or paid by SWN Delaware and/or each relevant subsidiary in defending any action, suit or proceedings, whether civil, criminal, administrative or investigative, against the Indemnitee in the event and only to the extent that it shall ultimately be determined by a final decision by a court having jurisdiction in the matter that the Indemnitee is not entitled to be indemnified by SWN Delaware and/or any relevant subsidiary for such expenses under the provision of the state statutes, bylaws, the Amended and Restated Indemnity Agreement, or otherwise, or that it is unlawful for the Indemnitee to be indemnified by SWN Delaware and/or any relevant subsidiary for such expenses.
Additionally, the Second Amended and Restated Indemnity Agreements provide that if SWN Delaware or a subsidiary pays an Indemnitee pursuant to the Second Amended and Restated Indemnity Agreements, SWN Delaware or a subsidiary, as the case may be, will be subrogated to the Indemnitee’s rights to recover from third parties.
The Second Amended and Restated Indemnity Agreements prohibit indemnification (i) in respect of remuneration paid to the Indemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; (ii) for an accounting or profits made from the purchase or sale by the Indemnitee of securities of SWN Delaware or any subsidiary pursuant to or within the meaning of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal or state statutory law or common law, (iii) on account of the Indemnitee’s conduct which is finally adjudged to have been knowingly fraudulent, deliberately dishonest, grossly negligent, or willful and wanton misconduct in the performance of his or her duties, which such conduct is material to the establishment of liability for which indemnification is sought pursuant to the terms of this Agreement, or (iv) if a final decision by a court shall determine that such indemnification is not lawful or is against public policy.
Subject to certain exceptions, SWN Delaware has also agreed to maintain the existing directors’ and officers’ insurance policies covering the Indemnitee for so long as the Indemnitee shall continue to serve as a director, officer, employee, trustee or agent (including a fiduciary) of the Company or any subsidiary (or shall continue at the request of SWN Delaware to serve as a director, officer, employee, trustee or agent (including a fiduciary) of another corporation, partnership, joint venture, trust or other enterprise), and for a period of time following the Indemnitee’s cessation of such service (but in no event longer than four (4) years).
The Second Amended and Restated Indemnity Agreements also provide that if there is a change in control of SWN Delaware, SWN Delaware will seek legal advice from special, independent counsel selected by the Indemnitee and approved by SWN Delaware with respect to matters thereafter arising concerning rights of the Indemnitee under the Amended and Restated Indemnity Agreement.
The foregoing description of the Amended and Restated Indemnity Agreements does not purport to be complete and is qualified in its entirety by reference to the Second Amended and Restated Indemnity Agreements, a form of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
SECTION 3 - Securities and Trading Markets
Item 3.03. Material Modification to Rights of Security Holders.
Description of Capital Stock and Common Stock Purchase Rights
Set forth below is a description of the rights, preferences and privileges associated with SWN Delaware’s capital stock and common stock share purchase rights. SWN Delaware's Common Stock (as defined below) and the associated Rights (as defined below) are deemed to be registered under Section 12(b) of the Exchange Act, by operation of Rule 12g-3(a) thereunder. This description is filed for purposes of Section 18 of the Exchange Act and shall be deemed to be incorporated by reference into SWN Delaware’s registration statements filed under the Securities Act of 1933, as amended (the “ Securities Act ”). The following description of the capital stock of SWN Delaware does not purport to be complete and is qualified in its entirety by reference to SWN Delaware’s Certificate of Incorporation and Bylaws which are filed as Exhibits 3.1 and 3.2 to this Current Report on Form 8-K and incorporated herein by reference.
Common Stock
SWN Delaware’s certificate of incorporation authorizes it to issue up to 540,000,000 shares of common stock, par value $0.01 per share (the “ Common Stock ”). After giving effect to the Merger, as of June 30, 2006, there are 168,452,336 shares of Common Stock of SWN Delaware issued and outstanding, including 790,006 shares held in treasury. A specimen of common stock certificate of SWN Delaware is filed as Exhibit 4.4 to this Current Report on Form 8-K and is incorporated herein by reference.
The holders of SWN Delaware’s common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Subject to preferences applicable to any outstanding preferred stock, the holders of common stock are entitled to receive ratably such dividends as may be declared from time to time by SWN Delaware’s board of directors out of funds legally available for distribution, and, in the event of SWN Delaware’s liquidation, dissolution or winding up, the holders of common stock are entitled to share in all assets remaining after payment of liabilities. The holders of the common stock have no preemptive, subscription or conversion rights, and the common stock is not subject to further calls or assessments. There are no redemption or sinking fund provisions available to the common stock.
Preferred Stock
SWN Delaware’s board of directors has the authority, without further action by SWN Delaware’s stockholders, to issue up to 10,000,000 shares of preferred stock, par value $0.01 per share, in one or more series. SWN Delaware’s board of directors may designate the number of shares constituting any series and the rights, preferences, privileges and restrictions of such preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, and sinking fund terms provided , however , that no shares of any series of preferred stock may be issued without the approval of shareholders if (A) the voting rights of the shares of such series would be materially disproportionate to the voting rights of the shares of common stock or (B) the shares of such series would be convertible into a materially disproportionate number of shares of common stock, in each case taking into account the issue price of the shares of such series and the fair market value of the shares of common stock at the time of such issuance. The issuance of SWN Delaware’s preferred stock could adversely affect the voting power of holders of common stock and the likelihood that holders of common stock will receive dividend payments and payments upon liquidation. As of June 30, 2006, no shares of preferred stock were outstanding.
Common Stock Purchase Rights .
Effective June 30, 2006, the Board of Directors of SWN Delaware approved, and SWN Delaware has entered into, an Amendment No. 2 (“ Amendment No. 2” ) to its Amended and Restated Rights Agreement, dated as of April 12, 1999 (as previously amended by Amendment No. 1 dated March 15, 2002 to eliminate all required approvals of Independent Directors, the “ Rights Agreement ”), between SWN Arkansas and Computershare Trust Company, N.A., successor to First Chicago Trust Company of New York (the “ Rights Agent ”), pursuant to which the terms of the outstanding rights (the “ Rights ”) were amended and restated. The outstanding Rights are currently evidenced (on the basis of one Right for each outstanding share) by the existing certificates for outstanding shares of the Common Stock of SWN Delaware (the “ Common Stock ”), and are not exercisable and do not trade separately from such shares. The summary below describes the Rights as so amended by Amendment No. 2.
Each Right, when exercisable, will entitle the registered holder to purchase from SWN Delaware one share of SWN Delaware’s Common Stock at a price of $10 per share (the “ Purchase Price ”), subject to adjustment.
Until the close of business on the earliest of (i) the tenth day after a public announcement that (A) a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership (as defined) of 15% or more of the outstanding shares of Common Stock of SWN Delaware (other than pursuant to a tender offer for all outstanding shares of Common Stock at the price and on terms approved by the Board of Directors based upon a prior recommendation of the Independent Directors (as defined) at a time when there are at least two Independent Directors or solely as a result of a reduction of the number of shares of Common Stock outstanding due to a repurchase of shares by SWN Delaware), (B) any person or group which beneficially owned 15% of the outstanding shares on the date of the Rights Agreement, or which acquired beneficial ownership of 15% of the outstanding shares as a result of any repurchase of shares by SWN Delaware, thereafter acquired beneficial ownership of additional shares constituting 1% or more of the outstanding shares of Common Stock or (C) the Board of Directors determines that a person or group beneficially owning 10% or more of the Common Stock presents a threat to the best interests of SWN Delaware or its shareholders and is therefore an “ Adverse Person ” (any person or group referred to in this clause (i) being an “ Acquiring Person ”); and (ii) the tenth Business Day (or such later day as may be determined by action of the Board of Directors of SWN Delaware prior to such time as any Person becomes an Acquiring Person) after the date of the commencement of, or the first public announcement of the intent of any person (other than a Company Entity (as defined)) to commence (which intention to commence remains in effect for five business days after such announcement) a tender or exchange offer by any Person (other than a Company Entity) to acquire (when added to any shares as to which such Person is the beneficial owner immediately prior to such commencement) beneficial ownership of 15% or more of the issued and 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 SWN Delaware’s Common Stock certificates outstanding as of the Record Date, by such Common Stock certificate.
The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Common Stock. New Common Stock certificates issued after the Record Date upon transfer or new issuance of the Common Stock will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date, the surrender for transfer of any of the Common Stock certificates outstanding as of the date of the Rights Agreement (whether or not containing a notation contemplated by the original Rights Agreement dated May 5, 1989) will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate and the number of Rights associated with each share of Common Stock shall be proportionately adjusted in the event of any dividend in Common Stock on the Common Stock or subdivision, combination or reclassification of the Common Stock (except as otherwise provided in the Rights Agreement). 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 certificates alone will evidence Rights.
The Rights are not exercisable until the Distribution Date. The Rights will expire on April 11, 2009, unless earlier redeemed by SWN Delaware as described below or unless further extended pursuant to an amendment in the Rights Agreement as described below.
The Purchase Price payable, and the number of shares of Common Stock 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 Common Stock, (ii) upon the grant to holders of Common Stock of certain rights or warrants to subscribe for shares of Common Stock or convertible securities at less than the current market price of the Common Stock or (iii) upon the distribution to holders of Common Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Common Stock) or of subscription rights or warrants (other than those referred to above).
In the event that, at any time after the Rights become exercisable, SWN Delaware is acquired in a merger or other business combination, proper provision shall be made so that each holder of a Right shall 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 surviving company (or its parent company or other controlling entity) which at the time of such transaction would have a market value of two times the exercise price of the Right. In the event that any person becomes an Acquiring Person, the Rights Agreement provides that proper provision would be made so that each holder of a Right, other than the Acquiring Person (whose Rights would thereafter be null and void) and certain of its transferees, would thereafter have the right to receive upon exercise that number of shares of the Common Stock having a market value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Common Stock on the last trading date prior to the date of exercise.
At any time prior to the close of business on the date that Rights holders become entitled to purchase Common Stock of SWN Delaware (or of the surviving entity after a merger with SWN Delaware) with a market value of twice the Purchase Price (as described above), the Board of Directors of SWN Delaware may redeem the Rights in whole, but not in part, at a price of $.01 per Right (payable in cash, shares of Common Stock or other consideration), appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “ Redemption Price ”). Immediately upon the action of the Board of Directors of SWN Delaware electing to redeem the Rights (unless otherwise specified in such Board action), the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.
Upon the first public announcement (including, without limitation, the filing of a report pursuant to the Exchange Act) by SWN Delaware or an Acquiring Person containing information indicating that an Acquiring Person has become such and prior to the acquisition by an Acquiring Person of 50% or more of the Common Stock then outstanding, the Board of Directors may, at its option, exchange all or part of the then outstanding and existing Rights (other than Rights owned by such Acquiring Person which shall become void) for Common Stock at an Exchange Ratio of one share of Common Stock per Right (subject to adjustment) (the “ Exchange Ratio ”). Immediately upon the action of the Board of Directors of SWN Delaware electing to exchange the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive that number of shares of Common Stock or Common Stock equivalents equal to the number of Rights held by such holder multiplied by the Exchange Ratio.
Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of SWN Delaware, including, without limitation, no right to vote or to receive dividends.
At any time prior to the time that an Acquiring Person has become such, SWN Delaware may amend the Rights Agreement and the terms of the Rights in any manner deemed necessary or desirable. Thereafter, the Rights Agreement and the terms of the Rights may be amended by SWN Delaware under certain circumstances, but not in any manner that adversely affects the interests of the holders of the Rights (other than an Acquiring Person).
Amendment No. 2, which includes as exhibits the form of the Amended Right Certificate and the Summary of the Rights to Purchase Common Stock, is attached hereto as Exhibit 4.5 and incorporated by reference herein. The foregoing description of the Rights Agreement and the amended Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement as amended by Amendment No. 2.
Anti-Takeover Effects of Provisions of the Registrant’s Certificate of Incorporation and Bylaws and Delaware Law
The following provisions of SWN Delaware’s Certificate of Incorporation and Bylaws and the following provisions of Delaware law may have the effect of delaying, deterring or preventing a change of control of SWN Delaware.
Certificate of Incorporation and Bylaws
SWN Delaware’s Certificate of Incorporation and SWN Delaware’s Bylaws include provisions:
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authorizing blank check preferred stock, which SWN Delaware could issue with voting, liquidation, dividend and other rights superior to SWN Delaware’s common stock;
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limiting the liability of, and providing indemnification to, SWN Delaware’s directors and officers;
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requiring advance notice of proposals by SWN Delaware’s stockholders for business to be conducted at stockholder meetings and for nominations of candidates for election to SWN Delaware’s board of directors;
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controlling the procedures for the conduct of SWN Delaware’s board and stockholder meetings and the election, appointment and removal of SWN Delaware’s directors.
