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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 20, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE HOUSTON EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-2674487
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
JAMES F. WESTMORELAND
CORPORATE SECRETARY
1100 LOUISIANA, SUITE 2000 1100 LOUISIANA, SUITE 2000
HOUSTON, TEXAS 77002-5219 HOUSTON, TEXAS 77002-5219
(713) 830-6800 (713) 830-6800
(Address, including zip code, and telephone number, including (Name, address, including zip code, and telephone number,
area code, of registrant's principal executive offices) including area code, of agent for service)
</TABLE>
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Copies to:
WILLIAM N. FINNEGAN, IV
ANDREWS & KURTH L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
(713) 220-4200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement, as
determined in light of market conditions and other factors.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED MAXIMUM
TITLE OF EACH CLASS AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED PRICE(1)(2)(3) REGISTRATION FEE
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<S> <C> <C>
Common Stock, par value $0.01 per share . . . . . . . . . . . . . . . . . . .
Preferred Stock, par value $0.01 per share . . . . . . . . . . . . . . . . .
Depositary Shares(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt Securities (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Total(6) $250,000,000 $69,500.00
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</TABLE>
(1) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with the issuance by the
registrant of the securities registered hereunder.
(2) This registration statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion or
exercise of, as the case may be, the Debt Securities, Preferred Stock or
Depositary Shares registered hereunder. Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
(4) Such indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the event
that the registrant elects to offer to the public fractional interests in
shares of Preferred Stock registered hereunder, Depositary Receipts will
be distributed to those persons purchasing the fractional interests and
the shares of Preferred Stock will be issued to the Depositary under the
Deposit Agreement.
(5) If any Debt Securities are issued at an original issue discount, then the
offering price of the Debt Securities shall be in such amount as shall
result in an aggregate initial offering price not to exceed $250,000,000,
less the offering price of any securities previously issued hereunder.
(6) In no event will the aggregate offering price of all securities issued
from time to time pursuant to this registration statement exceed
$250,000,000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
Subject to Completion, Dated May 20, 1999
PROSPECTUS
$250,000,000
THE HOUSTON EXPLORATION COMPANY
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
The Houston Exploration Company may offer and sell in one or more
offerings:
o shares of common stock;
o shares of preferred stock, in one or more series, which may be
convertible into or exchangeable for common stock or debt
securities and which may be issued in the form of depositary
shares evidenced by depositary receipts; and
o unsecured debt securities consisting of senior notes and
debentures and subordinated notes and debentures and other
unsecured evidences of indebtedness in one or more series.
The aggregate initial offering price of the securities that we will
offer will not exceed $250,000,000. We will offer the securities in amounts, at
prices and on terms to be determined by market conditions at the time of our
offerings.
We will provide the specific terms of the securities in supplements to
this prospectus. You should read this prospectus and the prospectus
supplements carefully before you invest in any of our securities. This
prospectus may not be used to consummate sales of our securities unless it is
accompanied by a prospectus supplement.
We may sell these securities to agents, underwriters or dealers, or we
may sell them directly to other purchasers. See "Plan of Distribution." The
prospectus supplement will list any agents or underwriters and the compensation
they will receive. The prospectus supplement will also show you the total
amount of money that we will receive from selling the securities being offered,
after we pay a part of the expenses of the offering.
Our common stock is listed for trading on the New York Stock Exchange
under the symbol "THX".
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This prospectus may not be used to consummate sales of the securities
unless accompanied by a prospectus supplement.
May , 1999
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YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT
AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION INCORPORATED BY
REFERENCE OR PROVIDED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . . . . . . . 1
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 2
THE HOUSTON EXPLORATION COMPANY . . . . . . . . . . . . . . . . . . . . . . . 3
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RATIO OF EARNINGS TO FIXED CHARGES . . . . . . . . . . . . . . . . . . . . . 4
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DESCRIPTION OF DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 6
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . 12
LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed
with the Securities and Exchange Commission utilizing a "shelf" registration
process. Under this shelf registration process, we may sell different types of
securities described in this prospectus in one or more offerings up to a total
offering amount of $250 million. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering and the securities offered by us in that
offering. The prospectus supplement may also add, update or change information
in this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"Where You Can Find More Information."
In this prospectus references to "Houston Exploration," "we," "us" and
"our" mean The Houston Exploration Company.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information
with the SEC. Our SEC filings are available to the public over the Internet or
at the SEC's web site at http://www.sec.gov. You may also read and copy any
document we file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information on the operation of its public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and may supersede information in this
prospectus and information previously filed with the SEC. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 until we sell all of the securities:
o our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
o our Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999; and
o the description of our common stock contained in our
registration statement filed under Section 12 of the
Securities Exchange Act of 1934.
You may request a copy of these filings, at no cost, over the Internet
at our website at http://www.houstonexploration.com or by writing or calling us
at the following address:
Shareholder Relations
The Houston Exploration Company
1100 Louisiana, Suite 2000
Houston, Texas 77002-5219
(713) 830-6886
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FORWARD-LOOKING STATEMENTS
Some of the information included in this prospectus, any prospectus
supplement and the documents we have incorporated by reference contain
forward-looking statements. These statements use forward-looking words such as
"anticipate," "believe," "expect," "may," "project," "will," or other similar
words and discuss "forward-looking" information, including the following:
o anticipated capital expenditures;
o future cash flows and borrowings;
o pursuit of potential future acquisition opportunities; and
o sources of funding for exploration and development.
These forward-looking statements are based on assumptions that we
believe are reasonable, but they are open to a wide range of uncertainties and
business risks, including the following:
o the volatility of natural gas and oil prices,
o uncertainty of reserve information and future net reserve
estimates;
o reserve replacement risks;
o drilling risks;
o operating risks of natural gas and oil operations;
o acquisition risks;
o substantial capital requirements;
o governmental regulation;
o environmental matters; and
o competition.
Other factors that could cause actual results to differ materially
form those anticipated are discussed in our periodic filings with the SEC,
including our Annual Report on Form 10-K for the year ended December 31, 1998.
When considering these forward-looking statements, you should keep in
mind the risk factors and other cautionary statements in this document, any
prospectus supplement and the documents we have incorporated by reference. We
will not update these forward-looking statements unless the securities laws
require us to do so.
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THE HOUSTON EXPLORATION COMPANY
The Houston Exploration Company is an independent natural gas and oil
company engaged in the exploration, development, exploitation and acquisition
of domestic natural gas and oil properties. Our operations are currently
focused offshore in the Gulf of Mexico and onshore in South Texas, South
Louisiana, the Arkoma Basin, East Texas and West Virginia. Our strategy is to
utilize our geological and geophysical expertise to grow our reserve base
through a combination of exploratory drilling in the Gulf of Mexico, lower
risk, exploitation and development drilling onshore and opportunistic
acquisitions. At December 31, 1998, we had net proved reserves of 480 Bcfe,
98% of which were natural gas and 80% of which were classified as proved
developed.
Our net proved reserves increased at a compound annual rate of 33%
during the past five years from 121 Bcfe, or billion cubic feet of gas
equivalent, at December 31, 1993 to 480 Bcfe at December 31, 1998. Annual
production increased at a compound annual rate of 22% from 23 Bcfe in 1994 to
63 Bcfe in 1998. Natural gas and oil revenues increased from $42 million in
1994 to $127 million in 1998. Our daily production for the month of April 1999
averaged approximately 190 MMcfe/d, or million cubic feet of gas equivalent per
day.
We believe that our primary strengths are:
o a substantial inventory of high potential exploration,
exploitation and development opportunities;
o expertise in generating new prospects;
o geographic focus; and
o low-cost operating structure.
