Registration No. 33-114446
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
AMENDMENT No. 3
To
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
WESTERN GAS RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 84-1127613
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1099 18th Street, Suite 1200
Denver, Colorado 80202
(303) 452-5603
(Address, Including Zip Code, and Telephone Number of Registrant's
Principal Executive Offices)
_______________
John C. Walter, Esq.
Executive Vice President, General Counsel and Secretary
Western Gas Resources, Inc.
1099 18th Street, Suite 1200
Denver, Colorado 80202
(303) 452-5603
(Name, Address and Telephone Number,
Including Area Code, of Agent for Service)
Copy to:
Robert M. Chilstrom, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000
_______________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by the Registrant.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment Retirement Plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or reinvestment Retirement Plans, check the following
box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
- ------------------------------------- ---------------- ------------------- -------------------- -------------
Proposed Maximum Proposed Maximum Amount of
Title of Securities To Be Amount To Be Offering Price Aggregate Offering Registration
Registered Registered (2) Per Share (3) Price(4) Fee (5)
- ------------------------------------- ---------------- ------------------- -------------------- -------------
Common Stock, par value $0.10 per
share, including Series A Junior
Participating Preferred Stock
purchase rights attached thereto(1) 934,000 shares $20.06 $18,736,040 $2,373,86(6)
(1) On March 22, 2001, the Board of Directors of the Registrant declared a
dividend distribution of one Series A Junior Participating Preferred Stock
purchase right for each outstanding share of common stock to stockholders
of record at the close of business on April 9, 2001 (the "Record Date").
The description and terms of the Series A Junior Participating Preferred
Stock purchase rights are set forth in the Rights Agreement dated as of
March 22, 2001 (the "Rights Agreement"), between the Registrant and Fleet
National Bank, as Rights Agent. Until the occurrence of certain prescribed
events, the rights are not exercisable, are evidenced by the certificates
for the common stock and will be transferred only with the common stock.
The value attributable to such rights, if any, is reflected in the market
price of the common stock. Pursuant to the Rights Agreement, such rights
will also be issued in respect of all shares of common stock that the
Registrant issues after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date (each as defined in the Rights
Agreement). In respect of shares of common stock of the Registrant issued
or sold pursuant to the exercise of stock options or under any employee
plan or arrangement after the Distribution Date and prior to the
Expiration Date, the Rights Agreement states that the Registrant will,
provided that certain circumstances are not present, issue Rights
Certificates representing the appropriate number of Rights in connection
with such issuance or sale. As a result of a stock split in the form of a
stock dividend of one share of common stock of the Registrant for every
one share of such common stock issued or issuable as of June 4, 2004 to be
distributed on June 18, 2004 (the "Stock Split"), the number of rights
associated with each share of common stock will be adjusted such that each
share of common stock will include half a right.
(2) Registrant previously registered 467,000 shares of common stock under this
Registration No. 33-114446; the number of securities registered and
related price data have been adjusted to give effect to the Stock Split.
(3) Highest price, as adjusted to reflect the Stock Split, excluding interest,
to be payable per share in connection with the rescission offer covered by
this registration statement. The price per share will range from $11.95 to
$20.06, depending on the price originally paid by the offeree.
(4) Aggregate purchase price, excluding interest, estimated to be payable if
the rescission offer covered by this registration statement is accepted in
full.
(5) Calculated pursuant to Rule 457(j) on the basis of the amount at which
such securities were sold.
(6) Registration fee previously paid on April 13, 2004.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act or until the Registration
Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
PROSPECTUS
WESTERN GAS RESOURCES, INC.
934,000 SHARES
COMMON STOCK, PAR VALUE $0.10 PER SHARE
RESCISSION OFFER
Western Gas Resources, Inc., referred to herein as Western, offers,
under the terms and conditions described in the prospectus, to rescind,
referred to herein as the Rescission Offer, the previous purchase of a total of
934,000 shares of Western common stock, par value $0.10 per share (as adjusted
to reflect the Stock Split referred to below), by the trustee of the Western
Gas Resources, Inc. Retirement Plan, referred to herein as the Retirement Plan,
for inclusion in the Western Gas Resources Common Stock Fund, referred to
herein as the Western Gas Fund, in which some participants in the Retirement
Plan hold interests in the form of units, referred to herein as Units. Eligible
participants who accept this Rescission Offer in accordance with the terms set
forth in this prospectus will receive (i) in the event the participant has
caused the sale of such Units and therefore the common stock underlying the
Units, the consideration paid for the Units, less the proceeds from the sale of
the Units, plus applicable interest, or (ii) the consideration paid for such
Units, plus applicable interest from the date of purchase. The Rescission Offer
applies to the purchases of common stock underlying the Units purchased by
participants during the period from August 14, 2001 through August 14, 2002, or
the Rescission Period, at prices ranging from $11.95 per share to $20.06 per
share, as adjusted to reflect the Stock Split.
The prices per share and the number of shares of common stock in this
prospectus have been restated, as appropriate, to reflect Western's two-for-one
stock split in the form of a stock dividend, referred to herein as the Stock
Split, distributed on June 18, 2004. The closing sale price of the common stock
(as reported on the New York Stock Exchange) on December 2, 2004 was $29.58 per
share.
Western's common stock is listed on the New York Stock Exchange under
the trading symbol WGR.
ELIGIBLE PARTICIPANTS MAY ELECT TO ACCEPT OR REJECT THE RESCISSION OFFER WITH
RESPECT TO ALL OR ANY PORTION OF THEIR PURCHASES, AS SET FORTH HEREIN. YOU NEED
TO DO NOTHING TO REJECT THIS RESCISSION OFFER. ELIGIBLE PARTICIPANTS WHO FAIL
TO RESPOND TO THIS RESCISSION OFFER BY THE EXPIRATION DATE WILL BE DEEMED BY
WESTERN TO HAVE REJECTED THE RESCISSION OFFER. ACCEPTANCE OR REJECTION OF THIS
RESCISSION OFFER MAY PREVENT A PARTICIPANT FROM MAINTAINING AN ACTION AGAINST
WESTERN IN CONNECTION WITH THE UNITS AND THE UNDERLYING SHARES OF COMMON STOCK
PURCHASED PURSUANT TO THE RETIREMENT PLAN. NONE OF THE PROCEEDS RESULTING FROM
ACCEPTANCE OF THE RESCISSION OFFER WILL BE PAID DIRECTLY TO THE PARTICIPANT,
BUT WILL BE PAID, UPON ACCEPTANCE OF THE OFFER, TO THE TRUSTEE OF THE
RETIREMENT PLAN FOR THE PARTICIPANT'S INDIVIDUAL ACCOUNT AND REINVESTED BY THE
TRUSTEE IN THE MANAGED INCOME PORTFOLIO (UNLESS, AS A RESULT OF RETIREMENT OR
TERMINATION OF EMPLOYMENT, THE PARTICIPANT NO LONGER HAS AN INDIVIDUAL
RETIREMENT PLAN ACCOUNT).
Investing in Western's common stock involves risks. See "Risk Factors"
beginning on page 6.
The Rescission Offer will expire at 11:59 p.m., Mountain Standard
Time, on January 10, 2005, referred to herein as the Expiration Date.
Participants who do not accept the Rescission Offer will be deemed to have
purchased Units including the underlying common stock registered under the
Securities Act of 1933, as amended, referred to herein as the Securities Act,
effective as of the date of this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is December 6, 2004.
The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state in which such offer or sale is not permitted.