The Delaware General Corporation Law
SWN Delaware is subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.
Section 203 defines a “business combination” as a merger, asset sale or other transaction resulting in a financial benefit to an interested stockholder. Section 203 defines an “interested stockholder” as a person who, together with affiliates and associates, owns, or, in some cases, within three years prior, did own, 15% or more of the corporation’s voting stock. Under Section 203, a business combination between SWN Delaware and an interested stockholder is prohibited unless:
·
SWN Delaware’s board of directors approved either the business combination or the transaction that resulted in the stockholders becoming an interested stockholder prior to the date the person attained that status;
·
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of SWN Delaware’s voting stock outstanding at the time the transaction commenced, excluding, for purposes of determining the number of shares outstanding, shares owned by persons who are directors and also officers and shares issued under employee stock plans under which employee participants do not have the right to determine confidentially whether shares held under the plan will be tendered in a tender or exchange offer; or
·
the business combination is approved by SWN Delaware’s board of directors on or subsequent to the date the person became an interested stockholder and authorized at an annual or special meeting of the stockholders by the affirmative vote of the holders of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.
This provision has an anti-takeover effect with respect to transactions not approved in advance by SWN Delaware’s board of directors, including discouraging takeover attempts that might result in a premium over the market price for the shares of SWN Delaware’s common stock. With approval of SWN Delaware’s stockholders, SWN Delaware could amend its Certificate of Incorporation in the future to elect not to be governed by this provision. This election would be effective 12 months after the adoption of the amendment and would not apply to any business combination between SWN Delaware and any person who became an interested stockholder on or before the adoption of the amendment.
SECTION 9. Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
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 hereunto duly authorized.
| SOUTHWESTERN ENERGY COMPANY | ||||
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Dated: August 3, 2006 |
By: |
/s/ G REG D. K ERLEY |
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Name: |
Greg D. Kerley |
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Title: |
Executive Vice President and |
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Chief Financial Officer |
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EXHIBIT INDEX
AGREEMENT AND PLAN OF MERGER
OF
SOUTHWESTERN ENERGY COMPANY
(A Delaware Corporation)
AND
SOUTHWESTERN ENERGY COMPANY
(An Arkansas Corporation)
THIS AGREEMENT AND PLAN OF MERGER, dated as of June 30, 2006 (the “Agreement”), is made by and between Southwestern Energy Company, a Delaware corporation (“SWN Delaware”), and Southwestern Energy Company, an Arkansas corporation (“SWN Arkansas”). SWN Delaware and SWN Arkansas are sometimes referred to herein as the “Constituent Corporations.”
RECITALS
A. SWN Arkansas is a corporation duly organized and existing under the laws of the State of Arkansas and has an authorized capital of 230,000,000 shares, consisting of 220,000,000 shares of common stock, par value $0.10 per share and 10,000,000 shares of preferred stock, $0.01 par value per share. The preferred stock of SWN Arkansas is undesignated as to series, rights, preferences, privileges, or restrictions. As of May 31, 2006, there were 168,452,336 shares of common stock of SWN Arkansas issued and outstanding, including 790,006 shares held in treasury and no shares of preferred stock of SWN Arkansas were issued and outstanding.
B. SWN Delaware is a corporation duly organized and existing under the laws of the State of Delaware and, on the date hereof, has authorized capital of 550,000,000 shares, consisting of 540,000,000 shares of common stock, $0.01 par value per share, and 10,000,000 shares of preferred stock, $0.01 par value per share. The Preferred Stock of SWN Delaware is undesignated as to series, rights, preferences, privileges, or restrictions. As of the date hereof, 100 shares of common stock of SWN Delaware were issued and outstanding, all of which were held by SWN Arkansas, and no shares of preferred stock of SWN Delaware were issued and outstanding.
C. SWN Delaware is a wholly owned subsidiary of SWN Arkansas.
D. The Board of Directors of SWN Arkansas has determined that, for the purpose of effecting the reincorporation of SWN Arkansas in the State of Delaware, it is advisable and in the best interests of SWN Arkansas and its shareholders that SWN Arkansas
1
merge with and into SWN Delaware upon the terms and conditions provided herein (the “Merger”).
E. The respective Boards of Directors of SWN Delaware and SWN Arkansas have approved and adopted this Agreement and have directed that this Agreement be submitted to a vote of their sole stockholder and shareholders, respectively, and executed by the undersigned officers.
F. The Merger is intended to qualify as a reorganization described in Section 368(a) of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein, SWN Delaware and SWN Arkansas hereby agree, subject to the terms and conditions hereinafter set forth, as follows:
ARTICLE I
MERGER
1.1 Merger . In accordance with the provisions of this Agreement, the Delaware General Corporation Law (the “DGCL”) and the Arkansas Business Corporation Act of 1987, as amended (the “ABCA”), SWN Arkansas shall be merged with and into SWN Delaware (the “Merger”), the separate existence of SWN Arkansas shall cease, and SWN Delaware shall survive the Merger and shall continue to be governed by the laws of the State of Delaware. SWN Delaware shall be, and is sometimes referred to herein as, the “Surviving Corporation.” The name of the Surviving Corporation shall be Southwestern Energy Company.
1.2 Filing and Effectiveness . The Merger shall become effective when the following actions shall have been completed:
(a) this Agreement and the Merger shall have been adopted and approved by the stockholders of each Constituent Corporation in accordance with the requirements of the DGCL and the ABCA;
(b) all of the conditions precedent to the consummation of the Merger specified in this Agreement shall have been satisfied or duly waived by the party entitled to satisfaction thereof;
(c) an executed Certificate of Merger meeting the requirements of the DGCL shall have been filed with the Secretary of State of the State of Delaware; and
(d) this Agreement, together with an executed articles of merger, as provided in Section 4-27-1105 of the ABCA, shall have been filed with the Secretary of State of the State of Arkansas.
2
The date and time when the Merger shall become effective, as aforesaid, is herein called the “Effective Date of the Merger.”
1.3 Effect of the Merger . Upon the Effective Date of the Merger, the separate existence of SWN Arkansas shall cease and SWN Delaware, as the Surviving Corporation shall:
(i) continue to possess all of its assets, rights, powers and property as constituted immediately prior to the Effective Date of the Merger;
(ii) be subject to all actions previously taken by its and SWN Arkansas’ Board of Directors;
(iii) succeed, without other transfer, to all of the assets, rights, powers and property of SWN Arkansas in the manner more fully set forth in Section 259 of the DGCL;
(iv) continue to be subject to all of the debts, liabilities and obligations of SWN Delaware as constituted immediately prior to the Effective Date of the Merger; and
(v) succeed, without other transfer, to all of the debts, liabilities and obligations of SWN Arkansas in the same manner as if SWN Delaware had itself incurred them, all as more fully provided under the applicable provisions of the DGCL and the ABCA. Without limiting the generality of the foregoing, any claim existing or action or proceeding pending by or against Surviving Corporation or SWN Arkansas at the Effective Date of the Merger may, thereafter, be prosecuted by or against Surviving Corporation, as the surviving corporation, or, in connection with any such action or proceeding to which SWN Arkansas is a party, Surviving Corporation, as the surviving corporation, may be substituted in place of SWN Arkansas. Neither the rights of creditors nor any liens upon the property of either Surviving Corporation or SWN Arkansas shall be impaired by reason of the Merger.
ARTICLE II
CHARTER DOCUMENTS AND OFFICERS
2.1 Certificate of Incorporation . The Certificate of Incorporation of SWN Delaware as in effect immediately prior to the Effective Date of the Merger shall continue in full force and effect as the Certificate of Incorporation of the Surviving Corporation until duly amended in accordance with the provisions thereof and applicable law.
2.2 Bylaws . The Bylaws of SWN Delaware as in effect immediately prior to the Effective Date of the Merger shall continue in full force and effect as the Bylaws of the
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Surviving Corporation until duly amended in accordance with the provisions thereof and applicable law.
2.3 Directors and Officers . The directors and officers of SWN Arkansas immediately prior to the Effective Date of the Merger shall be the directors and officers of the Surviving Corporation until their successors shall have been duly elected and qualified or until as otherwise provided by law, the Certificate of Incorporation of the Surviving Corporation or the Bylaws of the Surviving Corporation.
ARTICLE III
MANNER OF CONVERSION OF STOCK
3.1 SWN Arkansas Common Stock . Upon the Effective Date of the Merger, each share of SWN Arkansas Common Stock issued and outstanding immediately prior thereto shall, by virtue of the Merger and without any action by the Constituent Corporations, the holder of such shares or any other person, be automatically converted into and exchanged for one (1) fully paid and nonassessable share of Common Stock, $0.01 par value, of the Surviving Corporation.
3.2 SWN Delaware Common Stock . Upon the Effective Date of the Merger, each share of Common Stock,$0.01 par value, of SWN Delaware issued and outstanding immediately prior thereto shall, by virtue of the Merger and without any action by SWN Delaware, the holder of such shares or any other person, be automatically canceled and returned to the status of authorized but unissued shares.
3.3 Exchange of Certificates . After the Effective Date of the Merger, each holder of an outstanding certificate representing shares of SWN Arkansas Common Stock may, at such stockholder’s option, surrender the same for cancellation to Computershare Trust Company, N.A., as exchange agent (the “Exchange Agent”), and each such holder shall be entitled to receive in exchange therefor a certificate or certificates representing the number of shares of the Surviving Corporation’s Common Stock into which the surrendered shares were converted as provided herein. Unless and until so surrendered, each outstanding certificate theretofore representing shares of SWN Arkansas common stock, par value $0.10 per share, shall be deemed for all purposes to represent the number of shares of the Surviving Corporation’s common stock, par value $0.01 per share, into which such shares of SWN Arkansas common stock were converted in the Merger.
The registered owner on the books and records of the Surviving Corporation or the Exchange Agent of any shares of stock represented by such outstanding certificate shall, until such certificate shall have been surrendered for transfer or conversion or otherwise accounted for to the Surviving Corporation or the Exchange Agent, have and be entitled to exercise any voting and other rights with respect to, and to receive
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dividends and other distributions upon the shares of Common Stock of the Surviving Corporation represented by, such outstanding certificate as provided above.
Each certificate representing common stock of the Surviving Corporation so issued in the Merger shall bear the same legends, if any, with respect to the restrictions on transferability as the certificates of SWN Arkansas so converted and given in exchange therefore, unless otherwise determined by the Board of Directors of the Surviving Corporation in compliance with applicable laws, or other such additional legends as agreed upon by the holder and the Surviving Corporation. If any certificate for shares of SWN Delaware stock is to be issued in a name other than that in which the certificate surrendered in exchange therefor is registered, it shall be a condition of issuance thereof that the certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer, that such transfer otherwise be proper and comply with applicable securities laws and that the person requesting such transfer pay to SWN Delaware or the Exchange Agent any transfer or other taxes payable by reason of issuance of such new certificate in a name other than that of the registered holder of the certificate surrendered or establish to the satisfaction of SWN Delaware that such tax has been paid or is not payable.
ARTICLE IV
OPTIONS AND RIGHTS
4.1 Options . Upon the Effective Date, (a) SWN Delaware will assume and continue all of SWN Arkansas’ stock option plans, including but not limited to the 2004 Stock Incentive Plan, the 2002 Employee Stock Incentive Plan, the 2000 Stock Incentive Plan, the 1993 Stock Incentive Plan and the 1993 Stock Incentive Plan for Outside Directors, and all of the outstanding and unexercised portions of all options and rights to buy common stock, par value $0.10 per share, of SWN Arkansas shall become options or rights for the same number of shares of common stock, par value $0.01 per share, of SWN Delaware, with no other changes in the terms and conditions of such options or rights, including exercise prices, and effective upon the Effective Date, SWN Delaware hereby assumes the outstanding and unexercised portions of such options and rights and the obligations of SWN Arkansas with respect thereto and (b) one share of SWN Delaware common stock shall be reserved for issuance under the stock option plans of SWN Delaware from and after the Effective Date of the Merger for each one full share of common stock of SWN Arkansas reserved for issuance under the stock option plans of SWN Arkansas immediately prior to the Effective Date of the Merger.
4.2 Other Employee Benefit Plans . Upon the Effective Date, SWN Delaware will assume and continue all obligations of SWN Arkansas under any and all employee benefit plans in effect as of the Effective Date of the Merger or with respect to which employee rights or accrued benefits are outstanding as of the Effective Date, including but not limited to, the 401(k) Savings Plan, the Incentive Compensation Plan, the Supplemental Retirement Plan (including the related Supplemental Retirement Plan Trust) and the Non-Qualified Retirement Plan.