The geographic focus of our operations in the Gulf of Mexico and core
onshore areas enables us to manage a large asset base with a relatively small
number of employees and to add and operate production at relatively low
incremental costs. For the year ended December 31, 1998, we achieved lease
operating expenses excluding severance taxes of $0.26 per Mcfe, or thousand
cubic feet of gas equivalent, of production and net general and administrative
expenses of $0.10 per Mcfe of production.
At December 31, 1998, we incurred a net loss of $72.7 million due to a
$130 million non-cash charge, $84.5 million after taxes, as the result of a
writedown in the carrying value of our natural gas and oil properties primarily
as a result of weak natural gas prices. In 1998, our production was 62,829
MMcfe and natural gas and oil revenues were $127.1 million. We realized an
average gas price of $2.02 per Mcf for 1998 as compared to the average realized
gas price in 1997 of $2.25 per Mcf.
The Brooklyn Union Gas Company organized The Houston Exploration
Company in December 1985 to conduct its offshore natural gas and oil
exploration drilling and development operations in the Gulf of Mexico. In
February 1996, Brooklyn Union transferred its onshore producing properties to
Houston Exploration. We completed our initial public offering in September
1996. MarketSpan Corporation (doing business as KeySpan Energy), the parent of
Brooklyn Union, owns approximately 64% of our outstanding common stock.
Our principal executive offices are located at 1100 Louisiana, Suite
2000, Houston, Texas 77002 and our telephone number is (713) 830-6800.
USE OF PROCEEDS
Unless we specify otherwise in the accompanying prospectus
supplement, we intend to use the net proceeds we receive from the sale of the
securities offered by this prospectus and the accompanying prospectus
supplement for
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the repayment of debt and for general corporate purposes. General corporate
purposes may include the repayment of existing indebtedness, additions to
working capital, capital expenditures or the financing of possible
acquisitions, including acquisitions of onshore and offshore oil and natural
gas properties.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------- ----- -------- ------------- ----- ---
1994 1995 1996 1997 1998 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to fixed charges . . . . . . . . . . . 2.2x (1) 2.2x 5.0x (2) 3.1x 0.7x
</TABLE>
_________________
(1) Due to the $12 million nonrecurring non-cash charge incurred in the
year ended December 31, 1995 in connection with Brooklyn Union's
February 1996 reorganization of its exploration and production assets,
earnings were insufficient to cover fixed charges by $7 million. If
the $12 million non-cash charge is excluded the ratio of earnings
fixed charges would have been 1.9 x.
(2) Due to the $130 million non-cash charge incurred in the year ended
December 31, 1998 caused by a writedown in the carrying value of
natural gas and oil properties, earnings were insufficient to cover
fixed charges by $123 million. If the $130 million non-cash charge is
excluded, the ratio of earnings to fixed charges would have been 1.5x.
For the purpose of computing the ratio of earnings to fixed charges,
earnings are defined as:
o income from continuing operations before income taxes;
o plus fixed charges; and
o less capitalized interest.
Fixed charges are defined as the sum of the following:
o interest (including capitalized interest) on all indebtedness;
o amortization of debt issuance cost; and
o that portion of rental expense which we believe to be
representative of an interest factor.
PLAN OF DISTRIBUTION
We may sell our securities through agents, underwriters or dealers or
directly to purchasers.
We may designate agents to solicit offers to purchase our securities.
o We will name any agent involved in offering or selling our
securities and any commissions that we will pay to the agent
in the prospectus supplement.
o Unless we indicate otherwise in the prospectus supplement, our
agents will act on a best efforts basis for the period of
their appointment.
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o Our agents may be deemed to be underwriters under the
Securities Act of 1933 of any of our securities that they
offer or sell.
We may use an underwriter or underwriters in the offer or sale of our
securities.
o If we use an underwriter or underwriters, we will execute an
underwriting agreement with the underwriter or underwriters at
the time that we reach an agreement for the sale of our
securities.
o We will include the names of the specific managing underwriter
or underwriters, as well as any other underwriters, and the
terms of the transactions, including the compensation the
underwriters and dealers will receive, in the prospectus
supplement.
o The underwriters will use the prospectus supplement to sell
our securities.
We may use a dealer to sell our securities.
o If we use a dealer, we, as principal, will sell our securities
to the dealer.
o The dealer will then sell our securities to the public at
varying prices that the dealer will determine at the time it
sells our securities.
o We will include the name of the dealer and the terms of our
transactions with the dealer in the prospectus supplement.
We may directly solicit offers to purchase our securities, and we may
directly sell our securities to institutional or other investors. We will
describe the terms of our direct sales in the prospectus supplement.
We may indemnify agents, underwriters, and dealers against certain
liabilities, including liabilities under the Securities Act of 1933. Our
agents, underwriters, and dealers, or their affiliates, may be customers of,
engage in transactions with or perform services for us, in the ordinary course
of business.
We may authorize our agents and underwriters to solicit offers by
certain institutions to purchase our securities at the public offering price
under delayed delivery contracts.
o If we use delayed delivery contracts, we will disclose that we
are using them in the prospectus supplement and will tell you
when we will demand payment and delivery of the securities
under the delayed delivery contracts.
o These delayed delivery contracts will be subject only to the
conditions that we set forth in the prospectus supplement.
o We will indicate in the prospectus supplement, the commission
that underwriters and agents soliciting purchases of our
securities under delayed delivery contracts will be entitled
to receive.
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DESCRIPTION OF DEBT SECURITIES
Any debt securities we offer will be our direct, unsecured general
obligations. The debt securities will be either senior debt securities or
subordinated debt securities. The debt securities will be issued under one or
more separate indentures between us and a trustee that is qualified to act
under the Trust Indenture Act of 1939. The trustee for each series of debt
securities will be identified in the applicable prospectus supplement. Senior
debt securities will be issued under a "senior indenture" and subordinated debt
securities will be issued under a "subordinated indenture." Together the senior
indenture and the subordinated indenture are called "indentures."
The following description is a summary of the material provisions of
the indentures. It does not restate those agreements in their entirety. The
form of indentures and any supplemental indentures will be filed by us from
time to time by means of an exhibit to a Current Report on Form 8-K and will be
available for inspection at the corporate trust office of the trustee, or as
described above under "Where You Can Find More Information." The indentures
will be subject to, and governed by, the Trust Indenture Act. We will execute
an indenture and supplemental indenture if and when we issue any debt
securities. We urge you to read the indentures and any supplemental indenture
because they, and not this description, define your rights as a holder of the
debt securities.
GENERAL
The debt securities will be our direct, unsecured obligations. The
senior debt securities will rank equally with all of our other senior and
unsubordinated debt. The subordinated debt securities will have a junior
position to all of our senior debt.
A prospectus supplement and a supplemental indenture relating to any
series of debt securities being offered will include specific terms relating to
the offering. These terms will include some or all of the following:
o the title and type of the debt securities;
o the currency or currency unit in which the debt securities
will be payable;
o the total principal amount of the debt securities;
o the percentage of the principal amount at which the debt
securities will be issued and any payments due if the maturity
of the debt securities is accelerated;
o the dates on which the principal of the debt securities will
be payable;
o the interest rate that the debt securities will bear and the
interest payment dates for the debt securities;
o any conversion or exchange provisions;
o any optional redemption provisions;
o any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem some or all of the debt
securities;
o any provisions granting special rights to holders when a
specified event occurs;
o any changes to or additional Events of Defaults or covenants;
o any special tax implications of the debt securities, including
provisions for original issue discount securities, if offered;
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o any restriction on the declaration of dividends or
restrictions requiring the maintenance of any asset ratio or
the creation or maintenance of reserves; and
o any other terms of the debt securities.
