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<DIV>&nbsp;</DIV>
<DIV><BR>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>UNITED
STATES</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>SECURITIES
AND EXCHANGE COMMISSION</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>WASHINGTON,
D.C. 20549<BR></STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center>
<DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>
<DIV>
<DIV>
<HR align=center width="15%" color=#000000 noShade SIZE=1>
<BR></STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>FORM
8-K</STRONG></FONT></DIV></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>CURRENT
REPORT</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date of
Report (Date of earliest event reported):&nbsp; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>June
2, 2005</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>TETON
PETROLEUM COMPANY</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
Name of Registrant as Specified in Charter)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=middle width="23%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Delaware</STRONG></FONT></DIV></TD>
    <TD vAlign=top align=middle width="23%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>001-31679</STRONG></FONT></DIV></TD>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>84-1482290</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="23%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
      or Other Juris-</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">diction
      of Incorporation)</FONT></DIV></TD>
    <TD vAlign=top align=middle width="23%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">File
      Number)</FONT></DIV></TD>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(IRS
      Employer</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Identification
      No.)</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="23%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=middle width="23%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="47%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>1600
      Broadway, Suite 2400 </STRONG></FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Denver,
      CO 80202-4921</STRONG></FONT></DIV></TD>
    <TD vAlign=bottom align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>80202</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="47%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
      of Principal Executive Offices)</FONT></DIV></TD>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
      Code)</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant&#8217;s
telephone number, including area code</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>:&nbsp;
(303)&nbsp;542-1878</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>N/A</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
Name or Former Address, if Changed Since Last Report)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 (</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>see</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> General
Instruction A.2. below):</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</FONT></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</FONT></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))</FONT></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</FONT></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center>&nbsp;</DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
1.01.&nbsp; Entry into a Material Definitive Agreement</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On June
2, 2005, the Board of Directors of the Company declared a dividend distribution
of one Preferred Stock Purchase Right (each a &#8220;Right&#8221; and collectively the
&#8220;Rights&#8221;) for each outstanding share of Common Stock, $0.001 par value (&#8220;Common
Stock&#8221;), of the Company. The distribution will be paid as of June 14, 2005 (the
&#8220;Record Date&#8221;), to stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
the Company&#8217;s Series C Preferred Stock, $0.001 par value (the &#8220;Preferred
Stock&#8221;), at a price of $22.00 (the &#8220;Purchase Price&#8221;), subject to adjustment on
the occurrence of certain events. The description and terms of the Rights are
set forth in the Rights Agreement dated as of June 3, 2005 (the &#8220;Rights
Agreement&#8221;), between the Company and </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computershare
Investor Services, LLC., as </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rights
Agent.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Rights Agreement provides, among other things, the following:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Triggering
Event</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Rights are not exercisable </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">until the
earlier of:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 18pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the first
date of public announcement by the Company or by a person or group (&#8220;Acquiring
Person&#8221;) of such person&#8217;s acquisition of 15% or more of the outstanding Common
Stock without the prior approval of the Board of Directors (except as otherwise
provided in the Rights Agreement), or </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&nbsp;&nbsp;
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the tenth
business day (subject to extension by the Board) following the commencement of,
or public announcement of an intention to commence, a tender or exchange offer
which would result in the beneficial ownership of 15% or more of the outstanding
Common Stock </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(the
earlier of such dates being called the &#8220;Distribution Date&#8221;), </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Issuance
of Right Certificates; Expiration of Rights</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Until the
Distribution Date, the Rights will be evidenced by the certificates for the
Common Stock and will be transferable only in connection with a transfer of the
Common Stock. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (&#8220;Right Certificates&#8221;) will be mailed to
holders of record of the Company&#8217;s Common Stock as of the close of business on
the Distribution Date. The Right Certificates alone will evidence the Rights
from and after the Distribution Date. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Rights will expire upon the earlier of (i) June 2, 2008, unless otherwise
extended by the Company&#8217;s shareholders or (ii) redemption or exchange by the
Company. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Adjustments
to Prevent Dilution</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Purchase Price payable and the number of shares of Preferred Stock issuable upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock
of evidences of indebtedness or assets (excluding dividends payable in Preferred
Stock) or of subscription rights or warrants (other than those referred to
above). The number of Rights associated with each share of Common Stock is also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">2</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Rights
and Preferences of Series C Preferred Stock</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Preferred Stock purchasable upon exercise of the Rights will be nonredeemable
(except as provided below) and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such other series).