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4.3 Rights Plan . Upon the Effective Date, SWN Delaware will assume and continue all obligations of SWN Arkansas and will assume all rights outstanding under the Amended and Restated Rights Agreement between Southwestern Energy Company and the First Chicago Trust Company of New York dated April 12, 1999, as amended by Amendment No. 1 to the Amended and Restated Rights Agreement between Southwestern Energy Company and Equiserve Trust Company as successor to the First Chicago Trust Company of New York dated March 15, 2002.
ARTICLE V
GENERAL
5.1 Covenants of SWN Delaware . SWN Delaware covenants and agrees that it will, on or before the Effective Date of the Merger:
(a) file the Certificate of Merger with the Secretary of State of the State of Delaware;
(b) file this Agreement, together with an executed articles of merger, as provided in Section 4-27-1105 of the ABCA, with the Secretary of State of the State of Arkansas; and
(c) take such other actions as may be required by the DGCL or the ABCA, including in respect of dissenting shareholders of SWN Arkansas.
5.2 Further Assurances . From time to time, as and when required by the Surviving Corporation or by its successors or assigns, there shall be executed and delivered on behalf of SWN Arkansas such deeds and other instruments, and there shall be taken or caused to be taken by the Surviving Corporation and SWN Arkansas such further and other actions as shall be appropriate or necessary in order to vest or perfect in or conform of record or otherwise by the Surviving Corporation, the title to and possession of all the property, interests, assets, rights, privileges, immunities, powers, franchises and authority of SWN Arkansas and otherwise to carry out the purposes of this Agreement, and the officers and directors of the Surviving Corporation are fully authorized in the name and on behalf of SWN Arkansas or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.
5.3 Abandonment . At any time before the Effective Date of the Merger, this Agreement may be terminated and the Merger may be abandoned for any reason whatsoever by the Board of Directors of either SWN Arkansas or SWN Delaware, or both, notwithstanding the approval of this Agreement by the shareholders of SWN Arkansas or the sole stockholder of SWN Delaware or both.
5.4 Amendment . The Boards of Directors of the Constituent Corporations may amend this Agreement at any time prior to the filing of this Agreement (or certificate in
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lieu thereof) with the Secretaries of State of the States of Delaware and Arkansas, provided that an amendment made subsequent to the adoption of this Agreement by the stockholder of either Constituent Corporation shall not unless approved by the stockholders as required by law: (i) alter or change the amount or kind of shares, securities, cash, property and/or rights to be received in exchange for or on conversion of all or any of the shares of any class or series thereof of such Constituent Corporation; (ii) alter or change any term of the Certificate of Incorporation of the Surviving Corporation to be effected by the Merger; or (iii) alter or change any of the terms and conditions of this Agreement if such alteration or change would adversely affect the holders of any class or series of capital stock of any Constituent Corporation.
5.5 Dissenting Shareholders . The Surviving Corporation will promptly pay to any dissenting shareholders of SWN Arkansas the amount, if any, to which they shall be entitled under Section 4-27-1301 et seq. of the Arkansas Business Corporation Act with respect to the rights of dissenting shareholders.
5.6 Agreement . Executed copies of this Agreement will be on file at the principal place of business of the Surviving Corporation at 2350 North Sam Houston Parkway East, Suite 300, Houston, Texas 77032.
5.7 Governing Law . This Agreement shall be governed by the laws of the State of Delaware, excluding applicable conflict-of-laws principles, except to the extent the laws of the State of Arkansas must be applied pursuant to the relevant conflict-of-laws principles.
5.8 Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which, together, shall constitute the same instrument.
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IN WITNESS WHEREOF, the parties hereto executed this Agreement as of the day and year first written above.
SOUTHWESTERN ENERGY COMPANY,
an Arkansas corporation
By: /s/ Greg D. Kerley
Name: Greg D. Kerley
Title: Executive Vice President & Chief Financial
Officer
SOUTHWESTERN ENERGY COMPANY,
a Delaware corporation
By: /s/ Greg D. Kerley
Name: Greg D. Kerley
Title: Executive Vice President & Chief Financial
Officer
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CERTIFICATE OF INCORPORATION
OF
SOUTHWESTERN ENERGY COMPANY
FIRST: The name of the Corporation is Southwestern Energy Company (the “Corporation”).
SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the “GCL”).
FOURTH: (a) Authorized Capital Stock . The total number of shares of stock which the Corporation shall have authority to issue is 550,000,000 shares of capital stock, consisting of (i) 540,000,000 shares of common stock, $0.01 par value (the “Common Stock”), and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”).
(b) No Cumulative Voting . The holders of shares of Common Stock shall not have cumulative voting rights.
(c) No Preemptive or Subscription Rights . No holder of shares of Common Stock shall be entitled to preemptive or subscription rights.
(d) Preferred Stock . The Board of Directors is hereby expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions; provided , however , that no shares of any series of Preferred Stock shall be issued without the approval of the Company’s shareholders if (A) the voting rights of the shares of such series would be materially disproportionate to the voting rights of the shares of the Company’s Common Stock or (B) the shares of
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such series would be convertible into a materially disproportionate number of shares of Common Stock, in each case taking into account the issue price of the shares of such series and the fair market value of the shares of Common Stock at the time of such issuance.
FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
(a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(b) The number of directors of the Company shall be fixed by the bylaws and may be increased or decreased from time to time in the manner specified therein; provided , however , that the number of directors shall not be less than three. Election of directors need not be by ballot.
(c) A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.
(d) Subject to the terms of any one or more classes or series of Preferred Stock, any vacancy on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. If the vacancy arose from an increase in the number of directors, the newly elected director will hold office until the next annual meeting or until his or her successor shall be elected and shall qualify. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any or all of the directors of the Corporation may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the Corporation’s then outstanding capital stock entitled to vote generally in the election of directors.
(e) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL, this Certificate of Incorporation, and any By-Laws adopted by the Board of Directors or the stockholders; provided , however , that no By-Laws hereafter adopted by the Board of Directors or the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.
SIXTH: No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the GCL as the same exists or may hereafter be amended. If the GCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the GCL, as so amended. Any repeal or modification of this Article SIXTH shall not adversely affect any right or protection of a director of the Corporation existing at the
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time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
SEVENTH: The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives. The right to indemnification conferred by this Article SEVENTH shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.
The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article SEVENTH to directors and officers of the Corporation.
The rights to indemnification and to the advance of expenses conferred in this Article SEVENTH shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation, the By-Laws of the Corporation, any statute, agreement, vote of stockholders or disinterested directors or otherwise. Any repeal or modification of this Article SEVENTH shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
EIGHTH: Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation, and the ability of the stockholders to consent in writing to the taking of any action is hereby specifically denied.
NINTH: Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
TENTH: Unless otherwise required by law, Special Meetings of Stockholders, for any purpose or purposes, may only be called by (i) the Chairman of the Board of Directors, if there be one, (ii) the President, (iii) the Secretary, (iv) the Board of Directors or (v) holders of twenty-five percent (25%) or more of the voting shares of the Corporation.
ELEVENTH: Unless otherwise required by law, stockholders shall be permitted to act by written consent in lieu of a meeting if the consent is signed by the number of stockholders necessary to authorize such action at a meeting where all shares entitled to vote thereon were present and voted; provided , however , that if the stockholder action is on a proposal that would have the effect of increasing the Corporation’s capital stock or indebtedness, such action may only be taken by written consent without a meeting upon the unanimous consent of all the Corporation’s shareholders.
TWELFTH: In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power to adopt, amend, alter or repeal the
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Corporation’s By-Laws. The affirmative vote of at least a majority of the entire Board of Directors shall be required to adopt, amend, alter or repeal the Corporation’s By-Laws. The Corporation’s By-Laws also may be adopted, amended, altered or repealed by the affirmative vote of the holders of at least a majority of the voting power of the shares entitled to vote at an election of directors.
THIRTEENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed in this Certificate of Incorporation, the Corporation’s By-Laws or the GCL, and all rights herein conferred upon stockholders are granted subject to such reservation.
FOURTEENTH: The name and mailing address of the Sole Incorporator is as follows:
Name:
Address:
Trecia M. Canty
2350 North Sam Houston Parkway East, Suite 300
Houston, Texas 77032
I, THE UNDERSIGNED, being the Sole Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the GCL, do make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 24 th day of February, 2006.
/s/ Trecia M. Canty
Name: Trecia M. Canty
Title: Sole Incorporator
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BYLAWS
OF
SOUTHWESTERN ENERGY COMPANY
(A Delaware Corporation)
Effective February 24, 2006
BYLAWS
OF
SOUTHWESTERN ENERGY COMPANY
(hereinafter called the “Corporation”)
ARTICLE I
OFFICES
1.1 Registered Office . The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware.
1.2 Other Offices . The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 Place of Meetings . Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors.
2.2 Annual Meetings . The Annual Meeting of Stockholders of the Corporation (the “Annual Meeting”) for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the Annual Meeting.
2.3 Nature of Business at Meetings of Stockholders . No business may be transacted at an Annual Meeting, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the Annual Meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.3 and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting and (ii) who complies with the notice procedures set forth in this Section 2.3.
At any meeting of stockholders, only such business shall be conducted as shall have been properly brought before the meeting. For business to be properly brought
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before a meeting by a stockholder, the stockholder must have given timely notice thereof to the Secretary of the Corporation. To be timely, such notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 50 nor more than 60 days prior to the meeting date; provided, however, that in the event that less than 45 days' notice of the meeting date is given to stockholders, notice by the stockholder must be so received no later than the close of business on the 15th day following the day on which notice of the meeting date was mailed.
Such stockholder's notice shall set forth as to each matter the stockholder proposes to bring before the meeting: (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and address of the stockholder proposing such business, (iii) the class and number of shares of capital stock of the Corporation that are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting. The presiding officer of the meeting shall, if the facts warrant, determine that business was not properly brought before the meeting in accordance with the foregoing procedure and, if he should so determine, he may so declare to the meeting and any such business not properly brought shall not be transacted. Notwithstanding the provisions of this paragraph, so long as the Corporation is subject to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), business consisting of a proposal properly included in the Corporation's proxy statement with respect to a meeting pursuant to such Rule may be transacted at a meeting.
2.4 Nomination of Directors . Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation with respect to the right of holders of preferred stock of the Corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors at any Annual Meeting, or at any Special Meeting of Stockholders called for the purpose of electing directors, may be made (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.4 and on the record date for the determination of stockholders entitled to notice of and to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 2.4.
In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 50 nor more than 75 days prior to the meeting date; provided , however , that in the event that less than 45 days’ notice of the meeting date is given to stockholders,
notice by the stockholder must be so received no later than the close of business on the 15th day following the day on which notice of the meeting date was mailed. Such stockholder's notice shall set forth (a) as to each nominee whom the stockholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of the nominee, (ii) the principal occupation or employment of the nominee, (iii) the class and number of shares of capital stock of the Corporation that are owned beneficially or of record by the nominee and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice, (i) the name and record address of the stockholder, (ii) the class and number of shares of capital stock of the Corporation that are beneficially owned by the stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder and (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. The presiding officer of the meeting shall, if the facts warrant, determine that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he may so declare to the meeting and the defective nomination shall be disregarded.
2.5 Special Meetings . Unless otherwise required by law or by the Certificate of Incorporation, Special Meetings of Stockholders, for any purpose or purposes, may be called by either (i) the Chairman, (ii) the President, (iii) the Secretary, (iv) the Board of Directors or (v) holders of twenty-five percent (25%) or more of the voting shares of the Corporation. At a Special Meeting of Stockholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto).
2.6 Notice . Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a Special Meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law, written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to notice of and to vote at such meeting. Whenever any notice is required by these By-Laws to be given, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in a post office box in a sealed postage paid wrapper, addressed to the person entitled thereto at his last known post office address, and such notice shall be deemed to have been given on the date of such mailing. Any notice required to be given under these By-Laws may be waived by the person entitled thereto. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute.
2.7 Adjournments . Any meeting of the stockholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting in accordance with the requirements of Article VI hereof shall be given to each stockholder of record entitled to notice of and to vote at the meeting.
2.8 Quorum . Unless otherwise required by applicable law or the Certificate of Incorporation, the holders of a majority of the Corporation's capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 2.7 hereof, until a quorum shall be present or represented.