None of the indentures will limit the amount of debt securities that
may be issued by us. Each indenture will allow debt securities to be issued up
to the principal amount that may be authorized by us and may be in any currency
or currency unit designated by us.
Debt securities of a series may be issued in registered, bearer,
coupon or global form.
DENOMINATIONS
Unless the prospectus supplement for each issuance of debt securities
states otherwise, the securities will be issued in registered form of $1,000
each or multiples thereof.
SUBORDINATION
Under the subordinated indenture, payment of the principal, interest
and any premium on the subordinated debt securities will generally be
subordinated and junior in right of payment to the prior payment in full of all
senior debt. The subordinated indenture will provide that no payment of
principal, interest and any premium on the subordinated debt securities may be
made in the event:
o of any insolvency, bankruptcy or similar proceeding involving
us or our property, or
o we fail to pay the principal, interest, any premium or any
other amounts on any senior debt when due.
The subordinated indenture will not limit the amount of senior debt
that we may incur.
"Senior Debt" will be defined in the subordinated indenture to include
all notes or other unsecured evidences of indebtedness, including guarantees
given by us, for money borrowed by us, not expressed to be subordinate or
junior in right of payment to any of our other indebtedness.
CONSOLIDATION, MERGER OR SALE
Each indenture will generally permit a consolidation or merger between
us and another corporation. They will also permit the sale by us of all or
substantially all of our property and assets. If this happens, the remaining or
acquiring corporation will assume all of our responsibilities and liabilities
under the indentures, including the payment of all amounts due on the debt
securities and performance of the covenants in the indentures. However, we will
consolidate or merge with or into any other corporation or sell all or
substantially all of our assets only according to the terms and conditions of
the indentures. The remaining or acquiring corporation will be substituted for
us in the indentures with the same effect as if it had been an original party
to the indentures. Thereafter, the successor corporation may exercise our
rights and powers under any indenture, in our name or in its own name. Any act
or proceeding required or permitted to be done by our board of directors or any
of our officers may be done by the board or officers of the successor
corporation. If we sell all or substantially all of our assets, we shall be
released from all our liabilities and obligations under any indenture and under
the debt securities.
MODIFICATION OF INDENTURES
Under each indenture our rights and obligations and the rights of the
holders may be modified with the consent of the holders of a majority in
aggregate principal amount of the outstanding debt securities of each series
affected by the modification. No modification of the principal or interest
payment terms, and no modification reducing the percentage required for
modifications, will be effective against any holder without its consent.
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EVENTS OF DEFAULT
"Event of Default" when used in an indenture, will mean any of the
following:
o failure to pay the principal of or any premium on any debt
security when due;
o failure to deposit any sinking fund payment when due;
o failure to pay interest on any debt security for 30 days;
o failure to perform any other covenant in the indenture that
continues for 90 days after being given written notice;
o certain events in bankruptcy, insolvency or reorganization of
Houston Exploration; or
o any other event of default included in any indenture or
supplemental indenture.
An event of default for a particular series of debt securities will
not necessarily constitute an event of default for any other series of debt
securities issued under an indenture. The trustee may withhold notice to the
holders of debt securities of any default, except in the payment of principal
or interest, if it considers such withholding of notice to be in the best
interests of the holders.
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% in aggregate principal
amount of the debt securities of the series may declare the entire principal of
all the debt securities of that series to be due and payable immediately. If
this happens, subject to certain conditions, the holders of a majority of the
aggregate principal amount of the debt securities of that series can void the
declaration.
Other than its duties in case of a default, a trustee is not obligated
to exercise any of its rights or powers under any indenture at the request,
order or direction of any holders, unless the holders offer the trustee
reasonable indemnity. If they provide this reasonable indemnification, the
holders of a majority in principal amount of any series of debt securities may
direct the time, method and place of conducting any proceeding or any remedy
available to the trustee, or exercising any power conferred upon the trustee,
for any series of debt securities.
COVENANTS
Under the indentures, we will:
o pay the principal of, and interest and any premium on, the
debt securities when due;
o maintain a place of payment;
o deliver a report to the trustee at the end of each fiscal year
reviewing our obligations under the indentures; and
o deposit sufficient funds with any paying agent on or before
the due date for any principal, interest or premium.
PAYMENT AND TRANSFER
We will pay principal, interest and any premium on fully registered
debt securities at designated places. We will make payment by check mailed to
the persons in whose names the debt securities are registered on days specified
in the indentures or any prospectus supplement. If we make debt securities
payments in other forms, we will pay those payments at a place designated by us
and specified in a prospectus supplement.
You may transfer or exchange fully registered debt securities at the
corporate trust office of the trustee or at any other office or agency
maintained by us for such purposes, without the payment of any service charge
except for any tax or governmental charge.
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GLOBAL SECURITIES
We may issue one or more series of the debt securities as permanent
global debt securities deposited with a depositary. Unless otherwise indicated
in the prospectus supplement, the following is a summary of the depository
arrangements applicable to debt securities issued in permanent global form and
for which The Depositary Trust Company (DTC) acts as depositary.
Each global debt security will be deposited with, or on behalf of,
DTC, as depositary, or its nominee and registered in the name of a nominee of
DTC. Except under the limited circumstances described below, global debt
securities are not exchangeable for definitive certificated debt securities.
Ownership of beneficial interests in a global debt security is limited
to institutions that have accounts with DTC or its nominee, or persons that may
hold interests through those participants. In addition, ownership of beneficial
interests by participants in a global debt security will be evidenced only by,
and the transfer of that ownership interest will be effected only through,
records maintained by DTC or its nominee for a global debt security. Ownership
of beneficial interests in a global debt security by persons that hold through
participants will be evidenced only by, and the transfer of that ownership
interest within that participant will be effected only through, records
maintained by that participant. DTC has no knowledge of the actual beneficial
owners of the debt securities. Beneficial owners will not receive written
confirmation from DTC of their purchase, but beneficial owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the participants through which the
beneficial owners entered the transaction. The laws of some jurisdictions
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability to transfer
beneficial interests in a global debt security.
We will make payment of principal of, and interest on, debt securities
represented by a global debt security registered in the name of or held by DTC
or its nominee to DTC or its nominee, as the case may be, as the registered
owner and holder of the global debt security representing those debt
securities. DTC has advised us that upon receipt of any payment of principal
of, or interest on, a global debt security, DTC will immediately credit
accounts of participants on its book-entry registration and transfer system
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of that global debt security as shown in the records of
DTC. Payments by participants to owners of beneficial interests in a global
debt security held through those participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name,"
and will be the sole responsibility of those participants, subject to any
statutory or regulatory requirements that may be in effect from time to time.
Neither we, any trustee nor any of our respective agents will be
responsible for any aspect of the records of DTC, any nominee or any
participant relating to, or payments made on account of, beneficial interests
in a permanent global debt security or for maintaining, supervising or
reviewing any of the records of DTC, any nominee or any participant relating to
such beneficial interests.
A global debt security is exchangeable for definitive debt securities
registered in the name of, and a transfer of a global debt security may be
registered to, any person other than DTC or its nominee, only if:
o DTC notifies us that it is unwilling or unable to continue as
depositary for that global debt security or at any time DTC
ceases to be registered under the Securities Exchange Act of
1934;
o we determine in our discretion that the global debt security
shall be exchangeable for definitive debt securities in
registered form; or
o there shall have occurred and be continuing an event of
default or an event which, with notice or the lapse of time or
both, would constitute an event of default under the debt
securities.
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Any global debt security that is exchangeable pursuant to the
preceding sentence will be exchangeable in whole for definitive debt securities
in registered form, of like tenor and of an equal aggregate principal amount as
the global debt security, in denominations specified in the applicable
prospectus supplement, if other than $1,000 and integral multiples of $1,000.