Each share of Preferred Stock will have a preferential cumulative quarterly
dividend in an amount equal to the greater of (a) $75.00 or (b) 100 times the
dividend declared on each share of Common Stock. In the event of liquidation,
the holders of Preferred Stock will receive a preferred liquidation payment
equal to the greater of (a)</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>&nbsp;</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,200.00
per share, plus accrued dividends to the date of distribution whether or not
earned or declared, plus a redemption premium of $1,200 per share of Preferred
Stock or (b) an amount per share equal to 100 times the aggregate payment to be
distributed per share of Common Stock. In the event of any merger, consolidation
or other transaction in which shares of Common Stock are exchanged for or
changed into other securities, cash and/or other property, each share of
Preferred Stock will be entitled to receive the greater of (a) 100 times the
amount and type of consideration received per share of Common Stock or (b)
$3,400.00 per share of Preferred Stock (the "Preferred Stock
Consideration").</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
share of Preferred Stock will entitle the holder to 100 votes on all matters
submitted to a vote of the shareholders. The holders of Preferred Stock will
generally vote together as one class with the holders of Common Stock. In the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged for or changed into other securities, cash and/or
other property, each share of Preferred Stock will be entitled to 100 times the
amount and type of consideration received per share of Common
Stock.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless an
Acquiring Person, within the time period specified (a) publicly announces its
withdrawal of its tender or exchange offer, or withdrawal of its intention to
commence such tender or exchange offer; and (b) divests a sufficient number of
shares of the outstanding Common Stock so that such Acquiring Person would no
longer own 15% or more of the outstanding Common Stock, the Company must redeem
the Preferred Stock within 364 days thereafter at a redemption price of
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>&nbsp;</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,200.00
per share, plus accrued dividends to the date of redemption, plus a redemption
premium of the greater of (1) $1,200 per share of Preferred Stock, or (2) an
amount per share equal to 100 times the aggregate payment to be distributed per
share of common stock; provided, however, that in the event the Acquiring
Person, prior to such 364</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>th</SUP></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> day
either (x) concludes a definitive agreement with the Board pursuant to a stock
or cash tender or exchange offer for all outstanding Common Stock at a price and
on terms approved by a majority of the outside Board members (who are continuing
Board members) or (y) (i) publicly announces its withdrawal of its tender or
exchange offer, or withdrawal of its intention to commence such tender or
exchange offer; and (ii) divests a sufficient number of shares of the
outstanding Common Stock so that such person would no longer own securities of
the Company representing 15% or more of the outstanding Common Stock, then the
Board has the option to retire any amount so outstanding and due for $.001 per
Preferred Share.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Right
to Buy Common Stock</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In the
event:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 2.5pt">&nbsp; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
person becomes an Acquiring Person or </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 2.5pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
Acquiring Person or any of its Affiliates or Associates, directly or indirectly:
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</FONT>&nbsp;&nbsp;&nbsp;&nbsp;
<FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">consolidates
with or merges into the Company or any of its subsidiaries or otherwise combines
with the Company or any of its subsidiaries in a transaction in which the
Company or such subsidiary is the continuing or surviving corporation of such
merger or combination and the Common Stock of the Company remains outstanding
and no shares thereof shall be changed into or exchanged for stock or other
securities of any other person or of the Company or cash or any other property,
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt"
align=left><FONT size=2></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt"
align=left><FONT size=2></FONT>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">3</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">transfers
any assets to the Company or any of its subsidiaries in exchange for capital
stock of the Company or any of its subsidiaries or for securities exercisable
for or convertible into capital stock of the Company or any of its subsidiaries
or otherwise obtains from the Company or any of its subsidiaries any capital
stock of the Company or any of its subsidiaries or securities exercisable for or
convertible into capital stock of the Company or any of its subsidiaries (other
than as part of a pro rata offer or distribution to all holders of such stock),
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">sells,
purchases, leases, exchanges, mortgages, pledges, transfers or otherwise
disposes to, from or with the Company or any of its subsidiaries, assets on
terms and conditions less favorable to the Company or such subsidiary than the
Company or such subsidiary would be able to obtain in arm&#8217;s-length negotiation
with an unaffiliated third party, </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">receives
any compensation from the Company or any of its subsidiaries for services other
than compensation for employment or fees for serving as a director at rates in
accordance with the Company&#8217;s (or its subsidiary&#8217;s) past practice, </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">receives
the benefit (except proportionately as a stockholder) of any loans, advances,
guarantees, pledges or other financial assistance or tax credit or advantage,
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">engages