2.9 Voting . Unless otherwise required by law, the Certificate of Incorporation or these By-Laws, any question, with the exception of the election of directors, brought before any meeting of the stockholders shall be decided by the vote of the holders of a majority of the total number of votes of the Corporation’s capital stock represented and entitled to vote thereat, voting as a single class. Directors shall be elected by a plurality of voting power of the total number of votes of the Corporation’s capital stock represented and entitled to vote thereat, voting as a single class. Unless otherwise provided in the Certificate of Incorporation, and subject to Section 2.12 of this Article II, each stockholder represented at a meeting of the stockholders shall be entitled to cast one (1) vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy as provided in Section 2.11 of this Article II. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of the stockholders, in such officer's discretion, may require that any votes cast at such meeting shall be cast by written ballot.
2.10 Proxies . Each stockholder entitled to vote at a meeting of the stockholders may authorize another person or persons to act for such stockholder as proxy, but no such proxy shall be voted upon after three years from its date, unless such proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute a valid means by which a stockholder may grant such authority:
(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder's authorized officer, director, employee or agent signing such writing or
causing such person's signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such telegram, cablegram or transmission, provided that any such telegram or cablegram must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information on which they relied.
Any copy, facsimile telecommunication or other reliable reproduction of the writing, telegram, cablegram or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing, telegram, cablegram or transmission for any and all purposes for which the original writing, telegram, cablegram or transmission could be used; provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing, telegram, cablegram or transmission.
2.11 List of Stockholders Entitled to Vote . The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting (i) either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held or (ii) during ordinary business hours, at the principal place of business of the Corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
2.12 Record Date . In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10)
days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply
to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
2.13 Stock Ledger . The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 2.11 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.
2.14 Conduct of Meetings . The Board of Directors of the Corporation may adopt by resolution such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the presiding officer of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding officer, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the presiding officer of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.
2.15 Inspectors of Election . In advance of any meeting of the stockholders, the Board of Directors, by resolution, the Chairman or the President shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the presiding officer of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector's ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.
ARTICLE III
DIRECTORS
3.1 Number, Quorum, Qualifications and Retirement . (a) The Board of Directors shall consist of not less than six (6) nor more than ten (10) members. The number of directors shall be fixed from time to time by resolution of a majority of the entire Board, provided that changes in the size of the Board of more than thirty percent (30%) above or below the established range may only be adopted with the approval of holders of a majority of the Corporation’s outstanding voting stock. A majority of the directors shall constitute a quorum for the transaction of business. Directors need not be stockholders.
(b) Retired directors may be appointed to the position of director emeritus by the unanimous vote of the board or after having 20 years of service and shall be invited, but not required, to attend the Annual Meeting and shall be available for consultation with management as required. Only existing non-employee members of the board of directors are eligible to become directors emeriti. Employee members of the board of directors will become eligible for the position of director emeritus after their employee status has ended. Any director becoming a director emeritus is no longer eligible for election as a director. A director emeritus may resign at any time.
3.2 Vacancies . Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy resulting from an increase in the number of directors shall hold office for a term that shall coincide with the remaining term of other directors. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor.
3.3 Duties and Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws required to be exercised or done by the stockholders.
3.4 Meetings . The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, if there be one, the President, or by any two directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.
3.5 Organization . At each meeting of the Board of Directors, the Chairman of the Board of Directors, or, in his or her absence, a director chosen by a majority of the directors present, shall act as chairman. The Secretary of the Corporation shall act as secretary at each meeting of the Board of Directors. In case the Secretary shall be absent from any meeting of the Board of Directors, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the
Secretary and all the Assistant Secretaries, the presiding officer of the meeting may appoint any person to act as secretary of the meeting.
3.6 Resignations and Removals of Directors. Any director of the Corporation may resign at any time, by giving notice in writing to the Chairman of the Board of Directors, the President or the Secretary of the Corporation. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Except as otherwise required by applicable law and subject to the rights, if any, of the holders of shares of preferred stock then outstanding, any director or the entire Board of Directors may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority in voting power of the issued and outstanding capital stock of the Corporation entitled to vote in the election of directors.
3.7 Quorum . Except as otherwise required by law or the Certificate of Incorporation, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.
3.8 Actions of the Board by Written Consent . Unless otherwise provided in the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.
3.9 Meetings by Means of Conference Telephone . Unless otherwise provided in the Certificate of Incorporation or these By-Laws, members of the Board of Directors of the Corporation, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.9 shall constitute presence in person at such meeting.
3.10 Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required.
3.11 Compensation . The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary for service as director, payable in cash or securities. A director emeritus shall receive an annual fee of $2,000 for the remainder of his life and such health care benefits as the Corporation provides to its full time employees. No such payment shall preclude any director or director emeritus from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.
3.12 Executive Committee . The directors may appoint from their number an executive committee which may make its own rules of procedure and shall meet where and as provided by such rules, or by a resolution of the directors. A majority shall constitute a quorum, and in every case the affirmative vote of a majority of all the members of the committee shall be necessary to the adoption of any resolution. During the intervals between the meetings of the directors the executive committee shall have and may exercise all the powers of the directors in the management of the business and affairs of the Corporation, including power to authorize the seal of the Corporation to be affixed to all papers which may require it, in such manner as such committee shall deem best for the interests of the Corporation, in all cases in which specific directions shall not have been given by the directors.
ARTICLE IV
OFFICERS
4.1 General . The officers of the Corporation may be a Chairman of the Board, which office may be filled by resolution of the Board of Directors, and shall be a
President, one or more Vice Presidents, one or more of whom may be designated as Executive Vice President and shall have senior authority, a Secretary, a Treasurer, and such assistants and other officers as may from time to time be elected or appointed by the Board of Directors. Two or more offices may be held by the same person.
4.2 Chairman of the Board of Directors . The Chairman of the Board of Directors shall preside at all meetings of the stockholders and of the Board of Directors; and by virtue of his office shall be a member of the executive committee. He shall have supervision of such matters as may be designated to him by the Board of Directors or the executive committee.
4.3 Vice Chairman of the Board of Directors . The Vice Chairman of the Board of Directors shall be vested with all the powers and shall perform all the duties of the Chairman in the absence or disability of the latter unless or until the Board
of Directors shall otherwise determine. He shall have such other powers and perform such other duties as shall be prescribed by the Board of Directors.
4.4 President . The President shall, in the absence of a Chairman of the Board, preside at all meetings of the directors, and act as Chairman at, and call to order all meetings of the stockholders; and he shall have power to call special meetings of the stockholders and directors for any purpose or purposes, appoint and discharge, subject to the approval of the directors, employees and agents of the Corporation, make and sign contracts and agreements in the name and behalf of the Corporation, except that he be not authorized to dispose or encumber material assets of the Corporation without the authority of the Board of Directors, and while the directors and/or committees are not in session he shall have general management and control of the business and affairs of the Corporation; he shall see that the books, reports, statements and certificates required by the statute under which this Corporation is organized or any other laws applicable thereto are properly kept, made and filed according to law; and he shall generally do and perform all acts incident to the office of President, or which are authorized or required by law.
4.5 Vice President . The Vice Presidents in the order of their seniority shall be vested with all the powers and shall perform all the duties of the President in the absence or disability of the latter, unless or until the directors shall otherwise determine. They shall have such other powers and perform such other duties as shall be prescribed by the directors.
4.6 Secretary . The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and directors, and all other notices required by law or by these By-Laws, and in case of his absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the President, or by the directors or stockholders upon whose requisition the meeting is called as provided in these By-Laws. He shall record all proceedings of the meetings of the Corporation and of the directors in a book to be kept for that purpose, and shall perform such other duties as may be assigned to him by the directors or the President. He shall have custody of the seal of the Corporation and shall affix the same to all instruments requiring it, when authorized by the directors or the President, and attest the same. He shall be sworn to the faithful discharge of his duties.
4.7 Assistant Secretary . The Assistant Secretary shall be vested with the powers and shall perform all the duties of Secretary in the absence or disability of the latter, unless or until the directors shall otherwise determine. He shall have such other powers and perform such other duties as shall be prescribed by the directors.
4.8 Treasurer . The Treasurer shall have the custody of all funds, securities, evidences of indebtedness and other valuable documents of the Corporation; he shall receive and give or cause to be given receipts and acquittances for moneys paid in on account of the Corporation and shall pay out of the funds on hand all just debts of the Corporation of whatever nature upon maturity of the same; he shall enter or cause to be entered in books of the Corporation to be kept for that purpose full and accurate accounts of all monies received and paid out on account of the Corporation, and, whenever required by the President or the Board of Directors, he shall render a statement of his cash accounts. He shall, unless otherwise determined by the Board of Directors, have charge of the original stock books, transfer books and stock ledgers and act as transfer agent in respect of the stock and securities of the Corporation; he shall prepare and submit from time to time to the Board of Directors financial, cash and operating budgets or estimates; he shall prepare and submit such other financial data and information as he shall be directed to by the Board of Directors; and he shall perform all of the other duties incident to the office of Treasurer. He shall give the Corporation a bond for the faithful discharge of his duties in such amount and with such surety as the Board of Directors shall prescribe.
4.9 Assistant Treasurer . The Assistant Treasurer shall be vested with all the powers and shall perform all the duties of Treasurer in the absence or disability of the latter, unless or until the directors shall otherwise determine. He shall have such other powers and perform such other duties as shall be prescribed by the directors.
4.10 Controller . The Corporate Controller shall be responsible for directing the Corporation's accounting functions. Specific areas include the development and maintenance of planning and budgeting systems, analysis and interpretation of trends requiring management's attention, the preparation of financial and management reports and procedures, and senior management. Ancillary responsibilities include the supervision of external auditors, and participation in the planning and execution of the utility rate cases.
4.11 Other Officers . Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.
4.12 Voting Securities Owned by the Corporation . Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President or any other officer authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation,
take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.
ARTICLE V
STOCK
5.1 Form of Certificates . Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation (i) by the Chairman of the Board of Directors, or the President or a Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by such stockholder in the Corporation.
5.2 Signatures . Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
5.3 Lost Certificates . The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner's legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate.
5.4 Transfers . Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these By-Laws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by such person's attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; provided, however, that such surrender and endorsement or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. Every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary
or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.
5.5 Dividend Record Date . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
5.6 Record Owners . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether
or not it shall have express or other notice thereof, except as otherwise required by law.
5.7 Transfer and Registry Agents. The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.
ARTICLE VI
NOTICES
6.1 Notices . Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person's address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telex or cable.
6.2 Waivers of Notice . Whenever any notice is required by applicable law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any Annual or Special Meeting or any regular or special meeting of the directors or members of
a committee of directors need be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these By-Laws.
ARTICLE VII
GENERAL PROVISIONS
7.1 Dividends . Dividends upon the capital stock of the Corporation, subject to the requirements of the General Corporation Law of the State of Delaware (the “DGCL”) and the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with Section 3.8 hereof), and may be paid in cash, in property, or in shares of the Corporation's capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.
7.2 Disbursements . All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
7.3 Fiscal Year . The fiscal year of the Corporation shall end on December 31 of each year unless changed by resolution of the Board of Directors.
7.4 Corporate Seal . The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION
8.1 Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation . Subject to Section 8.3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation),
by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful.
8.2 Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation . Subject to Section 8.3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
8.3 Authorization of Indemnification . Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Sections 8.1 and 8.2, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such
determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.
8.4 Good Faith Defined . For purposes of any determination under Section 8.3, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person's conduct was unlawful, if such person's action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 8.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Sections 8.1 and 8.2, as the case may be.
8.5 Indemnification by a Court . Notwithstanding any contrary determination in the specific case under Section 8.3, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 8.1 and 8.2. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Sections 8.1 and 8.2, as the case may be. Neither a contrary determination in the specific case under Section 8.3 nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 8.5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.
8.6 Expenses Payable in Advance . Expenses (including attorneys' fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.
8.7 Nonexclusivity of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, these By-Laws, any agreement, a vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 8.1 and 8.2 shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Sections 8.1 and 8.2 but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.
8.8 Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.
8.9 Certain Definitions . For purposes of this Article VIII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. The term “other enterprise” as used in this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such
person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.
8.10 Survival of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
8.11 Indemnification of Employees and Agents . The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
9.1 Amendments . These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by the stockholders or by the Board of Directors; provided, however, that notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such meeting of the stockholders or Board of Directors, as the case may be. All such amendments must be approved by either the holders of at least a majority of the outstanding capital stock entitled to vote thereon or by a majority of the entire Board of Directors then in office.
9.2 Entire Board of Directors . As used in this Article IX and in these By-Laws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.