The definitive debt securities will be registered by the registrar in the name
or names instructed by DTC. We expect that these instructions may be based upon
directions received by DTC from its participants with respect to ownership of
beneficial interests in the global debt security.
Except as provided above, owners of the beneficial interests in a
global debt security will not be entitled to receive physical delivery of debt
securities in definitive form and will not be considered the holders of debt
securities for any purpose under the indentures. No global debt security shall
be exchangeable except for another global debt security of like denomination
and tenor to be registered in the name of DTC or its nominee. Accordingly, each
person owning a beneficial interest in a global debt security must rely on the
procedures of DTC and, if that person is not a participant, on the procedures
of the participant through which that person owns its interest, to exercise any
rights of a holder under the global debt security or the indentures.
We understand that, under existing industry practices, in the event
that we request any action of holders, or an owner of a beneficial interest in
a global debt security desires to give or take any action that a holder is
entitled to give or take under the debt securities or the indentures, DTC would
authorize the participants holding the relevant beneficial interests to give or
take that action. Additionally, those participants would authorize beneficial
owners owning through those participants to give or take that action or would
otherwise act upon the instructions of beneficial owners owning through them.
DTC has advised us that DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered under the Securities
Exchange Act of 1934. DTC was created to hold securities of its participants
and to facilitate the clearance and settlement of securities transactions among
its participants in those securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to DTC's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. The rules applicable to DTC and its
participants are on file with the SEC.
DISCHARGING OUR OBLIGATIONS
We will be discharged from our obligations on the debt securities of
any series at any time if we deposit with the trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the debt
securities of the series. If this happens, the holders of the debt securities
of the series will not be entitled to the benefits of the indenture except for
registration of transfer and exchange of debt securities and replacement of
lost, stolen or mutilated debt securities.
Under Federal income tax law as of the date of this prospectus, a
discharge may be treated as an exchange of the related debt securities. Each
holder might be required to recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the debt securities and the
value of the holder's interest in the trust. Holders might be required to
include as income a different amount than would be includable without the
discharge. Prospective investors are urged to consult their own tax advisers as
to the consequences of a discharge, including the applicability and effect of
tax laws other than the Federal income tax law.
MEETINGS
Each indenture will contain provisions describing how meetings of the
holders of debt securities of a series may be convened. A meeting may be called
at any time by the trustee, and also, upon request, by us or the holders of at
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least 10% in principal amount of the outstanding debt securities of a series. A
notice of the meeting must always be given in the manner described under
"--Notices" below. Generally speaking, except for any consent that must be
given by all holders of a series as described under "--Modification of
Indentures" above, any resolution presented at a meeting of the holders of a
series of debt securities may be adopted by the affirmative vote of the holders
of a majority in principal amount of the outstanding debt securities of that
series, unless the indenture allows the action to be voted upon to be taken
with the approval of the holders of a different specific percentage of
principal amount of outstanding debt securities of a series. In that case, the
holders of outstanding debt securities of at least the specified percentage
must vote in favor of the action. Any resolution passed or decision taken at
any meeting of holders of debt securities of any series in accordance with the
applicable indenture will be binding on all holders of debt securities of that
series, unless, as discussed in "--Modification of Indentures" above, the
action is only effective against holders that have approved it. The quorum at
any meeting called to adopt a resolution, and at any reconvened meeting, will
be holders holding or representing a majority in principal amount of the
outstanding debt securities of a series.
GOVERNING LAW
Each indenture and the debt securities will be governed by and
construed in accordance with the laws of the State of New York.
NOTICES
Notices to holders of debt securities will be given by mail to the
addresses of such holders as they appear in the security register.
THE TRUSTEE
RESIGNATION OR REMOVAL OF TRUSTEE
If the trustee serves as such under both the senior indenture and the
subordinated indenture, the provisions of the indentures and the Trust
Indenture Act governing trustee conflicts of interest will require the trustee
to resign as trustee under either the subordinated indenture or the senior
indenture upon the occurrence of any uncured event of default with respect to
any series of senior debt securities. Also, any uncured event of default with
respect to any series of subordinated debt securities will force the trustee to
resign as trustee under either the senior indenture or the subordinated
indenture. Any resignation will require the appointment of a successor trustee
under the applicable indenture in accordance with the terms and conditions of
such indenture.
The trustee may resign or be removed by us with respect to one or more
series of debt securities and a successor trustee may be appointed to act with
respect to any such series. The holders of a majority in aggregate principal
amount of the debt securities of any series may remove the trustee with respect
to the debt securities of such series.
LIMITATIONS ON TRUSTEE IF IT IS ONE OF OUR CREDITORS
Each indenture will contain certain limitations on the right of the
trustee thereunder, in the event that it becomes one of our creditors, to
obtain payment of claims in certain cases, or to realize on certain property
received in respect of any such claim as security or otherwise.
ANNUAL TRUSTEE REPORT TO HOLDERS OF DEBT SECURITIES
The trustee will be required to submit an annual report to the holders
of the debt securities regarding, among other things, the trustee's eligibility
to serve as such, the priority of the trustee's claims regarding certain
advances made by it, and any action taken by the trustee materially affecting
the debt securities.
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CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE
Each indenture will provide that, in addition to other certificates or
opinions that may be specifically required by other provisions of an Indenture,
every application by us for action by the trustee will be accompanied by a
certificate of certain of our officers and an opinion of counsel (who may be
our counsel) stating that, in the opinion of the signers, all conditions
precedent to such action have been complied with by us.
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of the date of this prospectus, we are authorized to issue up to
55,000,000 shares of stock, including up to 50,000,000 shares of common stock
and up to 5,000,000 shares of preferred stock. As of March 31, 1999, we had
23,895,240 shares of common stock and no shares of preferred stock outstanding.
As of that date, we also had approximately 2,082,738 shares of common stock
reserved for issuance upon exercise of options or in connection with other
awards outstanding under various employee or director incentive, compensation
and option plans.
The following is a summary of the key terms and provisions of our
equity securities. You should refer to the applicable provisions of our
restated certificate of incorporation, restated bylaws, the Delaware General
Corporation law and the documents we have incorporated by reference for a
complete statement of the terms and rights of our capital stock.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
We are a Delaware corporation and are subject to Section 203 of the
Delaware General Corporation Law (DGCL). Generally, Section 203 prohibits a
publicly-held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless
(1) prior to such date, either the business combination or such transaction
which resulted in the stockholder becoming an interested stockholder is
approved by the board of directors of the corporation, (2) upon consummation of
the transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owns at least 85% of the outstanding
voting stock, or (3) on or after such date, the business combination is
approved by the board of directors of the corporation and by the affirmative
vote of at least 66 2/3% of the outstanding voting stock that is not owned by
the interested stockholder. A "business combination" includes mergers, asset
sales and other transactions resulting in a financial benefit to the interested
stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns, or, within three years, did own, 15% or more
of the corporation's outstanding voting stock. Our restated certificate of
incorporation provides that Section 203 of the DGCL will not apply to restrict
a business combination between us and an interested stockholder if (1) such
business combination was approved by our board of directors prior to the time
that such stockholder became an interested stockholder or (2) such stockholder
became an interested stockholder as a result of, and at or prior to the
effective time of, a transaction which was approved by our board of directors
prior to the time such stockholder became an interested stockholder.
LIMITATION ON CHANGES IN CONTROL
Certain of the provisions of our restated certificate of incorporation
and restated bylaws and the provisions of Section 203 of the DGCL could have
the effect of delaying, deferring or preventing a change in control or the
removal of our existing management or deterring potential acquirors from making
an offer to our stockholders. This could be the case notwithstanding that a
majority of our stockholders might benefit from such a change in control or
offer. In addition, the issuance of shares of preferred stock, or the issuance
of rights to purchase shares of preferred stock, could be used to discourage an
unsolicited acquisition proposal. For instance, the issuance of a series of
preferred stock might impede a business combination by including voting rights
that would require the approval of a percentage of the preferred stockholders.