in any transaction with the Company (or any of its subsidiaries) involving the
sale, license, transfer or grant of any right in, or disclosure of, any patents,
copyrights, trade secrets, trademarks or know-how or other intellectual property
rights which the Company (including its subsidiaries) owns or has the right to
use on terms and conditions not approved by the Board of Directors of the
Company, or </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 0pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">while
there is an Acquiring Person, there shall occur any reclassification of
securities, any recapitalization of the Company, or any merger or consolidation
of the Company with any of its subsidiaries or any other transaction or
transactions involving the Company or any of its subsidiaries which have the
effect of increasing by more than 1% the proportionate share of the outstanding
shares of any class of equity securities of the Company or any of its
subsidiaries owned or controlled by the Acquiring Person (such events are
collectively referred to herein as the &#8220;Flip-In Events&#8221;), </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">then, and
in each such case, each holder of a Right, other than the Acquiring Person, will
have the right to receive, upon payment of the then current Purchase Price, in
lieu of one one-hundredth of a share of Preferred Stock per outstanding Right,
that number of shares of Common Stock having a market value at the time of the
transaction equal to the Purchase Price (as adjusted to the Purchase Price in
effect immediately prior to the Flip-In Event multiplied by the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such Flip-In Event) divided by one-half the average of the
daily closing prices per share of the Common Stock for the thirty consecutive
trading days (&#8220;Current Market Price&#8221;) on the date of such Flip-In Event.
Notwithstanding the foregoing, Rights held by the Acquiring Person or certain
related persons or certain transferees will be null and void and no longer be
transferable. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company may at its option substitute for a share of Common Stock issuable upon
the exercise of Rights such number or fractions of shares of Preferred Stock
having an aggregate current market value equal to the Current Market Price of a
share of Common Stock. If there are insufficient shares of Common Stock to
permit the exercise in full of the Rights in accordance with the foregoing
paragraph, the Board of Directors shall, to the extent permitted by applicable
law and any material agreements then in effect to which the Company is a
party:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 0pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">determine
the excess (such excess, the &#8220;Spread&#8221;) of </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the value
of the shares of Common Stock issuable upon the exercise of a Right in
accordance with this paragraph (the &#8220;Current Value&#8221;) over </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">4</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
Purchase Price, and </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 0pt">&nbsp; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">with
respect to each Right, make adequate provision to substitute for the shares of
Common Stock issuable in accordance with this paragraph upon exercise of the
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Right and
payment of the Purchase Price. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Right
to Buy Acquiring Company Stock</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
the Rights are earlier redeemed, if following the first occurrence of a Flip-In
Event, (a) the Company were to be acquired in a merger or other business
combination in which any shares of the Company&#8217;s Common Stock are exchanged or
converted for other securities or assets (other than a merger or other business
combination in which the voting power represented by the Company&#8217;s securities
outstanding immediately prior thereto continues to represent all of the voting
power represented by the securities of the Company thereafter and the holders of
such securities have not changed as a result of such transaction), or (b) 50% or
more of the assets or earning power of the Company and its subsidiaries (taken
as a whole) were to be sold or transferred in one or a series of related
transactions (such transactions are collectively referred to herein as the
&#8220;Flip-Over Events&#8221;), proper provision must be made so that each holder of a
Right (other than an Acquiring Person, or related persons) will from and after
such date have the right to receive, upon payment of the then current Purchase
Price, that number of shares of common stock of the acquiring company having a
market value at the time of such transaction equal to the Purchase Price divided
by one-half the Current Market Price of such common stock. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Redemption</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At any
time until the occurrence of a Flip-In Event, the Board may redeem the Rights in
whole, but not in part, at a price of $0.001 per Right. Immediately upon the
action of the Board of Directors of the Company authorizing redemption of the
Rights, the right to exercise the Rights will terminate, and the only right of
the holders of Rights will be to receive the Redemption Price without any
interest thereon. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Exchange
Provision</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At any
time after the occurrence of a Flip-In Event and prior to the earlier of a
Flip-Over Event or such time as any person (other than certain exempt persons),
together with certain related persons, owns more than 50% of the outstanding
Common Stock, the Board of Directors may, at its option, exchange all or any
portion of the outstanding Rights for shares of Common Stock at an exchange
ratio of one share of Common Stock or one one-hundredth of a share of preferred
stock per Right.</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Amendment
of Rights Agreement</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Until the
Rights become nonredeemable the Company may, except with respect to the
redemption price of the Rights, amend the Rights Agreement in any manner. After