* * *
Adopted as of: February 24, 2006
FIRST AMENDMENT AND CONSENT
THIS FIRST AMENDMENT AND CONSENT (this “ Amendment ”) dated as of June 29, 2006 amends the Amended and Restated Credit Agreement dated as of January 4, 2005 (the “ Credit Agreement ”) among SOUTHWESTERN ENERGY COMPANY, various Lenders and JPMORGAN CHASE BANK, N.A., as Administrative Agent. Capitalized terms used but not defined herein have the respective meanings set forth in the Credit Agreement.
WHEREAS, the Borrower has advised the Lenders and the Administrative Agent that it intends to reincorporate as a Delaware corporation by means of a merger of the Borrower with and into a wholly owned Subsidiary, Southwestern Energy Company, a Delaware corporation, as more fully described in the Definitive Notice & Proxy Statement (the “ Proxy Statement ”) filed by the Borrower with the SEC on March 30, 2006 (such transaction, the “ Reincorporation ”); and
WHEREAS, the Borrower has requested that the Lenders consent to, and amend the Credit Agreement to acknowledge, the Reincorporation;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 CONSENT . The Lenders consent to the Reincorporation so long as (a) the Reincorporation occurs substantially as described in the Proxy Statement and (b) concurrently with the completion of the Reincorporation, the surviving entity delivers to the Administrative Agent an Acknowledgement and Assumption substantially in the form of Exhibit A and a Confirmation substantially in the form of Exhibit B .
SECTION 2 AMENDMENT . The parties hereto agree that, on the date of the Reincorporation, the definition of “Borrower” set forth in Section 1.1 of the Credit Agreement shall be amended in its entirety to read as follows:
“Borrower” means Southwestern Energy Company, a Delaware corporation, and its successors and assigns.
SECTION 3 EFFECTIVENESS . This Amendment shall become effective on the date on which the Administrative Agent has received counterparts of this Amendment signed by the Borrower, the Administrative Agent and the Required Lenders.
SECTION 4 MISCELLANEOUS .
SECTION 4.1 Continuing Effectiveness, etc. As herein amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects.
SECTION 4.2 Counterparts . This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment. Delivery to the Administrative Agent of a counterpart hereof, or a signature page hereto, by facsimile shall be effective as an original, manually-signed counterpart.
SECTION 4.3 Governing Law . This Amendment shall be a contract made under and governed by the internal laws of the State of Illinois.
SECTION 4.4 Successors and Assigns . This Amendment shall be binding upon the Borrower, the Lenders and the Agents and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Lenders and the Agents and the successors and assigns of the Lenders and the Agents.
[ Signature Pages Follow ]
SOUTHWESTERN ENERGY COMPANY
By: /s/ Greg D. Kerley
Greg D. Kerley
Executive Vice President and
Chief Financial Officer
JPMORGAN CHASE BANK, NA,
as Administrative Agent
By: /s/ Robert Traband
Robert Traband
Vice President
SUNTRUST BANK
By:
/s/ Sean Roche
Sean Roche
Vice President
ROYAL BANK OF CANADA
By: /s/ Jason York
Jason York
Attorney-in-Fact
BANK OF AMERICA, N.A.
By:
Name:
Title
THE ROYAL BANK OF SCOTLAND plc
By: /s/ David Slye
David Slye
Vice President
THE BANK OF TOKYO MITSUBISHI UFJ, LTD.
By: /s/ Takeshi Takahashi
Takeshi Takahashi
Senior Vice President & Group Head
HARRIS NESBITT FINANCING, INC.
By:
Name Printed:
Title:
WELLS FARGO BANK, N.A.
By: /s/ E. Marc Cuenod, Jr.
E. March Cuenod, Jr.
Vice President & Relationship Manager
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Kathryn A. Gaiter
Kathryn A. Gaiter
Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Thomas Rajan
Thomas Rajan
Senior Vice President
COMERICA BANK
By: /s/ Huma Vadgama
Huma Vadgama
Vice President
MIZUHO CORPORATE BANK, LTD.
By:
Name Printed:
Title:
COMPASS BANK
By: /s/ Dorothy Marchand
Dorothy Marchand
Senior Vice President
ARVEST BANK
By: /s/ Craig A. Shy
Craig A. Shy
Senior Vice President
HIBERNIA BANK
By:
Name Printed:
Title:
BANK OF ARKANSAS
By:
Name Printed:
Title:
EXHIBIT A
FORM OF ACKNOWLEDGEMENT AND ASSUMPTION
Dated as of [___________], 2006
To:
JPMorgan Chase Bank, N.A.., individually and as administrative agent (in such capacity, the “ Administrative Agent ”), and the other financial institutions that are parties to the Amended and Restated Credit Agreement referred to below
Please refer to (i) the Amended and Restated Credit Agreement dated as of January 4, 2005 (the “ Credit Agreement ”) among Southwestern Energy Company, various Lenders and JPMorgan Chase Bank, N.A., as Administrative Agent; and (ii) the First Amendment and Consent dated as of May __, 2006 (the “ First Amendment ”) to the Credit Agreement. Capitalized terms used but not defined herein have the respective meanings set forth in the Credit Agreement.
The undersigned, Southwestern Energy Company, a Delaware corporation, hereby (a) acknowledges that pursuant to the Reincorporation (as defined in the First Amendment), the undersigned has become the “Borrower” under the Credit Agreement; (b) assumes all obligations of the “Borrower” under the Credit Agreement; and (c) represents and warrants that the Credit Agreement, each Note and each LC Application are legal valid and binding obligations of the undersigned, enforceable against the undersigned in accordance their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Acknowledgement and Assumption as of the date and year first written above.
SOUTHWESTERN ENERGY COMPANY,
a Delaware corporation
By:
Name Printed:
Title:
EXHIBIT B
FORM OF CONFIRMATION
Dated as of [___________], 2006
To:
JPMorgan Chase Bank, N.A.., individually and as administrative agent (in such capacity, the “ Administrative Agent ”), and the other financial institutions that are parties to the Amended and Restated Credit Agreement referred to below
Please refer to (i) the Amended and Restated Credit Agreement dated as of January 4, 2005 (the “ Credit Agreement ”) among Southwestern Energy Company, various financial institutions and the Administrative Agent; (ii) the First Amendment and Consent dated as of May [__], 2006 (the “ First Amendment ”) to the Credit Agreement and (iii) the Subsidiary Guaranty dated as of January 4, 2005 (the “ Subsidiary Guaranty ”) issued by the undersigned pursuant to the Credit Agreement.
Each of the undersigned confirms to the Lenders (as defined in the Credit Agreement) and the Administrative Agent that after giving effect to the Reincorporation (as defined in the First Amendment), (a) the Subsidiary Guaranty shall continue in full force and effect as a legal, valid and binding obligation of such undersigned, enforceable against such undersigned in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally; and (ii) all references in the Subsidiary Guaranty to the “Company” shall be references to Southwestern Energy Company, a Delaware corporation and the survivor of the merger that accomplishes the Reincorporation.
IN WITNESS WHEREOF, the undersigned have executed this Confirmation as of the date first above written.
SOUTHWESTERN ENERGY SERVICES COMPANY
SOUTHWESTERN ENERGY PRODUCTION COMPANY
SEECO, INC.
By:
Name Printed:
Title:
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this “ Supplemental Indenture ”) executed as of June 30, 2006 by and among Southwestern Energy Company, an Arkansas corporation (the “ Company ”), between the Company and The First National Bank of Chicago, as trustee (the “ Indenture ”), and (ii) execution and delivery by Southwestern and the Company of the First Supplemental Indenture (“ Supplemental Indenture ”), dated as of June 30, 2006, by and among Southwestern, the Company, and J.P. Morgan Trust Company, N.A. (as successor to The First National Bank of Chicago), as Trustee (the “ Trustee ”). Capitalized terms used herein and not defined shall have the meanings ascribed to them in that certain the Company and The First National Bank of Chicago, dated as of December 1, 1995 (the “ Indenture ”) between the Company and the Trustee.
R E C I T A L S :
WHEREAS, the Company has issued the following series of note: (i) the 7.625% Medium-Term Notes due 2027; (ii) the 7.125% Fixed Rate Notes due October 10, 2017; and (iii) the 7.35% Fixed Rate Notes due October 2, 2017 (collectively, the “ Notes ”) pursuant to the terms of the Indenture;
WHEREAS, effective as of the date hereof, the Company is merging, pursuant Article 7 of the Indenture, with and into Southwestern Delaware (the “ Merger ”), with Southwestern Delaware surviving the Merger;
WHEREAS, the Transfer is a permitted transaction pursuant to Section 7.1 provided that the surviving entity expressly assumes, by a supplemental indenture, all obligations of the Company under the Securities and the Indenture;
WHEREAS, Southwestern Delaware desires to become the successor to the Company with respect to the Notes and the Indenture as contemplated by Section 7.1 of the Indenture;
WHEREAS, Section 8.1 of the Indenture provides that the Company, when authorized by a resolution of its board of directors, and the Trustee may enter into indentures supplemental to the Indenture without the consent of the Holders; and
WHEREAS, the execution and delivery of this Supplemental Indenture has been duly authorized by the parties hereto, and all other acts necessary to make this Supplemental Indenture a valid and binding supplement to the Indenture, effectively supplementing the Indenture as set forth herein, have been duly taken;
NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, it is mutually agreed, for the equal and proportionate benefit of all Holders, as follows:
ARTICLE ONE
1.1
Upon the effectiveness of the Merger, Southwestern Delaware agrees to assume all obligations of the Company under the Securities (including, but not limited to, the Notes) and the Indenture.
ARTICLE TWO
2.1
All of the provisions of this Supplemental Indenture shall be deemed to be incorporated in, and made part of, the Indenture, and the Indenture, as amended and supplemented by this Supplemental Indenture, shall be read, taken and construed as one and the same instrument and shall be binding upon all the Holders.
2.2
This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
2.3
In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
2.4
Nothing in this Supplemental Indenture, express or implied, shall give any person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture. Except as expressly supplemented or amended as set forth in this Supplemental Indenture, the Indenture is hereby ratified and confirmed, and all the terms, provisions and conditions thereof shall be and continue in full force and effect. The Trustee accepts the trusts created by the Indenture, as amended and supplemented by this Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Indenture as amended and supplemented by this Supplemental Indenture.
2.5
The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture, except with respect to the execution hereof by the Trustee, or for or in respect of the recitals contained herein, all of which are made solely by the Company and Southwestern Delaware.
2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the day and year first written above.
SOUTHWESTERN ENERGY COMPANY,
an Arkansas corporation
By: /s/ Greg D. Kerley
Greg D. Kerley
Executive Vice President &
Chief Financial Officer
SOUTHWESTERN ENERGY COMPANY,
a Delaware corporation
By: /s/ Greg D. Kerley
Greg D. Kerley
Executive Vice President &
Chief Financial Officer
J.P. MORGAN TRUST COMPANY, N.A.,
as successor Trustee to
The First National Bank of Chicago
By: /s/ Benita A. Vaughn
Benita A. Vaughn
Vice President
3
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE (this “ Supplemental Indenture ”) executed as of June 30, 2006 by and among, Southwestern Energy Company, an Arkansas corporation (the “ Company ”), Southwestern Energy Company, a Delaware corporation (“ Southwestern Delaware ”) and UMB Bank, N.A. (as successor to The Bank of New York), as Trustee (the “ Trustee ”). Capitalized terms used herein and not defined shall have the meanings ascribed to them in that certain Indenture, dated as of June 1, 1998 (as previously supplemented by the First Supplemental Indenture, dated May 2, 2006, the “ Indenture ”), between the Company and the Trustee.
RECITALS
WHEREAS, the Company has issued a series of notes referred to as the 7.15% Notes Due 2018 (the “ Notes ”) pursuant to the terms of the Indenture;
WHEREAS, the Company is merging (the “ Merger ”) with and into Southwestern Delaware pursuant to Article X of the Indenture effective as of the date hereof;
WHEREAS, the Merger is a permitted transaction pursuant to Sections 10.1 and 10.2 of the Indenture provided that the surviving entity expressly assumes, by a supplemental indenture, the due and punctual payment of the principal of and interest on all the Notes according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be performed or observed by the Company;
WHEREAS, Southwestern Delaware desires to become the successor to the Company with respect to the Notes and the Indenture as contemplated by Section 10.2 of the Indenture;
WHEREAS, Section 9.1 of the Indenture provides that the Company, when authorized by a resolution of its board of directors, and the Trustee may enter into indentures supplemental to the Indenture without the consent of the Noteholders;
WHEREAS, the execution and delivery of this Supplemental Indenture has been duly authorized by the parties hereto, and all other acts necessary to make this Supplemental Indenture a valid and binding supplement to the Indenture, effectively supplementing the Indenture as set forth herein, have been duly taken;
NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, it is mutually agreed, for the equal and proportionate benefit of all Noteholders, as follows:
ARTICLE ONE
1.1
Upon the effectiveness of the Merger, Southwestern Delaware agrees to assume the due and punctual payment of the principal of and interest on all the Notes according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be performed or observed by the Company.