In addition, under certain circumstances, the issuance of preferred stock could
adversely affect the voting power of the holders of common stock.
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PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND RESTATED BYLAWS
Our restated certificate of incorporation provides that stockholders
may not act by written consent in lieu of a meeting. The restated certificate
of incorporation further provides that the number of directors will not be
fewer than 3 nor more than 15. An amendment to the restated certificate of
incorporation relating to the composition of the board of directors, an
amendment of our bylaws and limitations on the liability of directors, requires
the vote of at least 66 2/3% of the stockholders entitled to vote in an
election of directors, voting together as a single class. An amendment to the
bylaws by our stockholders requires the affirmative vote of at least 66 2/3% of
the stockholders entitled to vote in an election of directors, voting together
as a single class.
COMMON STOCK
VOTING RIGHTS. Each holder of common stock is entitled to one vote per
share. Subject to the rights, if any, of the holders of any series of preferred
sock pursuant to applicable law or the provision of the certificate of
designations creating that series, all voting rights are vested in the holders
of shares of common stock. Holders of shares of common stock have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of directors can elect 100% of the directors, and the
holders of the remaining shares voting for the election of directors will not
be able to elect any directors.
DIVIDENDS. Dividends may be paid to the holders of common stock when,
as and if declared by the board of directors out of funds legally available for
their payment, subject to the rights of holders of any preferred stock.
RIGHTS UPON LIQUIDATION. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock will be
entitled to share equally, in proportion to the number of shares of common
stock held by them, in any of our assets available for distribution after the
payment in full of all debts and distributions and after the holders of all
series of outstanding preferred stock, if any, have received their liquidation
preferences in full.
MISCELLANEOUS. The issued and outstanding shares of common stock are
fully paid and nonassessable. Holders of shares of common stock are not
entitled to preemptive rights. Shares of common stock are not redeemable or
convertible into shares of any other class of capital stock. The Bank of New
York is the transfer agent and registrar for the common stock.
PREFERRED STOCK AND DEPOSITARY SHARES
We may issue shares of our preferred stock in one or more series. We
will determine the dividend, voting, conversion and other rights of the series
being offered and the terms and conditions relating to its offering and sale at
the time of the offer and sale. We may also issue fractional shares of
preferred stock that will be represented by depositary shares and depositary
receipts.
DESCRIPTION OF PREFERRED STOCK.
The restated certificate of incorporation authorizes the board of
directors or a committee of the board of directors to cause preferred stock to
be issued in one or more series, without stockholder action. The board of
directors is authorized to issue up to 5,000,000 shares of preferred stock and
can determine the number of shares of each series, and the rights, preferences
and limitations of each series. We may amend the certificate of incorporation
to increase the number of authorized shares of preferred stock in a manner
permitted by the restated certificate of incorporation and the DGCL. As of the
date of this prospectus, we have no shares of preferred stock outstanding.
The particular terms of any series of preferred stock being offered by
us under this prospectus will be described in the prospectus supplement
relating to that series of preferred stock. Those terms may include:
o the number of shares of the series of preferred stock being
offered;
o the title and liquidation preference per share of that series
of the preferred stock;
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o the purchase price of the preferred stock;
o the dividend rate or method for determining the dividend rate;
o the dates on which dividends will be paid;
o whether dividends on that series of preferred stock will be
cumulative or non-cumulative and, if cumulative, the dates
from which dividends will commence to accumulate;
o any redemption or sinking fund provisions applicable to that
series of preferred stock;
o any conversion provisions applicable to that series of
preferred stock;
o whether we have elected to offer depositary shares with
respect to that series of preferred stock; or
o any additional dividend, liquidation, redemption, sinking fund
and other rights and restrictions applicable to that series of
preferred stock.
If the terms of any series of preferred stock being offered differ
from the terms set forth below, those terms will also be disclosed in the
prospectus supplement relating to that series of preferred stock. You should
refer to the certificate of designations relating to the series of the
preferred stock for the complete terms of that preferred stock. The certificate
of designations for any series of preferred stock will be filed with the SEC
promptly after the offering of that series of preferred stock.
The preferred stock will, when issued, be fully paid and
nonassessable. Unless otherwise specified in the prospectus supplement, in the
event we liquidate, dissolve or wind-up our business, each series of preferred
stock will have the same rank as to dividends and distributions as each other
series of the preferred stock we may issue in the future. Holders of preferred
stock will have no preemptive rights to subscribe for or purchase shares of
capital stock.
DIVIDEND RIGHTS. Holders of preferred stock of each series will be
entitled to receive, when, as and if declared by the board of directors, cash
dividends at the rates and on the dates set forth in the applicable prospectus
supplement. Dividend rates may be fixed or variable or both. Different series
of preferred stock may be entitled to dividends at different dividend rates or
based upon different methods of determination. Each dividend will be payable to
the holders of record as they appear on our stock books, or, if applicable, the
records of the depositary referred to below under "Depositary Shares" on record
dates determined by the board of directors. Dividends on any series of the
preferred stock may be cumulative or non-cumulative, as specified in the
applicable prospectus supplement. If the board of directors fails to declare a
dividend on any series of preferred stock for which dividends are
non-cumulative, then the right to receive that dividend will be lost, and we
will have no obligation to pay the dividend for that dividend period, whether
or not dividends are declared for any future dividend period.
We will not pay or declare full dividends on any series of preferred
stock, unless we have or are contemporaneously declaring and paying full
dividends for the dividend period commencing after the immediately preceding
dividend payment date (and cumulative dividends still owing, if any) on all
other series of preferred stock which have the same rank as, or rank senior to,
that series of preferred stock. When those dividends are not paid in full,
dividends will be declared pro rata, so that the amount of dividends declared
per share on that series of preferred stock and on each other series of
preferred stock having the same rank as, or ranking senior to, that series of
preferred stock will in all cases bear to each other the same ratio that
accrued dividends per share on that series of preferred stock and the other
preferred stock bear to each other. In addition, generally, unless full
dividends, including cumulative dividends still owing, if any, on all
outstanding shares of any series of preferred stock have been paid, no
dividends will be declared or paid on the common stock and generally we may not
redeem or purchase any common stock. No interest, or sum of money in lieu of
interest, will be paid in connection with any dividend payment or payments
which may be in arrears.
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The amount of dividends payable for each dividend period will be
computed by annualizing the applicable dividend rate and dividing by the number
of dividend periods in a year, except that the amount of dividends payable for
the initial dividend period or any period shorter than a full dividend period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months and, for any period less than a full month, the actual number of days
elapsed in the period.
RIGHTS UPON LIQUIDATION. In the event we liquidate, dissolve or
wind-up our affairs, either voluntarily or involuntarily, the holders of each
series of preferred stock will be entitled to receive liquidating distributions
in the amount set forth in the applicable prospectus supplement relating to
each series of preferred stock, plus an amount equal to accrued and unpaid
dividends, if any, before any distribution of assets is made to the holders of
common stock. If the amounts payable with respect to preferred stock of any
series and any stock having the same rank as that series of preferred stock are
not paid in full, the holders of preferred stock and of such other stock will
share ratably in any such distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After the holders
of each series of preferred stock and any stock having the same rank as the
preferred stock are paid in full, they will have no right or claim to any of
our remaining assets. Neither the sale of all or substantially all our property
or business nor a merger or consolidation by us with any other corporation will
be considered a dissolution, liquidation or winding up by us of our business or
affairs.