the Rights become nonredeemable, the Company may amend the Rights Agreement to
cure any ambiguity, to correct or supplement any provision which may be
defective or inconsistent with any other provisions, to shorten or lengthen any
time period under the Rights Agreement, or to arrange or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable, provided that no such amendment may adversely affect the interests of
the holders of the Rights (other than the Acquiring Person or related persons)
or cause the Rights to again be redeemable or the Agreement to again be freely
amendable. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">5</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Tax
Consequences</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
issuance of the Rights is not taxable to the Company or to stockholders under
presently existing federal income tax law, and will not change the way in which
stockholders can presently trade the Company&#8217;s shares of Common Stock. If the
Rights should become exercisable, stockholders, depending on then existing
circumstances, may recognize taxable income. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Rights are intended to protect the stockholders of the Company in the event of
an unfair or coercive offer to acquire the Company and to provide the Board with
adequate time to evaluate unsolicited offers.&nbsp; The Rights may have
anti-takeover effects.&nbsp; The Rights will cause substantial dilution or
substantial increased costs to a person or group that attempts to acquire the
Company without, among other things, making an offer at a fair price.&nbsp; The
Rights, however, should not affect any prospective offeror willing to make an
offer at a fair price and otherwise in the best interests of the Company and its
stockholders, as determined by a majority of the Board.&nbsp; The Rights should
not interfere with any merger or other business combination approved by the
Board.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A copy of
the Rights Agreement is available free of charge from the Company.&nbsp; This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
attached as Exhibit 4.1 and incorporated herein by reference.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
3.03.&nbsp; Material Modification to Rights of Security
Holders</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
description under &#8220;Item 1.01 Entry into a Material Definitive
Agreement.&#8221;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
5.03.&nbsp; Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
June 8, 2005, the Company filed a Certificate of Designations of Series C
Preferred Stock with the Secretary of State of the State of Delaware. The
Company&#8217;s Board of Directors authorized the filing of this certificate at the
June 2, 2005, board meeting pursuant to the reservation and designation of
200,000 shares of the Company&#8217;s preferred stock as Series C Preferred Stock in
connection with the Rights Agreement dated as of June 3, 2005, between the
Company and Computershare Investor Services, LLC., as Rights Agent. See the
description set out under &#8220;Item 1.01 Entry into a Material Definitive Agreement&#8221;
for a description of the rights and preferences of the Series C Preferred Stock.
The description of the Certificate of Designations of Series C Preferred Stock
is qualified in its entirety by reference to the Certificate of Designations of
Series C Preferred Stock, a copy of which is attached as Exhibit 3.1 to this
Current Report on Form 8-K and incorporated herein by reference.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
8.01.&nbsp; Other Events</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On June
3, 2005, the Company issued a press release announcing the declaration of the
dividend of Rights. The description of the press release set forth under this
&#8220;Item 8.01. Other Events&#8221; is qualified in its entirety by reference to the press
release, a copy of which is attached to this Current Report on Form 8-K as
Exhibit 99.1 and incorporated herein by reference.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
9.01.&nbsp; Financial Statements and Exhibits</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=left width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</FONT></DIV></TD>
    <TD vAlign=top align=left width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
      3.1</FONT></DIV></TD>
    <TD vAlign=top align=left width="50%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
      of Designation of Series C Preferred Stock.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="50%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
      4.1</FONT></DIV></TD>
    <TD vAlign=top align=left width="50%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rights
      Agreement, dated as of June 3, 2005, between Teton Petroleum Company and
      Computershare Investor Services, LLC., which includes as Exhibit A the
      form of Certificate of Designation of Series C Preferred Stock, as Exhibit
      B the form of Rights Certificate and as Exhibit C the Summary of Rights to
      Purchase Preferred Stock.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="50%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
      99.1</FONT></DIV></TD>
    <TD vAlign=top align=left width="50%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      Release, dated June 3, 2005.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">6</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SIGNATURE</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=left width="43%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="28%" colSpan=4>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TETON
      PETROLEUM COMPANY</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="43%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="28%" colSpan=4>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="43%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
      June 8, 2005</FONT></DIV></TD>
    <TD vAlign=top align=left width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=top align=left
    width="24%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
      Karl F. Arleth</FONT></DIV></TD>
    <TD vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="43%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;Name:</FONT></DIV></TD>