TABLE OF CONTENTS
AVAILABLE INFORMATION........................................................2
DOCUMENTS INCORPORATED BY REFERENCE..........................................2
QUESTIONS AND ANSWERS ABOUT THE RESCISSION OFFER.............................3
THE COMPANY..................................................................7
RISK FACTORS.................................................................7
USE OF PROCEEDS.............................................................11
THE RESCISSION OFFER........................................................11
INTERESTS OF NAMED EXPERTS AND COUNSEL......................................15
APPENDIX I..................................................................16
You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement.
Western has not authorized anyone to provide you with additional or different
information. If anyone provided you with additional or different information,
you should not rely on it. This prospectus is not an offer to sell or
soliciting an offer to buy these securities in any jurisdiction where such
offer, solicitation or sale is not permitted. You should assume that the
information contained in this prospectus and any accompanying prospectus
supplement is accurate only as of their respective dates and that any
information incorporated by reference is accurate only as of the date of the
document incorporated by reference. Our business, financial condition, results
of operations and prospects may have changed since those dates.
Unless otherwise stated or the context otherwise requires, references
in this prospectus to "we," "us," and "our" refer to Western Gas Resources,
Inc. and its subsidiaries as a consolidated entity, while references to
"Western" refer only Western Gas Resources, Inc. on a nonconsolidated basis.
AVAILABLE INFORMATION
Western is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith, files reports,
proxy and information statements and other information with the Securities and
Exchange Commission, or the SEC. Such reports, proxy and information statements
and other information can be inspected and copied at the Public Reference Room
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC maintains an Internet site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC,
including Western. Western's common stock is listed and traded on the New York
Stock Exchange. These reports, proxy and information statements and other
information can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
Western has filed with the SEC a registration statement on Form S-3
(referred to herein, together with all amendments and exhibits, as the
Registration Statement) under the Securities Act. This prospectus does not
contain all the information set forth in the Registration Statement, some parts
of which are omitted in accordance with the rules and regulations of the SEC.
For further information, reference is hereby made to the Registration
Statement.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows "incorporation by reference" into this prospectus of
information that Western files with the SEC. This permits Western to disclose
important information to you by referencing these filed documents. Any
information referenced in this way is considered part of this prospectus, and
any information filed with the SEC subsequent to the date of this prospectus
and prior to the termination of the Rescission Offer will automatically be
deemed to update and supersede this information. We incorporate by reference
the following documents that have been filed with the SEC:
o Registration Statement on Form S-8, filed on August 14, 2002,
relating to registration of shares of Western's common stock
under the Retirement Plan, and Registration Statement on Form
8-A, filed on March 30, 2001, relating to registration of
Western's Series A Junior Participating Preferred Stock purchase
rights;
o Annual Report on Form 10-K for the year ended December 31, 2003
and Amendment No. 1 and Amendment No. 2 to the Annual Report on
Form 10-K/A for the year ended December 31, 2003, as each is
amended by Amendment No. 3 to the Annual Report on Form 10-K/A
for the year ended December 31, 2003;
o Quarterly Reports on Form 10-Q for each of the quarters ended
March 31, 2004, June 30, 2004 and September 30, 2004 as amended
by Amendment No. 1 to the Quarterly Reports on Form 10-Q/A for
the quarters ended March 31, 2004, June 30, 2004 and
September 30, 2004, respectively;
o Current Reports on Form 8-K filed on January 23, 2004, March 17,
2004, April 22, 2004, May 11, 2004, May 24, 2004, May 26, 2004,
June 25, 2004, July 1, 2004, July 22, 2004, October 5, 2004 and
November 16, 2004; and
o Proxy Statement for the Annual Meeting of Shareholders held on
May 7, 2004.
We will provide without charge to each person to whom a copy of this
prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to John C. Walter,
Executive Vice President, General Counsel and Secretary, Western Gas Resources,
Inc., 1099 18th Street, Suite 1200, Denver, Colorado 80202 (telephone number
(303) 452-5603).
QUESTIONS AND ANSWERS ABOUT THE RESCISSION OFFER
Q:
Why are you making the Rescission Offer?
A:
Western is required to register the shares of common stock purchased by the
trustee of the Retirement Plan under the Securities Act. Although all the
purchases by the trustee during the Rescission Period were made in the open
market and in a manner consistent with the Retirement Plan and the investment
elections of the Retirement Plan participants, Western has determined that some
of the shares of its common stock purchased by the trustee and allocated to the
Western Gas Fund may not have been properly registered in accordance with the
Securities Act. In accordance with applicable law, Western is making this
Rescission Offer with regard to all shares of its common stock purchased by the
trustee and included in Units purchased by Retirement Plan participants between
August 14, 2001 and August 14, 2002. This Rescission Offer is being made to
ensure compliance with the Securities Act.
Q:
What will I receive if I accept the Rescission Offer?
A:
If you accept our Rescission Offer, and you have sold the Units, we will pay
damages to you for those Units you sold at a loss at the price per Unit you
paid less the proceeds of such sale, plus applicable interest. Interest will be
paid on the amount of the price originally paid for the Units during the period
from the date of purchase of such Units until the date of the sale of such
Units and on the loss realized from the sale of such Units from the date of
such sale through (but not including) the date the damages are paid, referred
to herein as the Payment Date. If you continue to hold the Units and acceptance
of the Rescission Offer is not economically beneficial to you as of the
Expiration Date, meaning that the price per Unit that you paid, plus applicable
interest, is less than the current market value of a Unit as of the Expiration
Date, we, as a fiduciary for you under the Retirement Plan, will direct the
trustee not to effectuate the repurchase. If, however, the market price of our
common stock has decreased such that as of the Expiration Date, it would be
economically beneficial to accept the Rescission Offer, we will repurchase
those Units, including the shares of common stock that, together with short
term investments, comprise the Units, that are subject to the Rescission Offer
at the price per Unit you paid to us plus interest from the date of purchase of
the Units through (but not including) the Payment Date.
Q:
Am I legally required to accept the Rescission Offer?
A:
No. A participant is not legally required to accept the Rescission Offer.
Q:
What considerations should I take into account in deciding whether to accept
the Rescission Offer?
A:
The answer to this question depends on whether you still hold the Units
purchased on your behalf during the Rescission Period.
Q:
What considerations should I take into account if I no longer hold the Units
purchased on my behalf during the Rescission Period?
A:
If you no longer hold the Units purchased during the Rescission Period you
should determine whether any such Units were sold for less than you paid for
them. You are not entitled to damages for any Units you sold at a price equal
to or higher than the price you paid for them. If any of the Units you
purchased during the Rescission Period were sold at a loss, acceptance of the
Rescission Offer, with regard to those Units, is economically beneficial to
you. The extent to which acceptance of the Rescission Offer is beneficial
depends on the amount of the loss and the amount of interest to which you are
entitled.
Q:
What considerations should I take into account if I continue to hold the Units
purchased on my behalf during the Rescission Period?
A:
Acceptance of the Rescission Offer by those participants who continue to hold
Units purchased during the Rescission Period is not economically beneficial
unless the market value of the common stock decreases to the extent that as of
the Expiration Date the value of a Unit is less than the price paid by the
participant during the Rescission Period plus interest. In light of the
substantial increase in the market value of the common stock since the end of
the Rescission Period, acceptance of the Rescission Offer for Units still held
in a participant's individual account today would result in a payment which is
substantially less than the current market value of the Units.
Q:
What will happen if I elect to accept the Rescission Offer for Units purchased
during the Rescission Period that I continue to hold in my account?
If you submit a Participant's Acceptance of the Rescission Offer form and the
price per Unit that you paid, plus applicable interest, is less than the market
value of a Unit as of the Expiration Date, Western, as plan administrator of
the Retirement Plan, will, as a fiduciary for you under the Retirement Plan,
direct the trustee not to effectuate the repurchase at such lower price.