REDEMPTION. Any series of preferred stock may be redeemable, in whole
or in part, at our option. In addition, any series of preferred stock may be
subject to mandatory redemption pursuant to a sinking fund. The redemption
provisions that may apply to a series of preferred stock, including the
redemption dates and the redemption prices for that series, will be set forth
in the applicable prospectus supplement.
If a series of preferred stock is subject to mandatory redemption, the
applicable prospectus supplement will specify the year we can begin to redeem
shares of the preferred stock, the number of shares of the preferred stock we
can redeem each year, and the redemption price per share. We may pay the
redemption price in cash, stock or in cash that we have received specifically
from the sale of our capital stock, as specified in the prospectus supplement.
If the redemption price is to be paid only from the proceeds of the sale of our
capital stock, the terms of the series of preferred stock may also provide
that, if no such capital stock is sold or if the amount of cash received is
insufficient to pay in full the redemption price then due, the series of
preferred stock will automatically be converted into shares of the applicable
capital stock pursuant to conversion provisions specified in the prospectus
supplement.
If fewer than all the outstanding shares of any series of preferred
stock are to be redeemed, whether by mandatory or optional redemption, the
board of directors will determine the method for selecting the shares to be
redeemed, which may be by lot or pro rata or by any other method determined to
be equitable. From and after the redemption date, dividends will cease to
accrue on the shares of preferred stock called for redemption and all rights of
the holders of those shares (except the right to receive the redemption price)
will cease.
In the event that full dividends, including accrued but unpaid
dividends, if any, have not been paid on any series of preferred stock, we may
not redeem that series in part and we may not purchase or acquire any shares of
that series of preferred stock, except by an offer made on the same terms to
all holders of that series of preferred stock.
CONVERSION RIGHTS. The applicable prospectus supplement will state the
terms, if any, on which shares of a series of preferred stock are convertible
into shares of common stock or another series of our preferred stock. As
described under "--Redemption" above, under certain circumstances, preferred
stock may be mandatorily converted into common stock or another series of our
preferred stock.
VOTING RIGHTS. Except as indicated below or in the applicable
prospectus supplement, or except as expressly required by applicable law, the
holders of preferred stock will not be entitled to vote. Except as indicated in
the applicable prospectus supplement, in the event we issue full shares of any
series of preferred stock, each share will be entitled to one vote on matters
on which holders of that series of preferred stock are entitled to vote.
However, as more fully described below under "--Description of Depositary
Shares," if we issue depositary shares representing a fraction of a share of a
series of preferred stock, each depositary share will, in effect, be entitled
to that fraction of a vote, rather than a full vote. Because each full share of
any series of preferred stock will be entitled to one vote, the
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voting power of that series will depend on the number of shares in that series,
and not on the aggregate liquidation preference or initial offering price of
the shares of that series of preferred stock.
TRANSFER AGENT AND REGISTRAR. The Bank of New York will be the
transfer agent, registrar and dividend disbursement agent for the preferred
stock and any depositary shares (see the description of depositary shares
below). The registrar for the preferred stock will send notices to the holders
of the preferred stock of any meetings at which such holders will have the
right to elect directors or to vote on any other matter.
DESCRIPTION OF DEPOSITARY SHARES.
GENERAL. We may, at our option, elect to offer fractional shares of
preferred stock, rather than full shares of preferred stock. If we do, we will
issue to the public receipts for depositary shares, and each of these
depositary shares will represent a fraction (to be set forth in the applicable
prospectus supplement) of a share of a particular series of preferred stock.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a deposit agreement between us and a bank or
trust company selected by us (the depositary). Subject to the terms of the
deposit agreement, each owner of a depositary share will be entitled, in
proportion to the applicable fractional interest in shares of preferred stock
underlying that depositary share, to all the rights and preferences of the
preferred stock underlying that depositary share. Those rights include
dividend, voting, redemption, conversion and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be issued to those
persons who purchase the fractional interests in the preferred stock underlying
the depositary shares, in accordance with the terms of the offering. Copies of
the forms of deposit agreement and depositary receipt are filed as exhibits to
the registration statement. The following description is a summary of the
material provisions of the deposit agreement, the depositary shares and the
depositary receipts. It does not restate those agreements in their entirety.
You should refer to the forms of the deposit agreement and depositary receipts
that are filed as exhibits to the registration statement.
DIVIDENDS AND OTHER DISTRIBUTIONS. The depositary will distribute all
cash dividends or other cash distributions received in respect of the preferred
stock to the record holders of depositary shares relating to that preferred
stock in proportion to the number of depositary shares owned by those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the
depositary may, with our approval, sell the property and distribute the net
proceeds from the sale to the applicable holders.
REDEMPTION OF DEPOSITARY SHARES. If a series of preferred stock
underlying the depositary shares is subject to redemption, the depositary
shares will be redeemed from the proceeds received by the depositary resulting
from the redemption, in whole or in part, of that series of preferred stock
held by the depositary. The redemption price per depositary share will be equal
to the applicable fraction of the redemption price per share payable with
respect to that series of the preferred stock. Whenever we redeem shares of
preferred stock that are held by the depositary, the depositary will redeem, as
of the same redemption date, the number of depositary shares representing the
shares of preferred stock so redeemed. If fewer than all the depositary shares
are to be redeemed, the depositary shares to be redeemed will be selected by
lot or pro rata as determined by the depositary.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be outstanding, and all rights of the holders of
those depositary shares will cease, except the right to receive any money,
securities, or other property upon surrender to the depositary of the
depositary receipts evidencing those depositary shares.
VOTING THE PREFERRED STOCK. Upon receipt of notice of any meeting at
which the holders of preferred stock are entitled to vote, the depositary will
mail the information contained in the notice of meeting to the record holders
of the depositary shares underlying that preferred stock. Each record holder of
those depositary shares on the record date
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(which will be the same date as the record date for the preferred stock) will
be entitled to instruct the depositary as to the exercise of the voting rights
pertaining to the amount of the preferred stock underlying that holder's
depositary shares. The depositary will try, as far as practicable, to vote the
number of shares of preferred stock underlying those depositary shares in
accordance with such instructions, and we will agree to take all action that
may be deemed necessary by the depositary in order to enable the depositary to
do so. The depositary will not vote the shares of preferred stock to the extent
it does not receive specific instructions from the holders of depositary
shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT. The form of
depositary receipt evidencing the depositary shares and any provision of the
deposit agreement may be amended at any time by agreement between us and the
depositary. However, any amendment that materially and adversely alters the
rights of the holders of depositary shares will not be effective unless the
amendment has been approved by the holders of at least a majority of the
depositary shares then outstanding. The deposit agreement may be terminated by
us or by the depositary only if (1) all outstanding depositary shares have been
redeemed or (2) there has been a final distribution of the underlying preferred
stock in connection with our liquidation, dissolution or winding up and the
preferred stock has been distributed to the holders of depositary receipts.
RESIGNATION AND REMOVAL OF DEPOSITARY. The depositary may resign at
any time by delivering a notice to us of its election to do so. We may remove
the depositary at any time. Any such resignation or removal will take effect
upon the appointment of a successor depositary and its acceptance of its
appointment. The successor depositary must be appointed within 60 days after
delivery of the notice of resignation or removal.
MISCELLANEOUS. The depositary will forward to holders of depositary
receipts all reports and communications from us that we deliver to the
depositary and that we are required to furnish to the holders of the preferred
stock.
Neither we nor the depositary will be liable if either of us is
prevented or delayed by law or any circumstance beyond our control in
performing our respective obligations under the deposit agreement. Our
obligations and those of the depositary will be limited to the performance in
good faith of our respective duties under the deposit agreement. Neither we
nor the depositary will be obligated to prosecute or defend any legal
proceeding in respect of any depositary shares or preferred stock unless
satisfactory indemnity is furnished. We and the depositary may rely upon
written advice of counsel or accountants, or upon information provided by
persons presenting preferred stock for deposit, holders of depositary receipts
or other persons believed to be competent and on documents believed to be
genuine.