ARTICLE TWO
2.1
All of the provisions of this Supplemental Indenture shall be deemed to be incorporated in, and made part of, the Indenture, and the Indenture, as amended and supplemented by this Supplemental Indenture, shall be read, taken and construed as one and the same instrument and shall be binding upon all the Noteholders.
2.2
This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
2.3
In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
2.4
Nothing in this Supplemental Indenture, express or implied, shall give any person, other than the parties hereto and their successors hereunder and the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture. Except as expressly supplemented or amended as set forth in this Supplemental Indenture, the Indenture is hereby ratified and confirmed, and all the terms, provisions and conditions thereof shall be and continue in full force and effect. The Trustee accepts the trusts created by the Indenture, as amended and supplemented by this Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Indenture as amended and supplemented by this Supplemental Indenture.
2.5
The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture, except with respect to the execution hereof by the Trustee, or for or in respect of the recitals contained herein, all of which are made solely by the Company and Southwestern Delaware.
2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the day and year first written above.
SOUTHWESTERN ENERGY COMPANY, an Arkansas corporation
/s/ Greg D. Kerley
Name: Greg D. Kerley
Title: Executive Vice President & Chief Financial
Officer
SOUTHWESTERN ENERGY COMPANY, a Delaware corporation
/s/ Greg D. Kerley
Name: Greg D. Kerley
Title: Executive Vice President & Chief Financial
Officer
UMB BANK, N.A.,
as successor Trustee to The Bank of New York as Trustee
/s/ Anthony P. Hawkins
Name: Anthony P. Hawkins
Title: Vice President
3
SOUTHWESTERN ENERGY COMPANY
AND
COMPUTERSHARE TRUST COMPANY, N.A.
Rights Agent
Amendment No. 2 to the Amended and Restated Rights Agreement
Dated as of June 30, 2006
AMENDMENT NO. 2
TO THE AMENDED AND RESTATED RIGHTS AGREEMENT
This Amendment No. 2 (this “Amendment”), dated as of June 30, 2006, between Southwestern Energy Company, a Delaware corporation (the “Company”) as successor to Southwestern Energy Company, an Arkansas corporation (“SWN Arkansas”), and Computershare Trust Company, N.A., successor to The First National Bank of Chicago (the “Rights Agent”). All capitalized terms used in this Amendment and not otherwise defined shall have the respective meanings set forth in the Amended and Restated Rights Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, on May 5, 1989 (the “Declaration Date”), the Board of Directors of SWN Arkansas authorized and declared a dividend of one right representing the right to purchase one share of Common Stock upon the terms and subject to the conditions set forth in a Rights Agreement, dated May 5, 1989, between SWN Arkansas and the Rights Agent (the “1989 Rights Agreement”) for each outstanding share of common stock, $2.50 par value, of SWN Arkansas outstanding at the close of business on May 19, 1989 (the “Record Date”), and authorized the issuance of one Right with respect to each share of Common Stock that shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date;
WHEREAS, SWN Arkansas declared a three-for-one stock split in 1993 and, in connection with such split, the number of Rights was adjusted pursuant to Section 11 of the 1989 Rights Agreement;
WHEREAS, on April 12, 1999, in compliance with the terms of Section 27 of the 1989 Rights Agreement, the Company and the Rights Agent entered into an Amended and Restated Rights Agreement which amended and restated the 1989 Rights Agreement in its entirety in order to extend the Expiration Date until April 12, 2009 and to make other changes and provisions that they determined were necessary or desirable and did not adversely affect the interests of the holders of the Rights (as further amended by Amendment No. 1 dated March 15, 2002 to eliminate all required approvals of Independent Directors, the “Amended and Restated Rights Agreement”);
WHEREAS, SWN Arkansas declared two two-for-one stock splits in 2005 and, in connection with such splits, the number of Rights was adjusted pursuant to Section 11 of the Amended and Restated Rights Agreement such that each certificate for Common Stock outstanding as of the date of this Amendment also represents one Right under the Amended and Restated Agreement representing the right to purchase one share of Common Stock upon the terms and subject to the conditions set forth in the Amended and Restated Agreement;
WHEREAS, in order to change SWN Arkansas’s state of incorporation from Arkansas to Delaware (the “Reincorporation”), SWN Arkansas is merging with and into the Company effective as of the date hereof, with the Company surviving the merger;
WHEREAS, the Company wishes to amend the Amended and Restated Rights Agreement in order to make certain changes and provisions that are necessary or desirable to reflect the Reincorporation and which do not adversely affect the interests of the holders of the Rights;
WHEREAS, in compliance with the terms of Section 27 of the Amended and Restated Rights Agreement, the Company has (i) delivered to the Rights Agent a certificate of an appropriate officer of the Company which states that this Amendment has been approved by the Company’s Board of Directors and is in compliance with the terms of Section 27 of the Amended and Restated Rights Agreement and (ii) instructed the Rights Agent to execute this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
2
Section l. Definitions .
(a) The definition of “Company” contained in preamble of the Amended and Restated Rights Agreement is hereby amended in its entirety to read as follows:
““Company” means Southwestern Energy Company, a Delaware corporation.”
(b) The definition of “Common Stock” contained in subparagraph (h) of Section 1 of the Amended and Restated Rights Agreement is hereby amended in its entirety to read as follows:
““Common Stock” shall mean the common stock, $0.01 par value, of the Company (as it may be constituted from time to time during the term of this Agreement), except that “Common Stock” when used with reference to any Person other than the Company (or, in the case of a transaction referred to in Section 13 hereof, if the Company is the successor to the other Person referred to in clause (a), (b) or (c) of Section 13, or is the surviving corporation, when thereafter used with reference to the Company) shall mean the capital stock (or, in the case of a partnership or other unincorporated entity, the equivalent equity interest) with the greatest voting power of such Person, together with all rights and benefits (however denominated or constituted) relating to such capital stock (including, without limitation, any rights or warrants to acquire additional shares of such capital stock or other securities or assets, or to participate in any trust for the benefit of holders of such shares, or to share in the benefits of any agreements or other arrangements for the benefit of such holders), whether or not such rights are yet exercisable, and together with any other securities which are represented by the certificates for such shares or are transferred in connection with transfers of such shares.”
Section 2. Governing Law . Section 32 of the Amended and Restated Rights Agreement is amended in its entirety to read as follows:
“Section 32. Governing Law . This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.”
Section 3. Exhibit A . Exhibit A to the Amended and Restated Rights Agreement is amended in its entirety to read as set forth in Exhibit A to this Amendment.
Section 4. Exhibit B . Exhibit B to the Amended and Restated Rights Agreement is amended in its entirety to read as set forth in Exhibit B to this Amendment.
Section 5. Governing Law . This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.
Section 6. Counterparts . This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
Section 7. Descriptive Headings . Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
Section 8. Ratification of the Amended and Restated Rights Agreement . Except as expressly amended hereby, the Amended and Restated Rights Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.
3
RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the date and the year first above written.
| Attest: | SOUTHWESTERN ENERGY COMPANY |
| By: /s/ MARK K. BOLING | By: /s/ GREG D. KERLEY |
|
Mark K. Boling, Secretary |
Greg D. Kerley, Executive |
|
Vice President and Chief Financial Officer |
|
| Attest: | COMPUTERSHARE TRUST COMPANY, N.A. |
| By: | By: /s/ MICHAEL J. CONNOR |
|
Name: Michael J. Connor |
|
|
Title: Managing Director, Client Services |
4
EXHIBIT A
(Form of Right Certificate)
Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER APRIL 11, 2009 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. IF THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO IS, WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS THOSE TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID.
Right Certificate
SOUTHWESTERN ENERGY COMPANY
This certifies that _________________________________________ , or his, her or its registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Amended and Restated Rights Agreement dated as of April 12, 1999 (as amended from time to time, the “Rights Agreement”) between Southwestern Energy Company, a Delaware corporation (the “Company”), and Computershare Trust Company, N.A., successor to The First National Bank of Chicago (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date and prior to 5:00 P.M. (New York City time) on the Expiration Date (as such terms are defined in the Rights Agreement) at the principal office or such other office of the Rights Agent designated for such purpose, or of its successors as Rights Agent, one fully-paid, nonassessable share of Common Stock, $0.01 par value (the “Common Stock”) of the Company, at a purchase price of $10 per share of Common Stock (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the appropriate Form of Election to Purchase Shares duly executed. The number of Rights evidenced by this Right Certificate and the number of shares which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, have been determined as of April 7, 1999.
As provided in the Rights Agreement, the Purchase Price and the number of shares of Common Stock or other securities which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events, and in certain circumstances may be exercised to purchase securities of issuers other than the Company.
This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the above mentioned office of the Rights Agent and are available free of charge upon written request from the Company at:
Southwestern Energy Company
2350 N. Sam Houston Parkway East, Suite 300
Houston, Texas 77032
Attention: Chief Executive Officer
This Right Certificate, with or without other Right Certificates, upon surrender at the office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Common Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive, upon surrender hereof, another Right Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this Right Certificate may be redeemed by the Company at a redemption price of $.01 per Right (payable in cash, shares of Common Stock or other consideration), appropriately adjusted to reflect any Common Stock split, Common Stock dividend or similar transaction occurring after the date hereof.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this Right Certificate (and the Rights Agreement itself) may be amended by action of the Company's Board of Directors.
No fractional shares of Common Stock will be issued upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.
A-1
No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Common Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of _______________, _____.
|
Attest: SOUTHWESTERN ENERGY COMPANY
By:________________________ By:________________________ Secretary Title: |
Countersigned:
COMPUTERSHARE TRUST COMPANY, N.A.
By:
/s/ MICHAEL J. CONNOR
Authorized Signature
A-2
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _____________________________ hereby sells, assigns and transfers unto ______________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________ Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
DATED: ________________, ________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: __________________, ________ ________________________________ Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
A-3
FORM OF ELECTION TO PURCHASE SHARES
(To be executed if holder desires to
exercise the Right Certificate)
To Southwestern Energy Company:
The undersigned hereby irrevocably elects to exercise __________ Rights represented by this Right Certificate to purchase the Common Stock of the Company (or such other securities of the Company or any other person) and requests that certificates for such Common Stock be issued in the name of:
Please insert social security or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
(Please print name and address)
Dated: _______________________, _____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________________, ______ ________________________________ Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
A-4
EXHIBIT B
SOUTHWESTERN ENERGY COMPANY
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On June 30, 2006 (the “Amendment Date”), the Board of Directors of Southwestern Energy Company, a Delaware corporation (the “Company”) approved, and the Company has entered into, an Amendment No. 2 (“Amendment No. 2”) to its Amended and Restated Rights Agreement, dated as of April 12, 1999 (as previously amended by Amendment No. 1 dated March 15, 2002 to eliminate all required approvals of Independent Directors, the “Rights Agreement”), between the Company and Computershare Trust Company, N.A., successor to First Chicago Trust Company of New York (the “Rights Agent”), pursuant to which the terms of the outstanding rights (the “Rights”) were amended and restated. The outstanding Rights are currently evidenced (on the basis of one Right for each outstanding share) by the existing certificates for outstanding shares of common stock, $0.01 par value, of the Company (the “Common Stock”), and are not exercisable and do not trade separately from such shares. The summary below describes the Rights as so amended by Amendment No. 2.
Each Right, when exercisable, will entitle the registered holder to purchase from the Company one share of the Company's Common Stock at a price of $10 per share (the “Purchase Price”), subject to adjustment.
Until the close of business on the earliest of (i) the tenth day after a public announcement that (A) a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership (as defined) of 15% or more of the outstanding shares of Common Stock of the Company (other than pursuant to a tender offer for all outstanding shares of Common Stock at the price and on terms approved by the Board of Directors based upon a prior recommendation of the Independent Directors (as defined) at a time when there are at least two Independent Directors or solely as a result of a reduction of the number of shares of Common Stock outstanding due to a repurchase of shares by the Company), (B) any person or group which beneficially owned 15% of the outstanding shares on the date of the Rights Agreement, or which acquired beneficial ownership of 15% of the outstanding shares as a result of any repurchase of shares by the Company, thereafter acquired beneficial ownership of additional shares constituting 1% or more of the outstanding shares of Common Stock or (C) the Board of Directors determines that a person or group beneficially owning 10% or more of the Common Stock presents a threat to the best interests of the Company or its shareholders and is therefore an “Adverse Person” (any person or group referred to in this clause (i) being an “Acquiring Person”); and (ii) the tenth Business Day (or such later day as may be determined by action of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring Person) after the date of the commencement of, or the first public announcement of the intent of any person (other than a Company Entity (as defined)) to commence (which intention to commence remains in effect for five business days after such announcement) a tender or exchange offer by any Person (other than a Company Entity) to acquire (when added to any shares as to which such Person is the beneficial owner immediately prior to such commencement) beneficial ownership of 15% or more of the issued and 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 Company's Common Stock certificates outstanding as of the Record Date, by such Common Stock certificate.