However, if the price of our common stock were to decline sufficiently as of
the Expiration Date such that acceptance of the Rescission Offer would be
economically beneficial to you, we will repurchase your Units in accordance
with your Participant's Acceptance of the Rescission Offer form.
Q:
If I sold some of my Units purchased during the Rescission Period at a loss and
continue to hold other Units purchased during the Rescission Period, may I
accept the Rescission Offer with regard only to those Units which I sold at a
loss?
A:
Yes. You may accept the Rescission Offer in part by completing the
Participant's Acceptance of the Rescission Offer form and indicating in the
Participant's Election section of the form the Units for which you are
accepting the Rescission Offer.
Q:
I understand that acceptance of the Rescission Offer for my Units is not
economically beneficial under current market conditions because the amount I
would receive is less than what I would receive if I directed the trustee to
sell those Units. What should I do if I want to sell?
A:
Participants may direct the trustee to sell their Units and reallocate the
proceeds from the sale into another fund under the Retirement Plan at any time.
Such exchanges in participant's accounts can be made on line at www.401k.com or
by calling the Fidelity Retirement Benefits Line at 1-800-835-5098. As of
December 2, 2004, the closing sale price of the common stock (as reported on
the New York Stock Exchange) was $29.58 per share.
Q:
When does the Rescission Offer expire?
A:
The Rescission Offer expires on January 10, 2005.
Q:
What do I need to do now to accept the Rescission Offer?
A:
You should complete, sign and date the accompanying Participant's Acceptance of
the Rescission Offer form, included as Appendix I, and return the completed,
signed and dated Participant's Acceptance of the Rescission Offer form to the
Rescission Administrator, Causey Demgen & Moore Inc., Certified Public
Accountants and Consultants, 1801 California Street, Suite 4650, Denver,
Colorado 80202-2681, Attention: Mr. Thomas Ruygrok.
Q:
What do I need to do now to reject the Rescission Offer?
A:
You do not need to take any action to reject the Rescission Offer.
Q:
What happens if I do not return my Participant's Acceptance of the Rescission
Offer form?
A:
If you do not return your Participant's Acceptance of the Rescission Offer form
before the Expiration Date, you will be deemed to have rejected the Rescission
Offer. If you reject the Rescission Offer, you will retain ownership of the
Units (including the shares of common stock which, along with the short-term
investments, comprise the Units) and will not receive any payment. Persons who
fail to accept the Rescission Offer before the Expiration Date will be deemed
to have purchased Units, including the underlying common stock, registered
under the Securities Act, effective as of the date of this prospectus and,
unless owned by persons who may be deemed to be "affiliates" of us, such
securities will be freely tradable in the public market as of the Expiration
Date. Those shares owned by our affiliates will be subject to the restrictions
on resale provided in Rule 144 under the Securities Act.
If you fail to accept the Rescission Offer, it is unclear whether or not your
federal rights of rescission and damages will remain preserved. The staff of
the SEC takes the position that a person's federal right of rescission may
survive the Rescission Offer. However, if you fail to accept the Rescission
Offer you may be precluded from later seeking similar relief. Generally, the
federal statute of limitations for non-compliance with the requirement to
register securities under the Securities Act is one year. This one year period
has ended with regard to the securities subject to this Rescission Offer.
Western believes all the sales of shares of its common stock which are the
subject of the Rescission Offer were exempt from registration under state law,
and thus you may not be entitled to any state law remedies. However, under
state law, acceptance or rejection of the Rescission Offer may preclude you
from maintaining an action against Western in connection with the Units and the
underlying shares of common stock purchased during the Rescission Period.
Western does not make any representation as to the compliance of this
Rescission Offer with applicable state law.
Q:
Can I change my mind after I have mailed my signed Participant's Acceptance of
the Rescission Offer form?
A:
Yes. You can change your decision about accepting or rejecting our Rescission
Offer at any time before January 10, 2005. If you change your decision and
want to accept the Rescission Offer, you can do this by completing and
submitting the Participant's Acceptance of the Rescission Offer form. If you
change your decision and want to reject the Rescission Offer after having
submitted the Participant's Acceptance of the Rescission Offer form, then you
may reject the Rescission Offer by sending a notice to the Rescission
Administrator, Causey Demgen & Moore Inc., Certified Public Accountants and
Consultants, 1801 California Street, Suite 4650, Denver, Colorado 80202-2681,
Attention: Mr. Thomas Ruygrok. Your rejection notice must include your name,
address, social security number or taxpayer identification number and a clear
indication that you are rejecting the Rescission Offer and must be received no
later than January 10, 2005.
Q:
Who can help answer my questions?
A:
You may call the Rescission Administrator, Mr. Thomas Ruygrok, at
1-888-299-6475 Monday to Friday between 9:00 a.m. and 5:00 p.m., Mountain
Standard Time prior to the Expiration Date.
THE COMPANY
Western was incorporated in Delaware in 1989. Our principal offices
are located at 1099 18th Street, Suite 1200, Denver, Colorado 80202. We are an
independent natural gas explorer, producer, gatherer, processor, transporter
and energy marketer providing a broad range of services to our customers from
the wellhead to the sales delivery point. Our producing properties are located
primarily in Wyoming, including the developing Powder River Basin coal bed
methane play, where we are a leading acreage holder and producer. We also
design, construct, own and operate natural gas gathering, processing and
treating facilities in major gas-producing basins in the Rocky Mountain,
Mid-Continent and West Texas regions of the United States.
RISK FACTORS
Any investment in our common stock involves a high degree of risk. In
deciding whether you should keep your Units of the Western Gas Fund or accept
our offer to repurchase them for cash, less dividends on the common stock
included in the Units, plus interest, you should consider carefully the
following information, together with the other information contained in this
prospectus. If any of the following events actually occurs, our business,
financial condition or results of operations would likely suffer. In this case,
the market price of our common stock could decline, and you could lose all or
part of your investment in our common stock.
If you affirmatively reject or fail to accept this Rescission Offer, you may be
precluded from later rescinding the purchase of Units purchased during the
Rescission Period or receiving damages if you have sold such Units at a loss.
If you affirmatively reject or fail to reject this Rescission Offer it
is unclear whether or not your federal right of rescission or damages will
remain preserved. Although the staff of the SEC takes the position that a
person's federal right of rescission may survive a rescission offer, you may be
precluded from seeking similar relief. This Rescission Offer may also affect
your right of rescission and your right to damages under state law. Based on
the current market price of Western's common stock, the only participants who
would benefit economically from accepting this Rescission Offer are those who
sold Units purchased during the Rescission Period at a loss. If you do not
accept this Rescission Offer you may not be able to receive such damages once
this Rescission Offer expires.
Volatile product prices could have a material adverse effect on our financial
condition and results of operations and cash flows.
Our future financial condition and results of operations and cash
flows will depend significantly upon the prices received for our natural gas
and natural gas liquids, referred to herein as NGLs. Prices for natural gas and
NGLs are subject to fluctuations in response to changes in supply, market
uncertainty and a variety of additional factors that are beyond our control.
These factors include the level of domestic production, the availability of
imported oil and gas, actions taken by foreign oil and gas producing nations,
the availability of transportation systems with adequate capacity, the
availability of competitive fuels, fluctuating and seasonal demand for oil, gas
and NGLs, conservation and the extent of governmental regulation of production
and the overall economic environment. A substantial or extended decline in gas
and/or NGL prices would depress the levels of exploration, development,
production, gathering, processing and treating, transportation and marketing
activities, which could have a material adverse effect on our financial
condition and results of operations and access to capital.
Financial difficulties experienced by the companies with which we maintain
relationships could have a material adverse effect on our financial condition
and results of operations and cash flows.