DESCRIPTION OF PERMANENT GLOBAL PREFERRED SECURITIES.
Certain series of the preferred stock or depositary shares may be
issued as permanent global securities to be deposited with a depositary with
respect to that series. Unless otherwise indicated in the prospectus
supplement, the following is a summary of the depositary arrangements
applicable to preferred stock or depositary receipts issued in permanent global
form and for which DTC acts as the depositary (global preferred securities).
Each global preferred security will be deposited with, or on behalf
of, DTC or its nominee and registered in the name of a nominee of DTC. Except
under the limited circumstances described below, global preferred securities
are not exchangeable for definitive certificated preferred stock or depositary
receipts.
Ownership of beneficial interests in a global preferred security is
limited to institutions that have accounts with DTC or its nominee
(participants) or persons that may hold interests through participants. In
addition, ownership of beneficial interests by participants in a global
preferred security will be evidenced only by, and the transfer of that
ownership interest will be effected only through, records maintained by DTC or
its nominee for a global preferred security. Ownership of beneficial interests
in a global preferred security by persons that hold through participants will
be evidenced only by, and the transfer of that ownership interest within that
participant will be effected only through, records maintained by that
participant. DTC has no knowledge of the actual beneficial owners of the
preferred stock or depositary shares, as the case may be, represented by a
global preferred security. Beneficial owners will not receive written
confirmation from DTC of their purchase, but beneficial owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the participants through
17
<PAGE> 21
which the beneficial owners entered the transaction. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such laws may impair the
ability to transfer beneficial interests in a global preferred security.
Payments on preferred stock and depositary shares represented by a
global preferred security registered in the name of or held by DTC or its
nominee will be made to DTC or its nominee, as the case may be, as the
registered owner and holder of the global preferred security representing the
preferred stock or depositary shares. We have been advised by DTC that upon
receipt of any payment on a global preferred security, DTC will immediately
credit accounts of participants on its book-entry registration and transfer
system with payments in amounts proportionate to their respective beneficial
interests in that global preferred security as shown in the records of DTC.
Payments by participants to owners of beneficial interests in a global
preferred security held through those participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name,"
and will be the sole responsibility of those participants, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Neither we nor any of our agents will be responsible for any aspect of
the records of DTC, any nominee or any participant relating to, or payments
made on account of beneficial interests in a global preferred security or for
maintaining, supervising or reviewing any of the records of DTC, any nominee or
any participant relating to such beneficial interests.
A global preferred security is exchangeable for definitive
certificated preferred stock or depositary receipts, as the case may be,
registered in the name of, and a transfer of a global preferred security may be
registered to, a person other than DTC or its nominee, only if:
o DTC notifies us that it is unwilling or unable to continue as
depositary for the global preferred security or at any time
DTC ceases to be registered under the Securities Exchange Act
of 1934; or
o We determine in our discretion that the global preferred
security shall be exchangeable for definitive preferred stock
or depositary receipts, as the case may be, in registered
form.
Any global preferred security that is exchangeable pursuant to the
preceding sentence will be exchangeable in whole for definitive certificated
preferred stock or depositary receipts, as the case may be, registered by the
registrar in the name or names instructed by DTC. We expect that those
instructions may be based upon directions received by DTC from its participants
with respect to ownership of beneficial interests in that global preferred
security.
Except as provided above, owners of the beneficial interests in a
global preferred security will not be entitled to receive physical delivery of
certificates representing shares of preferred stock or depositary shares, as
the case may be, and will not be considered the holders of preferred stock or
depositary shares, as the case may be. No global preferred security shall be
exchangeable except for another global preferred security to be registered in
the name of DTC or its nominee. Accordingly, each person owning a beneficial
interest in a global preferred security must rely on the procedures of DTC and,
if that person is not a participant, on the procedures of the participant
through which that person owns its interest, to exercise any rights of a holder
of preferred stock or depositary shares, as the case may be.
We understand that, under existing industry practices, in the event
that we request any action of holders, or an owner of a beneficial interest in
a global preferred security desires to give or take any action that a holder of
preferred stock or depositary shares, as the case may be, is entitled to give
or take, DTC would authorize the participants holding the relevant beneficial
interests to give or take that action and those participants would authorize
beneficial owners owning through those participants to give or take that action
or would otherwise act upon the instructions of beneficial owners owning
through them.
A brief description of DTC is set forth above under "Description of
Debt Securities--Permanent Global Debt Securities."
18
<PAGE> 22
LEGAL OPINIONS
The legality of the securities will be passed upon for us by Andrews &
Kurth L.L.P., Houston, Texas. If the securities are being distributed in an
underwritten offering, certain legal matters will be passed upon for the
underwriters by counsel identified in the related prospectus supplement.
EXPERTS
The consolidated financial statements and financial statement schedule
incorporated in this prospectus by reference to our Annual Report on Form 10-K
for the year ended December 31, 1998, have been so incorporated in reliance on
the reports of Arthur Andersen LLP, independent accountants, given on the
authority of said firm as experts in accounting and auditing.
19
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
securities being registered hereby, other than underwriting discounts and
commissions, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee . . . . . . . . . . . . . . . . . . . . $69,500
*Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
*Accountants' Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
*Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000
*Printing and Engraving Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
*Rating Agency Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,000
*State Qualification Expenses (including legal fees) . . . . . . . . . . . . . . . . . . . $4,000
*Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,500
------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $314,000
============
</TABLE>
_________________
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
II-1
<PAGE> 24
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 or in the defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; that indemnification provided
by Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and empowers the corporation to purchase and maintain insurance
on behalf of a director or officer of the corporation against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit.
Section 5.07 of Houston Exploration's Restated Certificate of
Incorporation, as amended, states that:
"(a) No person who is or was a director of the Corporation
shall be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL or (iv) for any
transaction from which the director derived an improper personal
benefit.
(b) If the DGCL is hereafter amended to authorize
corporate action further limiting or eliminating the personal
liability of directors, then the personal liability of the directors
to the Corporation or its stockholders shall be limited or eliminated
to the full extent permitted by the DGCL, as so amended from time to
time."
Article VIII of Houston Exploration's Restated Bylaws further provides
that Houston Exploration shall indemnify its officers, directors, employees and
agents to the fullest extent permitted by law. Pursuant to such provision,
Houston Exploration has entered into agreements with various of its officers,
directors and employees which provide for indemnification of such persons.
In addition, Houston Exploration and certain other persons may be
entitled under agreements entered into with agents or underwriters to
indemnification by such agents or underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribution with
respect to payments which Houston Exploration or such persons may be required
to make in respect thereof.
II-2
<PAGE> 25
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
*1.1 Form of Common Stock Underwriting Agreement.
*1.2 Form of Preferred Stock Underwriting Agreement.
*1.3 Form of Debt Securities Underwriting Agreement.
*4.1 Form of Senior Debt Indenture (including form of Senior Debt Security).
*4.2 Form of Senior Subordinated Debt Indenture (including form of Senior Subordinated Debt
Security).
*4.3 Form of Subordinated Debt Indenture (including form of Subordinated Debt Security).
*4.4 Form of Deposit Agreement with respect to the Depositary Shares (including the
terms of Depositary Receipts to be issued thereunder).
*4.5 Form of Stock Purchase Contract.
4.6 Restated Certificate of Incorporation, as amended (filed as Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 001-11899) and incorporated
by reference herein).
4.7 Restated Bylaws (filed as Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997 (File No. 001-11899) and incorporated by reference herein).