    <TD vAlign=top align=left width="21%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Karl
      F. Arleth</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="43%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;Title:</FONT></DIV></TD>
    <TD vAlign=top align=left width="21%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">President
      and</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Executive Officer</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=center align=left width="43%">&nbsp;</TD>
    <TD vAlign=center align=left width="3%">&nbsp;</TD>
    <TD vAlign=center align=left width="5%">&nbsp;</TD>
    <TD vAlign=center align=left width="19%">&nbsp;</TD>
    <TD vAlign=center align=left width="1%">&nbsp;</TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">7</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBIT
INDEX</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=top align=left
width="7%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Exhibit
      No.</STRONG></FONT></DIV></TD>
    <TD vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"><STRONG></STRONG></FONT>&nbsp;</DIV></TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=top align=middle
    width="64%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Description</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="7%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="64%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="7%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</FONT></DIV></TD>
    <TD vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="64%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
      of Designation of Series C Preferred Stock.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="7%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="64%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="7%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</FONT></DIV></TD>
    <TD vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="64%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rights
      Agreement, dated as of June 3, 2005, between Teton Petroleum Company and
      Computershare Investor Services, LLC., which includes as Exhibit A the
      form of Certificate of Designation of Series C Preferred Stock, as Exhibit
      B the form of Rights Certificate and as Exhibit C the Summary of Rights to
      Purchase Preferred Stock.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="7%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="64%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="7%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</FONT></DIV></TD>
    <TD vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif"></FONT>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="64%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      Release, dated June 3, 2005.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">8</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><BR></DIV>
<DIV></DIV></BODY></HTML>
{"company-data": {"conformed-name": "TETON PETROLEUM CO", "cik": "0001131072", "assigned-sic": "1381", "irs-number": "841482290", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-31679", "film-number": "05885403"}, "business-address": {"street1": "PO BOX 774327", "city": "STEAMBOAT SPRINGS", "state": "CO", "zip": "80477", "phone": "9708701417"}}
Unassociated Document
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):
June
2, 2005
TETON
PETROLEUM COMPANY
(Exact
Name of Registrant as Specified in Charter)
Delaware
001-31679
84-1482290
(State
      or Other Juris-
diction
      of Incorporation)
(Commission
File
      Number)
(IRS
      Employer
Identification
      No.)
1600
      Broadway, Suite 2400
Denver,
      CO 80202-4921
80202
(Address
      of Principal Executive Offices)
(Zip
      Code)
Registrant's
telephone number, including area code
: 
(303) 542-1878
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (
see
General
Instruction A.2. below):
o
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
o
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
o
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
o
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
Item
1.01.  Entry into a Material Definitive Agreement
On June
2, 2005, the Board of Directors of the Company declared a dividend distribution
of one Preferred Stock Purchase Right (each a "Right" and collectively the
"Rights") for each outstanding share of Common Stock, $0.001 par value ("Common
Stock"), of the Company. The distribution will be paid as of June 14, 2005 (the
"Record Date"), to stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
the Company's Series C Preferred Stock, $0.001 par value (the "Preferred
Stock"), at a price of $22.00 (the "Purchase Price"), subject to adjustment on
the occurrence of certain events. The description and terms of the Rights are
set forth in the Rights Agreement dated as of June 3, 2005 (the "Rights
Agreement"), between the Company and
Computershare
Investor Services, LLC., as
Rights
Agent.
The
Rights Agreement provides, among other things, the following:
Triggering
Event
.
The
Rights are not exercisable
until the
earlier of:
(1)
the first
date of public announcement by the Company or by a person or group ("Acquiring
Person") of such person's acquisition of 15% or more of the outstanding Common
Stock without the prior approval of the Board of Directors (except as otherwise
provided in the Rights Agreement), or
(2)
the tenth
business day (subject to extension by the Board) following the commencement of,
or public announcement of an intention to commence, a tender or exchange offer
which would result in the beneficial ownership of 15% or more of the outstanding
Common Stock
(the
earlier of such dates being called the "Distribution Date"),
Issuance
of Right Certificates; Expiration of Rights
.
Until the
Distribution Date, the Rights will be evidenced by the certificates for the
Common Stock and will be transferable only in connection with a transfer of the
Common Stock. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Company's Common Stock as of the close of business on
the Distribution Date. The Right Certificates alone will evidence the Rights
from and after the Distribution Date.
The
Rights will expire upon the earlier of (i) June 2, 2008, unless otherwise
extended by the Company's shareholders or (ii) redemption or exchange by the
Company.