If the companies with which we maintain trading or customer
relationships or with whom we participate in joint ventures experience
financial difficulties, we may be subject to increased exposure to credit risk.
Any inability of these companies to continue their trading relationships with
us or their participation in the joint ventures or to meet their capital
expenditure commitments and other financial obligations to us could have a
material adverse effect on our financial condition and results of operations
and cash flows.
The uncertainties of gas supply may affect our ability to replace reserves
connected to our facilities.
Numerous risks affect our continued ability to replace reserves
connected to our facilities. We must continually connect new wells to our
gathering systems in order to maintain or increase throughput levels to offset
natural declines in production volumes. In general, the volume of production
from a property declines as reserves are depleted. Historically, while
individual plants have experienced declines in connected reserves over time, we
have been successful in connecting additional reserves to more than offset the
natural declines and reserves connected to existing facilities. Successful
exploration activities, development projects or acquisitions of properties
containing proven reserves are necessary to maintain the level of connected
reserves. There is no assurance that we will continue to be successful in
replacing the volumes of connected reserves processed at our facilities.
Our estimates of gas reserves are subject to numerous uncertainties.
Our reserve estimates are subject to numerous uncertainties inherent
in the estimation of quantities of proved and probable reserves, the projection
of future rates of production and the timing of development expenditures. The
accuracy of such estimates is a function of the quality of available data and
of engineering and geological interpretation and judgment. Reserve estimates
are imprecise and should be expected to change as additional information
becomes available. Results of subsequent drilling, testing and production may
cause either upward or downward revisions of previous estimates. In addition,
the estimates of future net revenues from our proved reserves and the present
value thereof are based upon certain assumptions about production levels,
prices and costs, which may not be correct. Further, the volumes considered to
be commercially recoverable fluctuate with changes in prices and operating
costs. The meaningfulness of such estimates is highly dependent upon the
accuracy of the assumptions upon which they were based. Actual results may
differ materially from the results estimated. Our estimates of reserves
dedicated to our gathering and processing facilities are calculated by our
reservoir engineering staff and are based on publicly available data. These
estimates may be less reliable than the reserve estimates made for our own
producing properties since the data available for estimates of our own
producing properties also include our proprietary data.
Our ability to pay fixed charges and common stock dividends depends on many
factors.
Our financial and operational performance depends in part on
prevailing economic conditions and on various financial, business and other
factors beyond our control. We cannot assure you that our cash flows and
capital resources will be sufficient to pay our fixed charges, including
interest expense and common stock dividends.
Availability of financing to maintain our business and fund opportunities for
expansion is uncertain.
In order for us to maintain or expand our business, through either the
purchase or construction of new gathering and processing facilities or new
exploration and development opportunities, we will be required to finance such
activities, using cash flow, equity or debt financing or a combination thereof.
No assurance can be given that we can obtain financing on terms acceptable to
us to satisfy our requirements to maintain or expand our business. In addition,
no assurance can be given that appropriate opportunities for expansion at
levels of profitability that satisfy our target rates can be obtained. Natural
gas and oil price volatility make it difficult to estimate the value of
acquisitions and to budget and forecast the return on our projects. In
addition, unusually volatile prices often disrupt the acquisition and
divestiture market for gas and oil properties, as buyers and sellers have more
difficulty agreeing on the purchase price of properties. As a result, we may be
limited in our ability to expand our business.
The natural gas exploration, production, distribution and marketing businesses
are highly competitive, and there can be no assurance that we can compete
successfully with other companies in the industry.
We compete with other companies in the gathering, processing, treating
and marketing businesses both for supplies of natural gas and for customers for
our natural gas and NGLs, and for the acquisition of leaseholds. Competition
for natural gas supplies is primarily based on the efficiency and reliability
of our services, the availability of transportation and the ability to obtain a
satisfactory price for natural gas and NGLs. Our competitors for obtaining
additional gas supplies, for gathering and processing gas and for marketing gas
and NGLs include national and local gas gatherers, brokers, marketers and
distributors of various sizes, financial resources and experience. For
marketing customers that have the capability of using alternative fuels, such
as oil and coal, we also compete based primarily on price and availability of
such alternative fuels. Our competitors for obtaining leaseholds and acquiring
production or new exploration and development prospects include major and large
independent oil companies as well as smaller independent oil companies and
brokers. Competition for sales customers is primarily based upon reliability
and price of deliverable natural gas and NGLs. Suppliers in our gas marketing
transactions may request additional security such as letters of credit that are
not required of certain of our competitors. If additional security is required,
our marketing margins and volumes may be adversely impacted. There can be no
assurance that we can compete successfully with other companies in the
industry.
Our operations are subject to environmental laws and regulations that could
affect our financial position or results of operations.
Our exploration and development activities and the construction and
operation of our gathering systems, plants and other facilities used for the
gathering, transporting, processing, treating or storing of natural gas and
NGLs are subject to federal, state and local environmental laws and
regulations, including those that can impose obligations to clean-up hazardous
substances at our facilities or at facilities to which we send wastes for
disposal. In most instances, the applicable environmental regulatory
requirements relate to water and air pollution control or waste management.
Environmental regulation can increase the cost of planning, designing,
constructing and operating our facilities or well sites.
Under the Clean Air Act, as amended, individual states are required to
adopt regulations to implement an operating permit program. We do not believe
that compliance with the Clean Air Act will require any material capital
expenditures, although it will cause increased permitting costs in future years
and will increase certain operating costs, such as emissions fees, on an
on-going basis. We do not believe that such cost increases will have a material
adverse effect on our financial position or results of operations and cash
flows.
We believe that we are in substantial compliance with current
applicable material environmental laws and regulations. We believe that it is
reasonably likely that the trend in environmental legislation and regulation
will continue toward stricter standards. We are unaware of future environmental
standards that are reasonably likely to be adopted that will have a material
adverse effect on our financial position or results of operations and cash
flows, but cannot rule out that possibility.
Exploration and development is subject to numerous operational risks.
The business of exploring for, developing or acquiring reserves is
capital intensive. The cost of drilling, completing and operating wells and of
installing production facilities and pipelines is often uncertain. To the
extent cash flow from operations is reduced and external sources of capital
become limited or unavailable, our ability to make the necessary capital
investment to maintain or expand our asset base of reserves will be impaired.
Future increases in the costs of conducting exploration and development may not
be fully offset by increases in the prices received for natural gas or oil. In
addition, there can be no assurance that our future exploration, development
and acquisition activities will result in additional proved reserves or that we
will be able to drill productive wells at acceptable costs. Also, our drilling
operations could diminish or cease because of any of the following, among other
reasons:
o failure or delays in obtaining permits from regulatory agencies,
such as those issued by the Bureau of Land Management and
various state agencies, for our operations in a timely manner;
o title problems;
o presence of water or other substances in the well that could
cause dilution or damage to our system;
o sour gas leakage;
o fire;
o weather conditions;
o noncompliance with, or changes in, governmental requirements or
regulations; and o shortage or delays in the delivery or
availability of equipment.
Our business is subject to numerous other operational risks.
The natural gas and NGL business involves certain operating hazards
such as well blowouts, craterings, explosions, uncontrollable flows of natural
gas or well fluids, fires, formations with abnormal pressures, pipeline
ruptures or spills, pollution, releases of toxic gas and other hazards and
risks, any of which could affect our financial position or results of
operations and cash flows. In addition, the failure of an operator of our wells
to adequately perform operations, or such operator's breach of the applicable
agreements, could also have a material adverse effect on our financial
condition and results of operations and cash flows.
Regulations may have a significant impact upon our overall operations.