The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Common Stock. New Common Stock certificates issued after the Record Date upon transfer or new issuance of the Common Stock will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date, the surrender for transfer of any of the Common Stock certificates outstanding as of the date of the Rights Agreement (whether or not containing a notation contemplated by the original Rights Agreement dated May 5, 1989) will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate and the number of Rights associated with each share of Common Stock shall be proportionately adjusted in the event of any dividend in Common Stock on the Common Stock or subdivision, combination or reclassification of the Common Stock (except as otherwise provided in the Rights Agreement). 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 certificates alone will evidence Rights.
B-1
The Rights are not exercisable until the Distribution Date. The Rights will expire on April 11, 2009, unless earlier redeemed by the Company as described below or unless further extended pursuant to an amendment in the Rights Agreement as described below.
The Purchase Price payable, and the number of shares of Common Stock 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 Common Stock, (ii) upon the grant to holders of Common Stock of certain rights or warrants to subscribe for shares of Common Stock or convertible securities at less than the current market price of the Common Stock or (iii) upon the distribution to holders of Common Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Common Stock) or of subscription rights or warrants (other than those referred to above).
In the event that, at any time after the Rights become exercisable, the Company is acquired in a merger or other business combination, proper provision shall be made so that each holder of a Right shall 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 surviving company (or its parent company or other controlling entity) which at the time of such transaction would have a market value of two times the exercise price of the Right. In the event that any person becomes an Acquiring Person, the Rights Agreement provides that proper provision would be made so that each holder of a Right, other than the Acquiring Person (whose Rights would thereafter be null and void) and certain of its transferees, would thereafter have the right to receive upon exercise that number of shares of the Common Stock having a market value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Common Stock on the last trading date prior to the date of exercise.
At any time prior to the close of business on the date that Rights holders become entitled to purchase Common Stock of the Company (or of the surviving entity after a merger with the Company) with a market value of twice the Purchase Price (as described above), the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (payable in cash, shares of Common Stock or other consideration), appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Redemption Price”). Immediately upon the action of the Board of Directors of the Company electing to redeem the Rights (unless otherwise specified in such Board action), the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.
Upon the first public announcement (including, without limitation, the filing of a report pursuant to the Securities Exchange Act of 1934) by the Company or an Acquiring Person containing information indicating that an Acquiring Person has become such and prior to the acquisition by an Acquiring Person of 50% or more of the Common Stock then outstanding, the Board of Directors may, at its option, exchange all or part of the then outstanding and existing Rights (other than Rights owned by such Acquiring Person which shall become void) for Common Stock at an Exchange Ratio of one share of Common Stock per Right (subject to adjustment) (the “Exchange Ratio”). Immediately upon the action of the Board of Directors of the Company electing to exchange the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive that number of shares of Common Stock or Common Stock equivalents equal to the number of Rights held by such holder multiplied by the Exchange Ratio.
Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, no right to vote or to receive dividends.
At any time prior to the time that an Acquiring Person has become such, the Company may amend the Rights Agreement and the terms of the Rights in any manner deemed necessary or desirable. Thereafter, the Rights Agreement and the terms of the Rights may be amended by the Company under certain circumstances, but not in any manner that adversely affects the interests of the holders of the Rights (other than an Acquiring Person).
B-2
The Rights Agreement, which includes as exhibits the form of the Amended Right Certificate and the Summary of the Rights to Purchase Common Stock, and Amendment No. 2, are attached hereto as exhibits and incorporated by reference herein. The foregoing description of the Rights Agreement and the amended Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement.
B-3
FORM OF SECOND AMENDED AND RESTATED INDEMNITY AGREEMENT
This Second Amended and Restated Indemnity Agreement (this “Agreement”) dated June 30, 2006 among Southwestern Energy Company (the “Company”) and each of its wholly-owned Subsidiaries that are identified on the signature page hereof (collectively, the “Subsidiaries”), with offices located in Houston, Texas and Fayetteville, Arkansas, and ____________ (the “Indemnitee”).
WITNESSETH:
WHEREAS, Indemnitee is currently serving as a director, officer, employee, trustee or agent (including a fiduciary) of the Company and/or one or more of the Subsidiaries and in such capacity has performed and is performing valuable services for the Company and/or the Subsidiaries; and
WHEREAS, the Company's and each Subsidiary's bylaws (the “Bylaws”) provide for the indemnification of directors, officers, employees and agents (including fiduciaries) and the advancement of certain litigation expenses for directors, officers, employees and agents (including fiduciaries) to the maximum extent authorized by the Delaware General Corporation Law [and, to the extent applicable to a Subsidiary, the Arkansas Business Corporation Act of 1987, the Arkansas Small Business Entity Pass Through Act and the Texas Limited Liability Company Act] (as amended from time to time and including any successor acts thereto, collectively, the “State Statutes”); and
WHEREAS, the State Statutes provide that the rights to indemnification and advancement of expenses authorized thereunder are not exclusive; and
WHEREAS, under the State Statutes, the Company and each Subsidiary has the power to purchase and maintain insurance on behalf of any person who (i) is or was a director, officer,
employee, trustee or agent (including a fiduciary) of the Company or such Subsidiary, or (ii) is or was serving, at the request of such corporation, as a director, officer, employee, trustee or agent (including a fiduciary) of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Company or such Subsidiary would have the power to indemnify him or her against such liability under the provisions of the State Statutes; and
WHEREAS, developments with respect to the terms and availability of a policy of Directors’ and Officers’ Liability Insurance (“D&O Insurance”) and with respect to the terms and enforcement of statutory and by-law provisions concerning indemnification and the advancement of expenses generally have raised questions concerning the adequacy and reliability of the protection that these provisions provide; and
WHEREAS, in order to resolve these questions and induce Indemnitee to continue to serve as an officer, director, employee, trustee or agent (including a fiduciary) of the Company and/or the Subsidiaries, the Company and each Subsidiary have determined that it is in the best interest of the Company and each Subsidiary and their stockholders to enter into this Agreement with Indemnitee;
NOW, THEREFORE, in consideration of the Indemnitee's continued service as a director, officer, employee, trustee or agent (including a fiduciary) of the Company and/or one or more of the Subsidiaries the parties hereto agree as follows:
1.
Indemnification and Payment of Expenses . Subject to the limitations, terms and conditions of this Agreement, including, but not limited to the limitations in Section 4, the Company and each Subsidiary hereby agree to:
2
(a)
hold harmless and indemnify the Indemnitee against all liabilities and losses incurred in connection with any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or other (including, but not limited to, any action by or in the right of the Company), to which the Indemnitee is, was or at any time becomes a party, is threatened to be made a party, or is involved (as a witness or otherwise), by reason of the fact that the Indemnitee is, was or at any time becomes a director, officer, employee, trustee or agent (including a fiduciary) of the Company or any Subsidiary or is or was serving at the request of the Company as a director, officer, employee, trustee or agent (including a fiduciary) of another corporation or of a partnership, joint venture, trust or other enterprise, whether the basis of such proceeding is alleged action in an official capacity, or in any other capacity while serving as a director, officer, employee, trustee or agent; and
(b)
pay on behalf of the Indemnitee, and his or her executors, administrators, heirs or assigns, any amount which he or she is or becomes legally obligated to pay because of any claim or claims made against the Indemnitee because of any act or omission or neglect or breach of duty, including any actual or alleged error or misstatement or misleading statement, which Indemnitee commits or suffers while acting in his or her capacity as a director, officer, employee, trustee or agent (including a fiduciary) of the Company and/or any of the Subsidiaries. The payments which the Company and/or the Subsidiaries will be obligated to make hereunder shall include, inter alia, compensatory and punitive damages, judgments, fines, ERISA excise taxes, penalties, settlements and costs, costs of investigation, (excluding salaries as officers or employees of the Company and/or the Subsidiaries), attorneys’ fees, costs of appearance, attachment and similar bonds
3
and other legal costs of actions, claims, proceedings, investigations and alternative dispute mechanisms, (including actions, claims, proceedings, investigations or alternative dispute mechanisms by or on behalf of the Company and/or any Subsidiary and appeals therefrom), whether civil, criminal, administrative, investigative or other.
2.
Additional Indemnification; Nonexclusivity . (a) The Company and each Subsidiary hereby agree to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s or such Subsidiary’s Certificate of Incorporation or Articles of Incorporation (as the case may be), Bylaws or other organizational documents (collectively, the “Organizational Documents”), or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation[, an Arkansas corporation, an Arkansas limited liability company or a Texas limited liability company] to indemnify its directors, officers, employees or agents (including fiduciaries), it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation[, an Arkansas corporation, an Arkansas limited liability company or a Texas limited liability company] to indemnify its directors, officers, employees or agents (including fiduciaries), such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 4(d).
(b)
The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company’s or any Subsidiary’s Organizational Documents, any agreement, any vote of stockholders or disinterested directors, the State Statutes,
4
or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action Indemnitee took or did not take while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.
3.
Notice of Claim; Subrogation; No Duplication of Payments . (a) If the Company has D&O Insurance in effect at the time the Company receives from Indemnitee any notice of commencement of an action, suit or proceeding, the Company shall give prompt notice of such commencement to the insurers in accordance with the procedures set forth in the policy. The Company shall thereafter take all necessary and desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such action, suit or proceeding in accordance with the terms of such policy.
(b)
In the event of any payment under this Agreement, the Company and/or each relevant Subsidiary, as the case may be, shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who hereby agrees to execute all documents required and to do everything that may be necessary to secure such subrogation rights, including the execution of such documents necessary or desirable to enable the Company and/or each relevant Subsidiary effectively to bring suit to enforce such rights.
(c)
The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.
5
4.
Exceptions to Indemnification . Notwithstanding the provision of Section 1 or any other provision of this Agreement, neither the Company nor any Subsidiary shall be liable under this Agreement to make any payment in connection with any claim made against the Indemnitee:
(a)
in respect of remuneration paid to the Indemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; or
(b)
for an accounting or profits made from the purchase or sale by the Indemnitee of securities of the Company or any Subsidiary pursuant to or within the meaning of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal or state statutory law or common law; or
(c)
on account of the Indemnitee's conduct which is finally adjudged to have been knowingly fraudulent, deliberately dishonest, grossly negligent, or willful and wanton misconduct in the performance of his or her duties, which such conduct is material to the establishment of liability for which indemnification is sought pursuant to the terms of this Agreement; or
(d)
if a final decision by a court shall determine that such indemnification is not lawful or is against public policy.
5.
Continuation . All agreements and obligations of the Company and/or its Subsidiaries required pursuant to the terms of this Agreement shall continue during the period the Indemnitee is a director, officer, employee, trustee or agent (including a fiduciary) of the Company and/or any Subsidiary (or is or was serving at the request of the Company and/or any Subsidiary as a director, officer, employee or agent (including a fiduciary) of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as the
6
Indemnitee shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, by reason of the fact that the Indemnitee was serving as a director, officer, employee, trustee or agent (including a fiduciary) of the Company and/or any Subsidiary or serving in any other capacity referred to in this Section.
6.