Adjustments
to Prevent Dilution
.
The
Purchase Price payable and the number of shares of Preferred Stock issuable upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock
of evidences of indebtedness or assets (excluding dividends payable in Preferred
Stock) or of subscription rights or warrants (other than those referred to
above). The number of Rights associated with each share of Common Stock is also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
2
Rights
and Preferences of Series C Preferred Stock
.
The
Preferred Stock purchasable upon exercise of the Rights will be nonredeemable
(except as provided below) and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such other series).
Each share of Preferred Stock will have a preferential cumulative quarterly
dividend in an amount equal to the greater of (a) $75.00 or (b) 100 times the
dividend declared on each share of Common Stock. In the event of liquidation,
the holders of Preferred Stock will receive a preferred liquidation payment
equal to the greater of (a)
$2,200.00
per share, plus accrued dividends to the date of distribution whether or not
earned or declared, plus a redemption premium of $1,200 per share of Preferred
Stock or (b) an amount per share equal to 100 times the aggregate payment to be
distributed per share of Common Stock. In the event of any merger, consolidation
or other transaction in which shares of Common Stock are exchanged for or
changed into other securities, cash and/or other property, each share of
Preferred Stock will be entitled to receive the greater of (a) 100 times the
amount and type of consideration received per share of Common Stock or (b)
$3,400.00 per share of Preferred Stock (the "Preferred Stock
Consideration").
Each
share of Preferred Stock will entitle the holder to 100 votes on all matters
submitted to a vote of the shareholders. The holders of Preferred Stock will
generally vote together as one class with the holders of Common Stock. In the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged for or changed into other securities, cash and/or
other property, each share of Preferred Stock will be entitled to 100 times the
amount and type of consideration received per share of Common
Stock.
Unless an
Acquiring Person, within the time period specified (a) publicly announces its
withdrawal of its tender or exchange offer, or withdrawal of its intention to
commence such tender or exchange offer; and (b) divests a sufficient number of
shares of the outstanding Common Stock so that such Acquiring Person would no
longer own 15% or more of the outstanding Common Stock, the Company must redeem
the Preferred Stock within 364 days thereafter at a redemption price of
$2,200.00
per share, plus accrued dividends to the date of redemption, plus a redemption
premium of the greater of (1) $1,200 per share of Preferred Stock, or (2) an
amount per share equal to 100 times the aggregate payment to be distributed per
share of common stock; provided, however, that in the event the Acquiring
Person, prior to such 364
th
day
either (x) concludes a definitive agreement with the Board pursuant to a stock
or cash tender or exchange offer for all outstanding Common Stock at a price and
on terms approved by a majority of the outside Board members (who are continuing
Board members) or (y) (i) publicly announces its withdrawal of its tender or
exchange offer, or withdrawal of its intention to commence such tender or
exchange offer; and (ii) divests a sufficient number of shares of the
outstanding Common Stock so that such person would no longer own securities of
the Company representing 15% or more of the outstanding Common Stock, then the
Board has the option to retire any amount so outstanding and due for $.001 per
Preferred Share.
Right
to Buy Common Stock
.
In the
event:
(i)
any
person becomes an Acquiring Person or
(ii)
any
Acquiring Person or any of its Affiliates or Associates, directly or indirectly:
(1)
consolidates
with or merges into the Company or any of its subsidiaries or otherwise combines
with the Company or any of its subsidiaries in a transaction in which the
Company or such subsidiary is the continuing or surviving corporation of such
merger or combination and the Common Stock of the Company remains outstanding
and no shares thereof shall be changed into or exchanged for stock or other
securities of any other person or of the Company or cash or any other property,
3
(2)
transfers
any assets to the Company or any of its subsidiaries in exchange for capital
stock of the Company or any of its subsidiaries or for securities exercisable
for or convertible into capital stock of the Company or any of its subsidiaries
or otherwise obtains from the Company or any of its subsidiaries any capital
stock of the Company or any of its subsidiaries or securities exercisable for or
convertible into capital stock of the Company or any of its subsidiaries (other
than as part of a pro rata offer or distribution to all holders of such stock),
(3)
sells,
purchases, leases, exchanges, mortgages, pledges, transfers or otherwise
disposes to, from or with the Company or any of its subsidiaries, assets on
terms and conditions less favorable to the Company or such subsidiary than the
Company or such subsidiary would be able to obtain in arm's-length negotiation
with an unaffiliated third party,
(4)
receives
any compensation from the Company or any of its subsidiaries for services other