The exploration, development and production of natural gas and NGLs
are subject to federal, state and local laws and regulations that can have a
significant impact upon our overall operations. We believe that we are in
substantial compliance with applicable material laws and regulations. In
addition, our drilling and production is dependent on the receipt of various
regulatory permits, including Bureau of Land Management drilling permits and
Wyoming Department of Environmental Quality water discharge permits. The pace
of our development has been and may continue to be delayed due to the timing
and rate at which permits are granted to accomplish our drilling and production
target and fully develop our leasehold in future years. There can be no
assurance that a sufficient number of these permits will be obtainable or
issued in a timely fashion to enable us to realize our development plans.
As a marketer of natural gas and NGLs, we depend on the transportation
and storage services offered by various interstate and intrastate pipeline
companies for the delivery and sale of our own gas supplies as well as those we
process and/or market for others. Both the performance of transportation and
storage services by interstate pipelines and the rates charged for such
services are subject to the jurisdiction of the Federal Energy Regulatory
Commission, referred to herein as FERC, or state regulatory agencies. An
inability to obtain transportation and/or storage services at competitive rates
can hinder our processing and marketing operations and/or affect our sales
margins.
We can make no assurance as to the ultimate regulations passed by FERC
or the effects such regulations may have on the operating costs of MIGC, Inc.,
an interstate pipeline located in the Powder River Basin in Wyoming that we own
and operate.
In addition, the construction of additional gathering, processing and
treating facilities and the development of natural gas reserves require permits
from several federal, state and local agencies. In the past we have been
successful in receiving all permits necessary to conduct our operations. There
can be no assurance, however, that permits in the future will be obtainable or
issued in a timely fashion or that the terms of any permits will be compatible
with our business plans.
There is no assurance that the laws, regulations, policies or current
administrative practices of any government body, organization or regulatory
agency, will not be changed, applied or interpreted in a manner which will have
a significant impact on our overall operations.
Operational risks may result in curtailment or suspension of operations.
We are subject to various hazards which are inherent in the industry
in which we operate such as explosions, product spills, leaks and fires and
acts of sabotage or terrorism, each of which could cause personal injury and
loss of life, severe damage to and destruction of property and equipment, and
pollution or other environmental damage, and may result in curtailment or
suspension of operations at the affected facility. We maintain physical damage,
comprehensive general liability, workers' compensation and business
interruption insurance. Such insurance is subject to deductibles that we
consider reasonable. We are not fully insured against all risks in our
business; however, we believe that the coverage we maintain is adequate and
consistent with other companies in the industry. Consistent with insurance
coverage typically available to the natural gas industry, our insurance
policies do not provide coverage for losses or liabilities relating to
pollution, except for sudden and accidental occurrences.
USE OF PROCEEDS
Western will receive no proceeds from the Rescission Offer. The common
stock was originally purchased by the trustee in brokerage transactions in the
open market for which Western did not receive any proceeds.
THE RESCISSION OFFER
Background and Reasons for the Rescission Offer
The Retirement Plan is a qualified defined contribution plan under
Section 401(k) of the Internal Revenue Code of 1986, as amended. The purpose of
the Retirement Plan is to provide a voluntary, systematic method for a
participant to save a specified percentage of the participant's compensation
for retirement and to defer federal income tax and, where allowed, state, city
and county income taxes, on such compensation, together with matching
contributions, up to a maximum percentage, made by Western, referred to herein
as Company Matching Contributions.
The Retirement Plan allows part-time and full-time employees to
contribute, through automatic payroll deduction, up to 75% of eligible pay on a
pre-tax basis up to the annual Internal Revenue Service dollar limit rather
than receiving that amount as taxable income. During the Rescission Period
Western matched employee contributions at the following percentage rates up to
a maximum of 5% of eligible pay: 60% of the contributions of an employee with
less than three years of service; 80% of the contributions of an employee with
three or more but less than five years of service, and 100% of employee
contributions for employees with five or more years of service. During the
Rescission Period Western's Matching Contributions were vested 20% every year
starting with the second year of continuous service and fully vested after the
sixth year of service. In addition, Western may make discretionary
contributions to participants' accounts, which, together with the Matching
Contributions, are referred to herein as Western Contributions. Amounts in
participants' accounts are held in a trust fund maintained for the benefit of
participants in the Retirement Plan. A participant has the right to decide how
to invest Western contributions. There are currently 16 different investment
choices under the Retirement Plan. A participant must indicate the percentage
of his or her contribution to be allocated to each investment choice. All
contributions to a participant's account are invested in accordance with the
participant's investment election.
Beginning in January 1989, participants were first given the option to
invest their contributions in the Western Gas Fund. The Western Gas Fund is
comprised of shares of common stock of Western, purchased primarily in the open
market by the trustee, Fidelity Management Trust Company, and short-term
investments. A participant's ownership in the Western Gas Fund is measured in
Units rather than in shares of common stock. As a result of the Stock Split,
each Unit equals a two-thirds share of common stock plus in each case a varying
amount of short-term investments. To effectuate participant investment
elections and therefore purchases and sales of Units, the trustee purchases and
sells Western common stock in the open market at market prices.
Western is required to register the shares of common stock purchased
by the trustee of the Retirement Plan under the Securities Act. Although all
the purchases by the trustee during the Rescission Period were made in the open
market and in a manner consistent with the Retirement Plan and the investment
elections of the Retirement Plan participants, Western has determined that some
of the shares of its common stock purchased by the trustee and allocated to the
Western Gas Fund may not have been properly registered in accordance with the
Securities Act. Western is making this Rescission Offer with regard to all
shares of its common stock purchased by the trustee and included in Units
purchased by Retirement Plan participants between August 14, 2001 and August
14, 2002. This offer is being made to ensure compliance with the Securities
Act.
Western's Board of Directors has approved the Rescission Offer in
order to limit any contingent liability Western may have as a result of
possible noncompliance with applicable federal registration requirements in
connection with the purchase of the shares of common stock that, along with the
short-term investments, comprise the Units.
If you affirmatively reject or fail to accept the Rescission Offer
before the Expiration Date, you will retain ownership of the Units (including
the shares of common stock which, along with the short-term investments
comprise the Units) you received and will not receive any payment for those
Units. In addition, the shares subject to the Rescission Offer owned by persons
who affirmatively reject or fail to timely reject the Rescission Offer will,
for purposes of applicable federal securities law, be registered securities as
of the date of this prospectus and, unless owned by persons who are deemed to
be "affiliates" (as defined in Rule 144 under the Securities Act), will be
freely tradeable in the public market as of the Expiration Date. Those shares
owned by our affiliates will be subject to the restrictions on resale provided
in Rule 144 under the Securities Act.
Western believes that your acceptance of the Rescission Offer will,
under general theories of estoppel, preclude you from later seeking similar
relief. For federal securities law purposes, nonacceptance of the Rescission
Offer may not terminate a participant's right to bring a civil action against
Western for failure to register the shares under the Securities Act before
expiration of the applicable statute of limitations. The staff of the SEC takes
the position that a person's federal right of rescission may survive a
Rescission Offer. The statute of limitations for enforcement of such statutory
rights by a stockholder is one year commencing on the date of the sale of
common stock sold in violation of the federal registration requirements, but in
no event later than three years after the common stock was offered to the
participants. This one year period has ended with regard to the securities
subject to this Rescission Offer.