*5.1 Opinion of Andrews & Kurth L.L.P. with respect to legality of the securities.
12.1 Statement with respect to Computation of Ratio of Earnings to Fixed Charges.
*23.1 Consent of Andrews & Kurth L.L.P. (included as part of Exhibit 5.1).
23.2 Consent of Arthur Andersen L.L.P.
23.3 Consent of Netherland, Sewell & Associates, Inc.
23.4 Consent of Miller & Lents, Ltd.
23.5 Consent of Ryder Scott Company
24.1 Powers of Attorney of Directors and Officers of the Registrant (included on Registration Statement
Signature Page).
*25.1 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Trustee
for the Senior Debt Securities.
*25.2 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 for the
Senior Subordinated Debt Securities.
*25.3 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Trustee
for the Subordinated Debt Securities.
- --------------
</TABLE>
* To be filed as an exhibit to a Current Report on Form 8-K of
the registrant in connection with a specific offering.
ITEM 17. UNDERTAKINGS.
Houston Exploration hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement: (i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement;
notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration
II-3
<PAGE> 26
Fee" table in the effective Registration Statement; and (iii) to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that clauses (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed by Houston
Exploration pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of Houston Exploration's
annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) To file an application for the purpose of determining
the eligibility of the trustee to act under subsection (a) of Section
310 of the Trust Indenture Act of 1939 in accordance with the rules
and regulations prescribed by the Commission under Section 305(b)(2)
of the Trust Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of Houston Exploration pursuant to the foregoing provisions, or
otherwise, Houston Exploration has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Houston Exploration of expenses incurred
or paid by a director, officer or controlling person of Houston Exploration in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Houston Exploration will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy, as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-4
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on May 19, 1999.
THE HOUSTON EXPLORATION COMPANY
By: /s/ James G. Floyd
-------------------------------------
James G. Floyd
President and Chief Executive Officer
II-5
<PAGE> 28
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints James G. Floyd and James F. Westmoreland, and each of them, his true
and lawful attorney-in-fact and agent, with full powers of substitution, for
him and in his name, place and stead, in any and all capacities, to sign and to
file any and all amendments, including post-effective amendments, to this
registration statement with the Securities and Exchange Commission granting to
said attorney-in-fact power and authority to perform any other act on behalf of
the undersigned required to be done in connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C> <C>
/s/ James G. Floyd President, Chief Executive Officer and May 19, 1999
--------------------------------- Director (Principal Executive Officer)
James G. Floyd
/s/ James F. Westmoreland Vice President, Chief Accounting Officer, May 19, 1999
--------------------------------- Comptroller and Secretary (Principal
James F. Westmoreland Financial Officer and Principal Accounting
Officer)
/s/ Robert B. Catell Chairman of the Board of Directors May 19, 1999
---------------------------------
Robert B. Catell
/s/ Gordon F. Ahalt Director May 19, 1999
---------------------------------
Gordon F. Ahalt
/s/ Russell D. Gordy Director May 19, 1999
---------------------------------
Russell D. Gordy
/s/ Craig G. Matthews Director May 19, 1999
---------------------------------
Craig G. Matthews
/s/ James Q. Riordan Director May 19, 1999
---------------------------------
James Q. Riordan
/s/ Donald C. Vaughn Director May 19, 1999
---------------------------------
Donald C. Vaughn
</TABLE>
II-6
<PAGE> 29
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
*1.1 Form of Common Stock Underwriting Agreement.
*1.2 Form of Preferred Stock Underwriting Agreement.
*1.3 Form of Debt Securities Underwriting Agreement.
*4.1 Form of Senior Debt Indenture (including form of Senior Debt Security).
*4.2 Form of Senior Subordinated Debt Indenture (including form of Senior Subordinated
Debt Security).
*4.3 Form of Subordinated Debt Indenture (including form of Subordinated Debt Security).
*4.4 Form of Deposit Agreement with respect to the Depositary Shares
(including the terms of Depositary Receipts to be issued thereunder).
*4.5 Form of Stock Purchase Contract.
4.6 Restated Certificate of Incorporation, as amended (filed as Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 001-
11899) and incorporated by reference herein).
4.7 Restated Bylaws (filed as Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997 (File No. 001-11899) and incorporated by reference
herein).
*5.1 Opinion of Andrews & Kurth L.L.P. with respect to legality of the securities.
12.1 Statement with respect to Computation of Ratio of Earnings to Fixed Charges.
*23.1 Consent of Andrews & Kurth L.L.P. (included as part of Exhibit 5.1).
23.2 Consent of Arthur Andersen L.L.P.
23.3 Consent of Netherland, Sewell & Associates, Inc.
23.4 Consent of Miller & Lents, Ltd.
23.5 Consent of Ryder Scott Company.
24.1 Powers of Attorney of Directors and Officers of the Registrant (included on Registration
Statement Signature Page).
*25.1 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
Trustee for the Senior Debt Securities.
*25.2 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 for
the Senior Subordinated Debt Securities.
*25.3 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
Trustee for the Subordinated Debt Securities.
</TABLE>
______________
* To be filed as an exhibit to a Current Report on Form 8-K of
the registrant in connection with a specific offering.
II-7
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
---------- -------- -------------------- ----- -------- -----------------
1999 1998 1998 1997 1996 1995 1994
-------- --------- ---------- --------- --------- -------- ---------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
FIXED CHARGES:
Gross interest expense $ 5,782 $ 2,307 $ 14,414 $ 6,811 $ 6,365 $ 5,297 $ 3,597
Interest portion of
rent expense 10 10 39 32 29 25 20
-------- --------- ---------- --------- --------- -------- ---------
5,792 2,317 14,453 6,843 6,394 5,322 3,617
EARNINGS:
Income (loss) before taxes 796 6,908 (113,440) 33,423 10,847 (4,112) 5,951
Plus: fixed charges 5,792 2,317 14,453 6,843 6,394 5,322 3,617
Less: capitalized interest (2,761) (2,007) (9,817) (5,873) (3,490) (2,899) (1,495)
-------- --------- ---------- --------- --------- -------- ---------
$ 3,827 $ 7,218 $(108,804) $ 34,393 $ 13,751 $(1,689) $ 8,073
RATIO OF EARNINGS TO
CHARGES 0.7x 3.1x -- 5.0x 2.2x -- 2.2x
</TABLE>
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-3 of our
report dated February 9, 1999 included in the Annual Report on Form 10-K of The
Houston Exploration Company for the for the year ended December 31, 1998, and
to all references to Arthur Andersen LLP included in this Registration
Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
New York, New York
May 19, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 to references to us under captions "Part I,
Item 1 and 2. Business and Properties - Natural Gas and Oil Reserves" in the
Annual Report on Form 10-K of The Houston Exploration Company for the year
ended December 31, 1998.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ Danny D. Simmons
---------------------------
Danny D. Simmons
Senior Vice President
Houston, Texas
May 18, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 to references to Miller and Lents, Ltd. under
captions "Part I, Item 1 and 2. Business and Properties - Natural Gas and Oil
Reserves" in the Annual Report on Form 10-K of The Houston Exploration Company
for the year ended December 31, 1998.
MILLER AND LENTS, LTD.
By /s/ P.G. VON TUNGELN
------------------------
P.G. Von Tungeln
Chairman
Houston, Texas
May 19, 1999
<PAGE> 1
EXHIBIT 23.5
CONSENT OF RYDER SCOTT COMPANY
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 to references to us under captions "Part I, Item 1 and 2.
Business and Properties - Natural Gas and Oil Reserves" in the Annual Report on
Form 10-K of The Houston Exploration Company for the year ended December 31,
1998.
/s/ Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
May 18, 1999