than compensation for employment or fees for serving as a director at rates in
accordance with the Company's (or its subsidiary's) past practice,
(5)
receives
the benefit (except proportionately as a stockholder) of any loans, advances,
guarantees, pledges or other financial assistance or tax credit or advantage,
or
(6)
engages
in any transaction with the Company (or any of its subsidiaries) involving the
sale, license, transfer or grant of any right in, or disclosure of, any patents,
copyrights, trade secrets, trademarks or know-how or other intellectual property
rights which the Company (including its subsidiaries) owns or has the right to
use on terms and conditions not approved by the Board of Directors of the
Company, or
(iii)
while
there is an Acquiring Person, there shall occur any reclassification of
securities, any recapitalization of the Company, or any merger or consolidation
of the Company with any of its subsidiaries or any other transaction or
transactions involving the Company or any of its subsidiaries which have the
effect of increasing by more than 1% the proportionate share of the outstanding
shares of any class of equity securities of the Company or any of its
subsidiaries owned or controlled by the Acquiring Person (such events are
collectively referred to herein as the "Flip-In Events"),
then, and
in each such case, each holder of a Right, other than the Acquiring Person, will
have the right to receive, upon payment of the then current Purchase Price, in
lieu of one one-hundredth of a share of Preferred Stock per outstanding Right,
that number of shares of Common Stock having a market value at the time of the
transaction equal to the Purchase Price (as adjusted to the Purchase Price in
effect immediately prior to the Flip-In Event multiplied by the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such Flip-In Event) divided by one-half the average of the
daily closing prices per share of the Common Stock for the thirty consecutive
trading days ("Current Market Price") on the date of such Flip-In Event.
Notwithstanding the foregoing, Rights held by the Acquiring Person or certain
related persons or certain transferees will be null and void and no longer be
transferable.
The
Company may at its option substitute for a share of Common Stock issuable upon
the exercise of Rights such number or fractions of shares of Preferred Stock
having an aggregate current market value equal to the Current Market Price of a
share of Common Stock. If there are insufficient shares of Common Stock to
permit the exercise in full of the Rights in accordance with the foregoing
paragraph, the Board of Directors shall, to the extent permitted by applicable
law and any material agreements then in effect to which the Company is a
party:
(A)
determine
the excess (such excess, the "Spread") of
(1)
the value
of the shares of Common Stock issuable upon the exercise of a Right in
accordance with this paragraph (the "Current Value") over
4
(2)
the
Purchase Price, and
(B)
with
respect to each Right, make adequate provision to substitute for the shares of
Common Stock issuable in accordance with this paragraph upon exercise of the
Right and
payment of the Purchase Price.
Right
to Buy Acquiring Company Stock
.
Unless
the Rights are earlier redeemed, if following the first occurrence of a Flip-In
Event, (a) the Company were to be acquired in a merger or other business
combination in which any shares of the Company's Common Stock are exchanged or
converted for other securities or assets (other than a merger or other business
combination in which the voting power represented by the Company's securities
outstanding immediately prior thereto continues to represent all of the voting
power represented by the securities of the Company thereafter and the holders of
such securities have not changed as a result of such transaction), or (b) 50% or
more of the assets or earning power of the Company and its subsidiaries (taken
as a whole) were to be sold or transferred in one or a series of related
transactions (such transactions are collectively referred to herein as the
"Flip-Over Events"), proper provision must be made so that each holder of a
Right (other than an Acquiring Person, or related persons) will from and after
such date have the right to receive, upon payment of the then current Purchase
Price, that number of shares of common stock of the acquiring company having a
market value at the time of such transaction equal to the Purchase Price divided
by one-half the Current Market Price of such common stock.
Redemption
.
At any
time until the occurrence of a Flip-In Event, the Board may redeem the Rights in
whole, but not in part, at a price of $0.001 per Right. Immediately upon the
action of the Board of Directors of the Company authorizing redemption of the
Rights, the right to exercise the Rights will terminate, and the only right of
the holders of Rights will be to receive the Redemption Price without any
interest thereon.
Exchange
Provision
.
At any
time after the occurrence of a Flip-In Event and prior to the earlier of a
Flip-Over Event or such time as any person (other than certain exempt persons),
together with certain related persons, owns more than 50% of the outstanding
Common Stock, the Board of Directors may, at its option, exchange all or any
portion of the outstanding Rights for shares of Common Stock at an exchange
ratio of one share of Common Stock or one one-hundredth of a share of preferred
stock per Right.