The above discussion relates primarily to your potential rescission
rights and does not address in detail the antifraud provisions of applicable
federal securities laws or rights under state securities laws, common law or
equity. The purchases subject to this Rescission Offer were made by residents
of the states of Arizona, Colorado, Kansas, Louisiana, New Mexico, Oklahoma,
Texas, Utah and Wyoming. Western believes that all the sales of shares of its
common stock which are the subject of the Rescission Offer were exempt from
registration under the laws of such states and that no violation of state
securities laws occurred in connection with such sales. Furthermore, Western
believes that this Rescission Offer is exempt from registration under the laws
of such states and thus need not comply with the laws of such states regulating
such offers. Thus, Western does not make any representation as to the
compliance of this Rescission Offer with state law. However, under state law,
acceptance or rejection of the Rescission Offer may preclude you from
maintaining an action against Western in connection with the Units and the
underlying shares of common stock purchased during the Rescission Period. You
may wish to consult with an attorney regarding all of your legal rights and
remedies before deciding whether or not to accept the Rescission Offer.
Terms of the Rescission Offer
A participant who elected to allocate some of his or her contributions
in the Retirement Plan to the purchase of Units in the Western Gas Fund at any
time between August 14, 2001 and August 14, 2002, and who has already directed
and caused the sale of such Units at a loss, may direct the trustee to receive
(and re-invest) for the participant's account the price paid for such Units
less the proceeds of such sale, plus interest at the applicable rate for the
state in which such participant resided at the time of purchase (as set forth
in the table below). Interest will be paid on the amount of the price
originally paid for the Units during the period from the date of purchase of
the Units until the date of sale of such Units. Interest will also be paid on
the loss realized from the date of sale of the Units through (but not
including) the Payment Date. A participant who elects to accept the Rescission
Offer and still holds any such Units may direct that a sale of the Units
purchased during the Rescission Period be made by the trustee to Western at the
price the participant paid for the Units, plus applicable interest for the
period from the date of purchase of the Unit by the participant pursuant to the
Retirement Plan through (but not including) the Payment Date. However, in the
event such a participant elects to accept the Rescission Offer and the price
per Unit that such participant paid, plus applicable interest, is less than the
current market value of a Unit as of the Expiration Date, Western, as plan
administrator of the Retirement Plan, has determined that it, as a fiduciary
for participants under the Retirement Plan, will direct the trustee not to
effectuate the repurchase at such lower price. If a participant continues to
hold the Units and the market price of our common stock has decreased such that
it would be economically beneficial to accept the Rescission Offer as of the
Expiration Date, the number of Units owned by the participant in the Western
Gas Fund will be reduced by the number of Units purchased by the participant
during the Rescission Period and for which the participant has elected to
accept the Rescission Offer. The proceeds payable to the participant under the
Rescission Offer will be reinvested by the trustee for the participant's
account in the Managed Income Portfolio, which may then be redirected to other
funds at the participant's election. Under the terms of the Retirement Plan,
participants are limited to a maximum of three exchanges into the Western Gas
Fund per calendar quarter. An acceptance of the Rescission Offer by the
participant resulting in a reduction in the number of Units owned by the
participant will not be treated as an exchange nor counted toward the maximum
number of exchanges permitted by a participant in the Western Gas Fund for the
applicable calendar quarter.
The interest rate per annum to be paid is determined by reference to
state law and therefore will depend on the state of residence of each
participant at the time the Units were purchased. The table below sets forth
the interest rates for the states in which recipients of this Rescission Offer
resided at the time of purchase.
- ------------------------------------------------------------------------------
State Interest Rate State Interest Rate
- ------------------------------------------------------------------------------
Arizona 10% New Mexico 8 3/4%
- ------------------------------------------------------------------------------
Colorado 8% Texas 6%
- ------------------------------------------------------------------------------
Kansas 15% Utah 12%
- ------------------------------------------------------------------------------
Louisiana 5 1/4% Wyoming 6%
- ------------------------------------------------------------------------------
Oklahoma 10%
- ------------------------------------------------------------------------------
If a participant no longer holds in its account all the Units acquired
during the Rescission Period or such participant wishes to have repurchased
only a portion of the Units currently in his or her account, we will only
repurchase those Units that are not deemed sold, but, as noted above, we, as
plan administrator of the Retirement Plan and a fiduciary for participants of
the Retirement Plan, will not repurchase any such Units if such purchase would
not be economically beneficial to you as of the Expiration Date. Units are
deemed sold in the order in which a participant purchased them. In order to
determine which Units are eligible for repurchase, all Units acquired on a
participant's behalf during the Rescission Period will be matched against all
sales of Units during or following such period, by matching the first Unit
acquired with the first Unit sold. Only those purchases that do not have
matching sales are eligible for repurchase as part of the Rescission Offer.
Participants are entitled to damages for those Units that are deemed sold at a
loss. In order to determine the amount of damages payable, Western will use the
same procedure as is used to determine which Units are eligible for repurchase.
If the participant has directed and caused a full distribution from
the Retirement Plan and no longer has an individual account in the Retirement
Plan, the participant may be entitled to obtain relief on the above terms,
except any amounts paid in respect of the Rescission Offer will be paid
directly to the participant or his or her beneficiary, or at such participant's
direction, directly to an individual retirement account or other qualified
retirement plan, within 30 days of such participant's acceptance of the
Rescission Offer.
The Rescission Offer will expire on January 10, 2005, the Expiration
Date.
As of August 14, 2002, the end of the Rescission Period, the closing
sale price of the common stock (as reported on the New York Stock Exchange) was
$16.72 per share, as adjusted to reflect the Stock Split. For the fifty-two
week period ending on such date, the per share sales price of the common stock,
as adjusted to reflect the Stock Split, ranged from a high of $20.06 to a low
of $11.95.
How to Accept or Decline this Rescission Offer
A PARTICIPANT IS NOT LEGALLY REQUIRED TO ACCEPT THE RESCISSION OFFER.
Acceptance of the Rescission Offer is optional for each participant who
purchased Units in the Western Gas Fund representing interests in shares of
Western's common stock covered by this Rescission Offer. In light of the
substantial increase in the market value of the common stock since the end of
the Rescission Period, acceptance of the Rescission Offer is economically
beneficial only for those participants who have sold Units purchased during the
Rescission Period at a loss. Western, as a fiduciary for participants under the
Retirement Plan, will not effectuate any repurchases pursuant to the Rescission
Offer unless such repurchases are economically beneficial to the participants
as of the Expiration Date. A repurchase is not economically beneficial unless
the market value of the common stock decreases to the extent that the value of
a Unit is less than the price paid by the participant during the Rescission
Period plus interest. If a participant elects to reject the Rescission Offer,
the participant will continue to hold the same number of Units in the Western
Gas Fund. In the event the participant elects to accept the Rescission Offer,
the participant must detach and complete the form "Participant's Acceptance of
Rescission Offer," and mail or return it to the Rescission Administrator,
Causey Demgen & Moore Inc., as soon as practicable after the date of receipt of
this prospectus but in no event having a postmark later than the Expiration
Date.
ANY PARTICIPANT WHO FAILS TO NOTIFY WESTERN IN WRITING OF HIS OR HER
ACCEPTANCE OF THE RESCISSION OFFER ON OR PRIOR TO THE EXPIRATION DATE WILL BE
DEEMED TO HAVE REJECTED THE RESCISSION OFFER. ACCEPTANCE OR REJECTION OF THE
RESCISSION OFFER MAY NOT TERMINATE A PARTICIPANT'S RIGHT TO BRING A CIVIL
ACTION AGAINST WESTERN FOR FAILURE TO REGISTER THE SHARES UNDER FEDERAL
SECURITIES LAWS. HOWEVER, FEDERAL LAW DOES PROVIDE THAT A PARTICIPANT MAY LOSE
ANY RESCISSION RIGHTS UNDER FEDERAL SECURITIES LAWS ONE YEAR FROM THE DATE OF
PURCHASE OF SUCH SHARES.
