UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 23, 2008 (December 19, 2008)
WESTERN GAS PARTNERS, LP
(Exact name of registrant as specified in its charter)
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001-34046
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26-1075808 |
(State or other jurisdiction
of incorporation or organization)
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(Commission
File Number)
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(IRS Employer
Identification No.) |
1201 Lake Robbins Drive
The Woodlands, Texas 77380-1046
(Address of principal executive office) (Zip Code)
(832) 636-6000
(Registrants’ telephone number, including area code)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
Term Loan Agreement
On December 19, 2008, in connection with the consummation of the transactions contemplated by
the Contribution Agreement (the “Contribution Agreement”), dated November 11, 2008, among Western
Gas Resources, Inc. (“WGR”), WGR Asset Holding Company LLC, WGR Holdings, LLC (“WGR Holdings”),
Western Gas Holdings, LLC (the “General Partner”), Western Gas Partners, LP (the “Partnership”),
Western Gas Operating, LLC (“Western Gas Operating”) and WGR Operating, LP, the Partnership entered
into a Term Loan Agreement (the “Term Loan Agreement”) with Anadarko Petroleum Corporation
(“Anadarko”) under which Anadarko loaned $175,000,000 to the Partnership to fund a portion of the
Partnership’s acquisition of certain assets pursuant to the Contribution Agreement, as described
further under Item 2.01 below. The borrowing under the Term Loan Agreement has a maturity of five
years and will bear interest at a rate of 4% through the period ending on December 1, 2010.
Following that date, interest will be assessed at a floating rate, equivalent to the LIBO Rate
(defined in the Term Loan Agreement) plus 150 basis points. The Partnership has the option to
repay the loan (plus accrued and unpaid interest) in whole or in part commencing upon the second
anniversary of the date of the Term Loan Agreement. The terms of the Term Loan Agreement provide
that amounts due are non-recourse to the General Partner and limited partners of the Partnership.
The Term Loan Agreement contains customary events of default, including (i) nonpayment of principal
when due or nonpayment of interest or other amounts within three business days of when due; (ii)
bankruptcy or insolvency with respect to the Partnership; or (iii) a change of control. All
amounts due by the Partnership under the Term Loan Agreement are unconditionally and irrevocably
guaranteed by WGR. All of the parties to the Contribution Agreement and the Term Loan Agreement
are affiliates of Anadarko.
The foregoing description of the Term Loan Agreement is incomplete and is qualified in its
entirety by reference to the full and complete terms of the Term Loan Agreement, which is attached
to this Current Report on Form 8-K as Exhibit 10.1.
Omnibus Agreement Amendment
On December 19, 2008, in connection with the consummation of the transactions contemplated by
the Contribution Agreement, the Partnership entered into an amendment (the “Omnibus Agreement
Amendment”) to the Omnibus Agreement dated May 14, 2008 among the Partnership, the General Partner,
and Anadarko. The Omnibus Agreement Amendment increases the limit on the amount of general and
administrative expenses required to be reimbursed by the General Partner, the Partnership and
certain of the Partnership’s subsidiaries to Anadarko from $6.0 million annually to $6.65 million
annually. This increase is attributable to the increase in services to be provided by Anadarko to
the Partnership as a result of the Partnership’s acquisition of assets pursuant to the Contribution
Agreement.
The foregoing description is incomplete and is qualified in its entirety by reference to the
full text of the Omnibus Agreement Amendment, which is attached as Exhibit 10.2 to this Current
Report on Form 8-K and incorporated in this Item 1.01 by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 19, 2008, pursuant to the terms and conditions of the Contribution Agreement, the
Partnership completed its previously announced acquisition of certain midstream assets from certain
affiliates of Anadarko (the “Acquisition”), consisting of (i) a 100% interest in the Hilight
System, (ii) a 50% interest in the Newcastle System, and (iii) a 14.81% limited liability company
membership interest in Fort Union Gas Gathering, L.L.C. for aggregate consideration of
$210,000,000, consisting of $175,000,000 in cash (the “Cash Consideration”), which the Partnership
financed through the Term Loan Agreement described in Item 1.01, and 2,556,891 common units of the
Partnership (the “Common Units”). The acquired assets provide a combination of gathering, treating
and processing services in the Powder River Basin of Wyoming. All of the parties to the
Contribution Agreement are affiliates of Anadarko.