Amendment
of Rights Agreement
.
Until the
Rights become nonredeemable the Company may, except with respect to the
redemption price of the Rights, amend the Rights Agreement in any manner. After
the Rights become nonredeemable, the Company may amend the Rights Agreement to
cure any ambiguity, to correct or supplement any provision which may be
defective or inconsistent with any other provisions, to shorten or lengthen any
time period under the Rights Agreement, or to arrange or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable, provided that no such amendment may adversely affect the interests of
the holders of the Rights (other than the Acquiring Person or related persons)
or cause the Rights to again be redeemable or the Agreement to again be freely
amendable.
5
Tax
Consequences
.
The
issuance of the Rights is not taxable to the Company or to stockholders under
presently existing federal income tax law, and will not change the way in which
stockholders can presently trade the Company's shares of Common Stock. If the
Rights should become exercisable, stockholders, depending on then existing
circumstances, may recognize taxable income.
The
Rights are intended to protect the stockholders of the Company in the event of
an unfair or coercive offer to acquire the Company and to provide the Board with
adequate time to evaluate unsolicited offers.  The Rights may have
anti-takeover effects.  The Rights will cause substantial dilution or
substantial increased costs to a person or group that attempts to acquire the
Company without, among other things, making an offer at a fair price.  The
Rights, however, should not affect any prospective offeror willing to make an
offer at a fair price and otherwise in the best interests of the Company and its
stockholders, as determined by a majority of the Board.  The Rights should
not interfere with any merger or other business combination approved by the
Board.
A copy of
the Rights Agreement is available free of charge from the Company.  This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
attached as Exhibit 4.1 and incorporated herein by reference.
Item
3.03.  Material Modification to Rights of Security
Holders
See
description under "Item 1.01 Entry into a Material Definitive
Agreement."
Item
5.03.  Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
Effective
June 8, 2005, the Company filed a Certificate of Designations of Series C
Preferred Stock with the Secretary of State of the State of Delaware. The
Company's Board of Directors authorized the filing of this certificate at the
June 2, 2005, board meeting pursuant to the reservation and designation of
200,000 shares of the Company's preferred stock as Series C Preferred Stock in
connection with the Rights Agreement dated as of June 3, 2005, between the
Company and Computershare Investor Services, LLC., as Rights Agent. See the
description set out under "Item 1.01 Entry into a Material Definitive Agreement"
for a description of the rights and preferences of the Series C Preferred Stock.
The description of the Certificate of Designations of Series C Preferred Stock
is qualified in its entirety by reference to the Certificate of Designations of
Series C Preferred Stock, a copy of which is attached as Exhibit 3.1 to this
Current Report on Form 8-K and incorporated herein by reference.
Item
8.01.  Other Events
On June
3, 2005, the Company issued a press release announcing the declaration of the
dividend of Rights. The description of the press release set forth under this
"Item 8.01. Other Events" is qualified in its entirety by reference to the press
release, a copy of which is attached to this Current Report on Form 8-K as
Exhibit 99.1 and incorporated herein by reference.
Item
9.01.  Financial Statements and Exhibits
(c)
Exhibit
      3.1
Certificate
      of Designation of Series C Preferred Stock.
Exhibit
      4.1
Rights
      Agreement, dated as of June 3, 2005, between Teton Petroleum Company and
      Computershare Investor Services, LLC., which includes as Exhibit A the
      form of Certificate of Designation of Series C Preferred Stock, as Exhibit
      B the form of Rights Certificate and as Exhibit C the Summary of Rights to
      Purchase Preferred Stock.
Exhibit
      99.1
Press
      Release, dated June 3, 2005.
6
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
TETON
      PETROLEUM COMPANY
Date:
      June 8, 2005
By:
/s/
      Karl F. Arleth
Name:
Karl
      F. Arleth
Title:
President
      and
Chief
      Executive Officer
7
EXHIBIT
INDEX
Exhibit
      No.
Description
3.1
Certificate
      of Designation of Series C Preferred Stock.
4.1
Rights
      Agreement, dated as of June 3, 2005, between Teton Petroleum Company and
      Computershare Investor Services, LLC., which includes as Exhibit A the
      form of Certificate of Designation of Series C Preferred Stock, as Exhibit
      B the form of Rights Certificate and as Exhibit C the Summary of Rights to
      Purchase Preferred Stock.
99.1
Press
      Release, dated June 3, 2005.
8