Questions about the Rescission Offer
Participants who have questions about the Rescission Offer may call
the Rescission Administrator, Mr. Thomas Ruygrok, at 1-888- 299-6475 Monday to
Friday between 9:00 a.m. and 5:00 p.m., Mountain Standard Time prior to the
Expiration Date.
Use of Stock Repurchased by Western in Rescission Offer
The shares of common stock which are included in the Units repurchased
by Western pursuant to the Rescission Offer, if any, will become treasury
shares. Western may re-sell such treasury shares to the trustee of the
Retirement Plan as the trustee may request from time to time in order to
fulfill the common stock requirements of the Western Gas Fund. Western has no
other plans to sell such treasury shares.
Tax Effects of Rescission Offer
A participant's acceptance or rejection of this Rescission Offer, or
the sale of the Units comprised of Western's common stock and short-term
investments, to Western pursuant to this Rescission Offer (in the event that
the market price of our common stock has decreased such that it would be
economically beneficial for a participant to accept the Rescission Offer), is
not considered to be a taxable event before withdrawal or distribution of funds
from such participant's Retirement Plan account to the participant or his or
her beneficiary. All funds paid by Western for interests in common stock of a
participant as a result of this Rescission Offer will be paid to the trustee
and remain in the Retirement Plan trust and will be reinvested in accordance
with the participant's existing investment option(s) in the Retirement Plan.
Upon any later withdrawal or distribution, any gain resulting from this
Rescission Offer will generally be taxable as ordinary income to the
participant or his or her beneficiary. An additional 10 percent income tax may
be imposed in cases of early withdrawal. Special tax advantages for some
lump-sum distributions and rollovers are allowed. Each participant should
consult with his/her own tax advisor with regard to the proper tax treatment
for him/her in connection with the Rescission Offer.
Funding the Rescission Offer
Western has sufficient funds available to pay for any damage claims
and the purchase of any Units which may be tendered to it as a result of the
Rescission Offer.
INTERESTS OF NAMED EXPERTS AND COUNSEL
John C. Walter, who is giving an opinion regarding the legality of the
securities registered hereby, is Executive Vice President, General Counsel and
Secretary of Western. As of December 2, 2004, Mr. Walter owned 7,364 shares of
common stock and options to purchase 150,120 shares of common stock.
APPENDIX I
PARTICIPANT'S ACCEPTANCE OF THE RESCISSION OFFER
_______________
YOU MAY ELECT TO ACCEPT OR REJECT THE RESCISSION OFFER. IF YOU WISH TO
REJECT THE RESCISSION OFFER, DO NOT EXECUTE AND RETURN THE FORM. YOU NEED TO DO
NOTHING TO REJECT THIS RESCISSION OFFER.
IF YOU WISH TO ACCEPT THE RESCISSION OFFER, PLEASE EXECUTE AND RETURN
THIS FORM, PURSUANT TO THE INSTRUCTIONS BELOW.
_______________
Ladies and Gentlemen:
The undersigned acknowledges receipt of a prospectus dated December 6,
2004, of Western Gas Resources, Inc., together with the Appendix thereto,
pursuant to which Western offers to rescind purchases of units by Fidelity
Management Trust Company, as trustee of the Western Gas Resources, Inc.
Retirement Plan, including interests in shares of Western common stock between
August 14, 2001 and August 14, 2002, on the undersigned's behalf and invested
in units of the Western Gas Fund. The undersigned understands that, as a result
of a stock split in the form of a stock dividend of one share of common stock
of Western for every share of common stock issued, as of June 4, 2004
distributed on June 18, 2004, that each unit equals a two-thirds share of
common stock plus a varying amount of short-term investments. The undersigned
further acknowledges that if the Rescission Offer is accepted by the
undersigned by January 10, 2005, the Expiration Date, upon verification by
Causey Demgen & Moore Inc., the Rescission Administrator, Western (i) in the
case of units purchased during the Rescission Period but disposed of by the
undersigned at a loss, will pay to the trustee the original purchase price paid
to purchase the units less the amount received on the sale of such units plus
applicable interest. Interest, in the case of units purchased during the
relevant period but disposed of by the undersigned at a loss, will be
calculated on the amount of the price originally paid for the units during the
period from the date of purchase of the units until the date of sale of such
units and on the loss realized from the date of sale of the units through (but
not including) the date of payment of the Damages, the Payment Date, and (ii)
in the case of units purchased during the relevant period and still held in the
undersigned's account, (a) as a fiduciary for you under the Retirement Plan,
will not effectuate any repurchase if the market value of a Unit as of the
Expiration Date is greater than the price you paid during the Rescission Period
plus interest, and (b) will pay to the trustee the original purchase price paid
to purchase the units plus applicable interest thereon from the date of
purchase through (but not including) the Payment Date if the market value of
the common stock decreases to the extent that, as of the Expiration Date, the
value of a unit is less than the price paid by the participant during the
Rescission Period plus interest. Interest, in the case of units purchased
during the relevant period but disposed of by the undersigned at a loss, will
be calculated on the amount of the price originally paid for the units during
the period from the date of purchase of the units until the date of sale of
such units and on the loss realized from the date of sale of the units through
(but not including) the Payment Date. The interest rate per annum to be paid is
determined by reference to state law and therefore will depend on the state of
residence of each participant at the time the units were purchased. The
interest rates for the applicable states are set forth in the prospectus under
the caption "The Rescission Offer-Terms of the Rescission Offer."
If the undersigned accepts this Rescission Offer for any units
purchased during the relevant period and still held in the undersigned's
Retirement Plan account, the undersigned understands that the number of units
held by the undersigned in the Western Gas Fund will be reduced by the number
of units corresponding to those acquired in the rescinded purchases, and all
proceeds from such account balance reduction will be paid to the trustee for
the undersigned's account for investment in the Managed Income Portfolio. If
the undersigned accepts the Rescission Offer only for those units purchased
during the relevant period but sold at a loss prior to the date hereof, the
number of units still held in the Western Gas Fund, if any, will be otherwise
unaffected and any proceeds received from the Rescission Offer will be paid to
the trustee for the undersigned's account for investment in the Managed Income
Portfolio.
If the undersigned has previously directed and caused the trustee to
distribute all of the undersigned's investment in the Retirement Plan and no
longer holds an individual account in the Retirement Plan, the proceeds will be
paid directly to the undersigned or the undersigned's beneficiary or, at the
undersigned's direction, to an individual retirement account or qualified
retirement plan.
Therefore, the undersigned hereby accepts the Rescission Offer for the
following of the undersigned's units, including interests in the common stock
included therein, on the terms set forth in this letter. The undersigned
directs the trustee to tender, subject to the conditions of the Rescission
Offer, the shares of common stock represented by the undersigned's units to
Western on the undersigned's behalf. Furthermore, the undersigned directs that
all payments be made to the trustee for the undersigned's Retirement Plan
account unless the undersigned has previously directed and caused a prior
distribution of all of the undersigned's investment in the Retirement Plan.
Participation Election
I hereby accept the Rescission Offer for the following units:
Units Currently Held:
Date of Purchase Number of Units
_____________ _____________
_____________ _____________
______________ _____________
Units Previously Sold:
Date of Purchase Date of Sale Number of Units
_____________ __________ ______________
_____________ __________ ______________
For former participants in the Retirement Plan only: Please complete one of the
following:
1. You are hereby instructed to deposit the proceeds of the Rescission Offer
payment in the following individual retirement account/qualified retirement
plan:
Bank or Institution: _________________
Account Name: ________________________
Account Number: ______________________
2. You are hereby instructed to make payable the proceeds of the Rescission
Offer payment as follows:
Name:
Address:
Any additional payment instructions:
________________________________ ______________________________
Name (please print) Signature
________________________________ ______________________________
Street Address Date:
________________________________ ______________________________
City, State and Zip Code of Social Security Number or
Residence Taxpayer Identification Number
Instructions: In order to indicate your acceptance of the Rescission Offer,
you must:
(1) Complete the Participation Election,
(2) Sign the form and provide your complete address, date, and Social
Security or Taxpayer Identification Number, and
(3) Mail the form to the Rescission Administrator, Causey Demgen & Moore
Inc., Certified Public Accountants and Consultants, 1801 California Street,
Suite 4650, Denver, Colorado 80202-2681, Attention: Mr. Thomas Ruygrok.