Item 2.03 Creation of a Direct Financial Obligation.
The information set forth under Item 1.01 above with respect to the Term Loan Agreement is
incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
As part of the consideration for the Acquisition described in Item 2.01, the Partnership
issued 2,556,891 Common Units on December 19, 2008 to WGR Holdings. In addition, the Partnership
issued 52,181 general partner units (the “General Partner Units”) on December 19, 2008 to the
General Partner in order to allow the General Partner to maintain its 2% general partner interest
in the
Partnership after contribution by the General Partner of its 2% undivided interest in the
midstream assets discussed in Item 2.01 above. The Common Units and the General Partner Units were
issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On December 19, 2008, the General Partner’s Board of Directors approved an amended and
restated Western Gas Holdings, LLC Equity Incentive Plan. The amendments to the Plan are intended
to conform the Plan with the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”). The amended and restated Plan bifurcates the incentive unit awards
originally granted into unit appreciation rights and unit value rights, which have vesting events
similar to the prior incentive unit awards. The unit appreciation rights may be exercised at any
time after vesting and prior to the tenth anniversary of the grant date. The unit value rights
entitle the participant to a cash distribution with respect to the portion of the unit value rights
that has vested and is payable no later than March 15th of the year following the year
in which a right to payment with respect to the unit value right arises. The payment events related
to these awards were modified to comply with the short-term deferral exception under Section 409A.
The amended and restated Plan also modifies the distribution equivalent rights (“DERs”) to qualify
under the short-term deferral exception under Section 409A. In general, these changes do not
affect the scope or amount of benefits a participant is eligible to receive under the Plan.
The form of Award Agreement under the Plan was also amended (“Amended Award Agreement”) by the
Board of Directors of the General Partner on December 19, 2008 to reflect the requirements of
Section 409A and to conform to the amended and restated. Plan.
The foregoing description of the Plan Amendment is incomplete and is qualified in its entirety
by reference to the full and complete terms of the Plan Amendment, which is attached to this
Current Report on Form 8-K as Exhibit 10.3. A copy of the Amended Award Agreement is attached to
this Current Report on Form 8-K as Exhibit 10.4 and is incorporated into this Item 5.02 by
reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On December 19, 2008 and in connection with the consummation of the transactions contemplated
by the Contribution Agreement, the Partnership amended the First Amended and Restated Agreement of
Limited Partnership of the Partnership (the “Amendment”). The Amendment permits the Partnership to
make a special one-time cash distribution to WGR Holdings (without a corresponding distribution to
the General Partner or the limited partners of the Partnership) in an amount equal to the Cash
Consideration. A copy of the Amendment is attached to this Current Report on Form 8-K as Exhibit
3.1 and is incorporated into this Item 5.03 by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The company will file the financial statements required by this Item not later than 71 days
after the date on which this Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The company will file the financial statements required by this Item not later than 71 days
after the date on which this Form 8-K is required to be filed.
(d) Exhibits
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3.1 |
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Amendment No. 1 to First Amended and Restated Agreement of Limited Partnership of Western
Gas Partners, LP dated December 19, 2008. |
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10.1 |
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Term Loan Agreement due 2013 dated as of December 19, 2008 by and between Anadarko
Petroleum Corporation and Western Gas Partners, LP. |
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10.2 |
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Amendment No. 1 to Omnibus Agreement by and among Western Gas Partners, LP, Western Gas
Holdings, LLC, and Anadarko Petroleum Corporation, dated as of December 19, 2008. |
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10.3 |
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Amended and Restated Western Gas Holdings, LLC Equity Incentive Plan. |
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10.4 |
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Form of Amended and Restated Award Agreement under Western Gas Holdings, LLC Equity Incentive Plan. |
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99.1 |
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Western Gas Partners, LP Press Release, dated December 22, 2008. |