Notice and Defense . Promptly after receipt by the Indemnitee of notice of the commencement of any action, suit or proceedings, the Indemnitee is hereby required, if a claim in respect thereof is to be made against the Company and/or any Subsidiary under this Agreement to notify the Company and each relevant Subsidiary of the commencement thereof; but the omission so to notify the Company and each relevant Subsidiary will not relieve the Company nor any relevant Subsidiary from any liability which they may have to the Indemnitee otherwise than under this Agreement except to the extent that such lack of prompt notification shall cause the Company and/or any relevant Subsidiary to be denied coverage under any insurance policy that may then be in effect. With respect to any such action, suit or proceedings as to which the Indemnitee notifies the Company and or any Subsidiary of the commencement thereof:
(a)
the Company and/or each relevant Subsidiary will be entitled to participate therein at their own expense;
(b)
except as otherwise provided below to the extent that they may wish, the Company and/or any relevant Subsidiary jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel satisfactory to the Indemnitee. After notice from the Company and/or each relevant Subsidiary to the Indemnitee of its election to so assume the defense thereof, neither the Company nor any Subsidiary will be liable to the Indemnitee under this Agreement for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof
7
other than reasonable costs of investigation or as otherwise provided below. The Indemnitee shall have the right to employ separate counsel in such action, suit or proceedings but the fees and expenses of such counsel incurred after notice from the Company and/or each relevant Subsidiary of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized in writing by an executive officer of the Company and/or each relevant Subsidiary, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and/or any relevant Subsidiary and the Indemnitee in the conduct of the defense of such action, or (iii) the Company and/or any relevant Subsidiary shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the expense of the Company and/or each relevant Subsidiary. Neither the Company nor any Subsidiary shall be entitled to assume the defense of any action, suit or proceedings brought by or on behalf of the Company and/or any Subsidiary or as to which the Indemnitee shall have made the conclusion provided for in (ii) above; and
(c)
neither the Company nor any Subsidiary shall be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement or compromise of any action or claim effected without the prior written consent of the Company and each relevant Subsidiary. Neither the Company nor any Subsidiary shall settle any action or claim in any manner which would impose any penalty or limitation on the Indemnitee without the prior written consent of the Indemnitee. Neither the Company, any Subsidiary, nor the Indemnitee will unreasonably withhold its consent to any proposed settlement.
8
7.
Expenses . In the event that the Indemnitee employs his or her own counsel pursuant to Section 6(b)(i) through (iii) of this Agreement, the Company and/or each relevant Subsidiary shall advance to the Indemnitee, prior to any final disposition of any threatened or pending action, suit or proceedings, whether civil, criminal, administrative, investigative or other, any and all reasonable expenses specifically documented (including legal fees and expenses) as being incurred in investigating or defending any such action, suit or proceedings within thirty (30) days after receiving copies of invoices presented to the Indemnitee for such expenses.
8.
Repayment of Expenses . The Indemnitee agrees that the Indemnitee will promptly reimburse the Company and/or each relevant Subsidiary for all expenses advanced or paid by the Company and/or each relevant Subsidiary in defending any action, suit or proceedings, whether civil, criminal, administrative or investigative, against the Indemnitee in the event and only to the extent that it shall ultimately be determined by a final decision by a court having jurisdiction in the matter that the Indemnitee is not entitled to be indemnified by the Company and/or any relevant Subsidiary for such expenses under the provision of the State Statutes, the Organizational Documents, this Agreement, or otherwise, or that it is unlawful for the Indemnitee to be indemnified by the Company and/or any relevant Subsidiary for such expenses. The Indemnitee shall be required to reimburse only those entities from which he or she is not entitled to indemnification under the judicial determination described above and only to the extent of such entities' contribution to expenses advanced or paid. If the judicial determination requires reimbursement by the Indemnitee but provides no basis for allocation of the reimbursement among the relevant entities, such reimbursement shall be allocated on the basis of the ratio of the contribution made by each entity to which reimbursement is required to total contributions.
9
9.
Maintenance of Insurance . (a) The Company, on behalf of itself and the Subsidiaries, represents that it presently has in force and effect one or more policy or policies of D&O Insurance covering liabilities, which may include those which are not indemnifiable under the State Statutes, which may be asserted against or incurred by directors, officers, employees and agents (including fiduciaries) of the Company and its Subsidiaries in their performance of services, underwritten by reputable insurance companies and in such amounts as the Board of Directors of the Company deems appropriate (the “Insurance Policies”). The Company agrees, that so long as the Indemnitee shall continue to serve as a director, officer, employee, trustee or agent (including a fiduciary) of the Company or any Subsidiary (or shall continue at the request of the Company to serve as a director, officer, employee, trustee or agent (including a fiduciary) of another corporation, partnership, joint venture, trust or other enterprise), the Company shall maintain the Insurance Policies. In addition, following the Indemnitee’s cessation of such service (but in no event longer than four (4) years), the Company agrees that so long as the Indemnitee shall be subject to any possible claim or threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal or investigative, by reason of the fact that the Indemnitee was a director, officer, employee, trustee or agent (including a fiduciary) of the Company (or served in any of said other capacities), the Company shall purchase and maintain in effect for the benefit of the Indemnitee one or more valid, binding and enforceable policy or policies of D&O Insurance providing coverage in such amounts as is deemed appropriate by the Board of Directors.
(b)
The Company shall not be required to maintain said policy or policies of D&O Insurance in effect if, in the reasonable business judgment of the then directors of the Company (i) the premium cost for such insurance is substantially disproportionate to the amount of coverage,
10
(ii) the coverage provided by such insurance is so limited by exclusions or otherwise that there is insufficient benefit from such insurance or (iii) said insurance is not otherwise reasonably available; provided, however, that in the event the then directors make such a judgment, the Company shall purchase and maintain in force a policy or policies of D&O Insurance in the amount and with such coverage as the then directors determine to be reasonably available. In the event that the directors shall determine that a policy or policies of D&O Insurance are not reasonably available, the Company shall promptly notify Indemnitee of such determination.
(c)
To the extent the Company maintains D&O Insurance applicable to directors, officers, employees or agents (including fiduciaries), the Indemnitee shall be covered by such policies in such a manner as to provide the Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, officers, employees or agents (including fiduciaries).
10.
Change in Control . (a) The Company agrees that if there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control) then, with respect to all matters thereafter arising concerning the rights of the Indemnitee to indemnification and payment under this Agreement or any other agreement or under the Company’s Certificate of Incorporation or Bylaws or under State Statutes, Independent Legal Counsel shall be selected by the Indemnitee and approved by the Company (which approval shall not be unreasonably withheld) to, among other things, render a written opinion to the Company and the Indemnitee as to whether and to what extent the Indemnitee would be entitled to be indemnified. The Company agrees to abide by such opinion, to pay the reasonable fees and expenses of the Independent Legal Counsel and to fully indemnify such counsel against any and all
11
expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant thereto.
(b)
“Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 10(a) hereof, who shall not have otherwise performed services for the Company or the Indemnitee within the last three years (other than with respect to matters concerning the rights of the Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).
(c)
“Change in Control” shall mean the occurrence of any of the following:
(i)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), an “Acquiring Person”) becomes the “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding securities, provided, however, that any acquisition by (x) the Company or any of its subsidiaries, or any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries or (y) any corporation with respect to which, immediately following such acquisition, more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, in the aggregate by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company common stock and Company voting securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the outstanding Company common stock and Company voting securities, as the case may be, shall not constitute a Change in Control;
(ii)
consummation by the Company of a reorganization, merger or consolidation (a “Business Combination”), in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the outstanding Company common stock and Company voting securities immediately prior to such Business Combination do not in the aggregate, immediately following such Business Combination, beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination in substantially the same proportion as their ownership immediately prior to such Business Combination of
12
the outstanding Company common stock and Company voting securities, as the case may be;
(iii)
any individual who is nominated by the Board for election to the Board on any date fails to be so elected as a direct or indirect result of any proxy fight or contested election for positions on the Board;
(iv)
a “change in control” of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act occurs; or
(v)(A)
a complete liquidation or dissolution of the Company or (B) a sale or other disposition of all or substantially all of the assets of the Exploration and Production business segment of the Company (or, in the case of directors, officers, employees or agents (including fiduciaries) of Arkansas Western Gas Company, the Utility business segment) other than to a corporation with respect to which, immediately following such sale or disposition, more than 80% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, in the aggregate by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company common stock and Company voting securities immediately prior to such sale or disposition in substantially the same proportion as their ownership of the outstanding Company common stock and Company voting securities, as the case may be, immediately prior to such sale or disposition; which, immediately following such sale or disposition, more than 80% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, in the aggregate by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company common stock and Company voting securities immediately prior to such sale or disposition in substantially the same proportion as their ownership of the outstanding Company common stock and Company voting securities, as the case may be, immediately prior to such sale or disposition.
11.
Partial Indemnification . If Indemnitee is entitled under the provisions of this Agreement to indemnification for some or a portion of the expenses incurred in connection with any claim, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expense to which Indemnitee is entitled.
12.
Construction of Certain Terms . (a) The term “expenses” shall be broadly and reasonably construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements,
13
appeal bonds, other out-of-pocket costs and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise compensated by the Company or any third party, provided that the rate of compensation and estimated time involved is approved by the Board of Directors, which approval shall not be unreasonably withheld), actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under this Agreement, the State Statutes or otherwise.
(b)
The term “action, suit or proceeding “ shall be broadly construed and shall include any alternative dispute mechanism and shall further include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit, proceeding or alternative dispute mechanism, whether civil, criminal, administrative or investigative and whether formal or informal.
(c)
The terms “Company” and “Subsidiary” shall include, without limitation and in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents (including fiduciaries), so that any person who is or was a director, officer, employee, trustee or agent (including a fiduciary) of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, trustee or agent (including a fiduciary) of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or
14
surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
( d)
The term “serving at the request of the Company” shall include, without limitation, any service as a director, officer, employee, trustee or agent (including a fiduciary) of the Company or any Subsidiary which imposes duties on, or involves services by, such director, officer, employee, trustee or agent (including a fiduciary) with respect to an employee benefit plan, its participants or beneficiaries.
(e)
The term “other enterprises” shall include, without limitation, employee benefit plans.
(f)
The term “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan.
13.
No Presumptions . For purposes of this Agreement, to the fullest extent permitted by law, the termination of any action, suit or proceeding by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.
14. Miscellaneous . (a) The Company and each Subsidiary expressly confirms and agrees that it has entered into this Agreement and assumed the obligation imposed on the Company and each Subsidiary hereby in order to induce the Indemnitee to continue as a director, officer, employee, trustee or agent (including a fiduciary) of the Company and/or the Subsidiaries, and acknowledges that the Indemnitee is relying upon this Agreement in continuing in such capacity. In the event the Indemnitee is required to bring any action to enforce rights or collect monies due
15
under this Agreement and is successful in such action, the Company and/or each relevant Subsidiary shall reimburse the Indemnitee for all of the Indemnitee's reasonable fees and expenses in bringing and pursuing such action.
(b)
Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability or any other provisions hereof.
(c)
This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.
(d)
This Agreement shall be binding upon the Indemnitee and upon the Company and each Subsidiary, their successors and assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially of the business and/or assets of the Company or such Subsidiary, as the case may be, and shall inure to the benefit of the Indemnitee, his or her heirs, personal representatives and assigns and to the benefit of the Company, each Subsidiary, and their successors and assigns.
(e)
No amendment, modification, alteration, change, termination or cancellation of this Agreement shall be effective unless in writing signed by the parties hereto.
(f)
Unless otherwise provided herein, all notice or other communication allowed or required under this Agreement must be in writing. All such notices shall be deemed given and received when delivered personally by hand, or placed in the United States mail, addressed to the other party, by first class mail or certified mail, postage prepaid, at the addresses indicated following the signatures of the parties hereto or such other addresses as may be specified in writing.
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(g)
This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written commitments, understandings and agreements relating to the subject matter hereof between the parties hereto. The provisions of this Agreement shall be applicable to matters arising prior to the date hereof.
In Witness Whereof, the parties hereto have executed this Agreement on and as of the day and year first above written.
Notice Address for Company
SOUTHWESTERN ENERGY COMPANY
2350 N. Sam Houston Pkwy., E.,
Suite 300
Houston, Texas 77032
By:
ATTENTION: Secretary
President and Chief Executive Officer
Notice Address for Subsidiaries
SOUTHWESTERN ENERGY PRODUCTION
2350 N. Sam Houston Pkwy., E.,
COMPANY
Suite 300
Houston, Texas 77032
By:
ATTENTION: Secretary
President
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SEECO, INC.
By:
President
DIAMOND “M” PRODUCTION COMPANY
By:
President
DESOTO DRILLING, INC.
By:
Senior Vice President
SOUTHWESTERN MIDSTREAM SERVICES
COMPANY
By:
President
SOUTHWESTERN ENERGY SERVICES
COMPANY
By:
President
DESOTO GATHERING COMPANY, L.L.C.
By:
President
18
ANGELINA GATHERING COMPANY, L.L.C.
By:
President
Notice Address for Subsidiaries
ARKANSAS WESTERN GAS COMPANY
1083 Sain Street
Fayetteville, Arkansas 72703
ATTENTION: Secretary
By:
President
A W REALTY COMPANY
By:
President and Chief Executive Officer
Notice Address for Indemnitee:
2350 N. Sam Houston Pkwy. E.
, Indemnitee
Suite 300
Houston, Texas 77032
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