Delivery Instructions: This form should be mailed to Causey Demgen & Moore Inc.
as soon as practicable, but in no event having a postmark later than the
Expiration Date of this Rescission Offer, 11:59 p.m., Mountain Standard Time,
January 10, 2005.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 15. Indemnification of Directors and Officers.
Western's Bylaws incorporate substantially the provisions of the
General Corporation Law of the State of Delaware providing for indemnification
of directors, officers, employees, and agents of Western against expenses,
judgments, fines, settlements and other amounts actually and reasonably
incurred in connection with any proceeding arising by reason of the fact that
such person is or was an officer, director, employee or agent of Western. In
addition, Western is authorized to enter into indemnification agreements with
its directors and officers providing mandatory indemnification to them to the
maximum extent permissible under Delaware law.
As permitted under Delaware law, Western's Certificate of
Incorporation provides for the elimination of the personal liability of a
director to the corporation and its stockholders for monetary damages arising
from a breach of the director's fiduciary duty of care. The provision is
limited to monetary damages, applies only to a director's actions while acting
within his capacity as a director, and does not entitle Western to limit
director liability for any judgment resulting from (a) any breach of the
director's duty of loyalty to Western or its stockholders; (b) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law; (c) paying an illegal dividend or approving an
illegal stock repurchase; or (d) any transaction from which the director
derived an improper personal benefit. In addition, Section 145 of the General
Corporation Law of the State of Delaware provides generally that a person sued
as a director, officer, employee or agent of a corporation may be indemnified
by the corporation for expenses, including counsel fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if in the case of other than
derivative suits, the person has acted in good faith and in a manner the 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 that the person's conduct was unlawful). In the
case of a derivative suit, a director, officer, employee or agent of the
corporation who is not protected by the Certificate of Incorporation, may be
indemnified by the corporation for expenses, including counsel fees, actually
and reasonably incurred by the person in connection with defense or settlement
of such action or suit if such person has acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best interests of
the corporation, except that no indemnification shall be made in the case of a
derivative suit in respect of any claim as to which a director, officer,
employee or agent has been adjudged to be liable to the corporation unless the
Delaware Court of Chancery or the court in which such action or suit was
brought shall determine that such person is fairly and reasonably entitled to
indemnity for proper expenses. Indemnification is mandatory in the case of a
present or former director or officer who is successful on the merits in
defense of a suit against such person.
Western also maintains directors' and officers' liability insurance.
The specific terms and provisions of the insurance policies limit such
coverage.
Item 16. Exhibits.
The following exhibits are filed as part of this registration
statement.
Exhibit Number Description
- --------------- --------------------------------------------------------
4.1 The Certificate of Incorporation of the Registrant (Filed
as Exhibit 3.1 to the Registrant's Registration Statement
on Form S-1, Registration No. 33-31604, and incorporated
herein by reference).
4.2 Certificate of Amendment to the Certificate of
Incorporation of the Registrant (Filed as Exhibit 3.2 to
the Registrant's Registration Statement on Form S-1,
Registration No. 33-31604, and incorporated herein by
reference).
4.4 The Amended and Restated Bylaws of the Registrant,
adopted on May 7, 2004, and in effect on the date hereof
(Filed under cover of Form 8-K, dated May 7, 2004, and
incorporated herein by reference).
4.5 Rights Agreement, dated as of March 22, 2001, between the
Registrant and Fleet National Bank (f/k/a Bank Boston,
NA), as Rights Agent, including the form of Certificate
of Designation, Preferences and Rights as Exhibit A, the
form of Rights Certificate as Exhibit B and the Summary
of Rights to Purchase Preferred Stock as Exhibit C.
Pursuant to the Rights Agreement, printed Rights
Certificates will not be mailed until after the
Distribution Date (as such term is defined in the Rights
Agreement) (Filed as Exhibit 1 to the Registrant's
Registration Statement on Form 8-A (No. 001-10389), dated
March 29, 2001, and incorporated herein by reference).
4.6* Restated Retirement Plan of the Registrant dated December
20, 2002.
4.7* First Amendment to the Retirement Plan of the Registrant
dated December 23, 2003.
4.8* Second Amendment to the Restated Retirement Plan of the
Registrant dated January 5, 2004.
5.1 Opinion of John C. Walter, as to the legality of the
common stock offered hereby.
5.2 Letter, dated March 28, 1991, of the Internal Revenue
Service with respect to the Retirement Plan (Filed as
Exhibit 5.2 to the Registrant's Registration Statement on
Form S-8, Registration Number 333-98107, and incorporated
herein by reference).
23.1 Consent of John C. Walter (included as part of Exhibit
5.1 hereto).
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Netherland Sewell and Associates, Inc.
24.1 Powers of Attorney (included on the signature page to
this Registration Statement).
99.1 Letter to participants regarding the Rescission Offer.
______________
*Previously filed.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) that, for the purpose of determining any liability
under the Securities Act, the information omitted
from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the
Registrant under Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part
of this registration statement as of the time the
Commission declared it effective.
(2) to file during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement that, for the purpose of
determining any liability under the Securities Act,
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security
holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934, as amended; and,
where interim financial information required to be
presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is
sent or given, the latest quarterly report that is
specifically incorporated by reference in the
prospectus to provide such interim financial
information.
(4) for purposes of determining any liability under the
Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 herein, or
otherwise, the Registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to
the Registration Statement to be signed in its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on this
3rd day of December, 2004.
WESTERN GAS RESOURCES, INC.
By: /s/ John C. Walter
_______________________________________
Name: John C. Walter
Title: Executive Vice President, General
Counseland Secretary
Pursuant to the requirements of the Securities Act, this Amendment No.
3 to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature* Title Date
- ------------------------------------------- ------------------------------------------- ---------------------
/s/ Peter A. Dea December 3, 2004
____________________________________
Peter A. Dea Chief Executive Officer, President and
Director (Principal Executive Officer)
/s/ James A. Senty December 3, 2004
____________________________________
James A. Senty Chairman of the Board and Director
/s/ Walter L. Stonehocker December 3, 2004
____________________________________
Walter L. Stonehocker Vice Chairman of the Board and Director
/s/ William J. Krysiak December 3, 2004
____________________________________
William J. Krysiak Executive Vice President, Chief Financial
Officer (Principal Financial and
Accounting Officer)
/s/ Dean Phillips December 3, 2004
____________________________________
Dean Phillips Director
December 3, 2004
____________________________________
Joseph E. Reid Director
/s/ Richard B. Robinson December 3, 2004
____________________________________
Richard B. Robinson Director
December 3, 2004
____________________________________
Ward Sauvage Director
/s/ Bill M. Sanderson December 3, 2004
____________________________________
Bill M. Sanderson Director
/s/ Brion G. Wise December 3, 2004
____________________________________
Brion G. Wise Director
* A Power of Attorney, authorizing John C. Walter and William J. Krysiak, or
either of them, with full power of substitution and resubstitution, to sign the
Registration Statement and amendments thereto on behalf of and as
attorney-in-fact and agent for the directors listed above, was filed with the
Securities and Exchange Commission as part of the Registration Statement.