As filed with the Securities and Exchange Commission on September 26, 1996
Registration No.333-11927
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POGO PRODUCING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 5 GREENWAY PLAZA, SUITE 2700
(STATE OR OTHER JURISDICTION OF HOUSTON, TEXAS 77046
INCORPORATION OR ORGANIZATION) (713) 297-5000
(Address, including zip code, and
telephone number, including area code,
of registrant's principal executive
offices)
74-1659398
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
GERALD A. MORTON
CORPORATE SECRETARY AND
ASSOCIATE GENERAL COUNSEL
POGO PRODUCING COMPANY
5 GREENWAY PLAZA, SUITE 2700
HOUSTON, TEXAS 77046
(713) 297-5000
(Name, address, including zip code, and telephone number
including area code, of agent for service)
WITH A COPY TO:
Stephen A. Massad., Esq.
Baker & Botts, L.L.P.
3000 One Shell Plaza
Houston, Texas 77002
(713) 229-1234
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
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 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,
please check the following box. [ ]
<PAGE>
PROSPECTUS $115,000,000
[LOGO] POGO PRODUCING COMPANY
5 1/2% CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2006
The 5 1/2% Convertible Subordinated Notes due June 15, 2006 (the
"Notes") of Pogo Producing Company, a Delaware corporation (the "Company"), and
the shares of common stock, par value $1 per share, of the Company (the "Common
Stock") issuable upon conversion thereof (the Notes and the shares of Common
Stock issuable upon conversion thereof are sometimes referred to hereafter
collectively as the "Securities"), may be offered for sale from time to time for
the account of certain holders of the Securities (the "Selling Holders") as
described under "Selling Holders". The Notes were initially issued and sold
pursuant to a Purchase Agreement dated as of June 11, 1996 between Goldman,
Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
(collectively, the "Initial Purchasers") and the Company. The Selling Holders
acquired the Notes from the Initial Purchasers or holders who acquired the Notes
from the Initial Purchasers or other prior holders thereof either (a) from the
Initial Purchasers in transactions complying with Rule 144A, Regulation D or
Regulation S under the Securities Act or (b) in other permitted resale
transactions exempt from registration under the Securities Act. The Company will
not receive any of the proceeds from the sale by the Selling holders of any of
the Securities. See "Use of Proceeds".
The Selling Holders may, from time to time, sell the Securities
offered hereby to or through one or more underwriters, directly to other
purchasers or through agents in ordinary brokerage transactions, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale, at
prices related to then prevailing market prices or at negotiated prices. See
"Plan of Distribution". The Notes have been designated for trading on the PORTAL
System of the National Association of Securities Dealers, Inc. ("PORTAL"). The
Company intends to apply to have the shares of Common Stock issuable upon
conversion of the Notes listed on the New York Stock Exchange and the Pacific
Stock Exchange where the Company's common stock currently trades under the
symbol "PPP". See "Risk Factors -- Absence of Public Trading Market; Transfer
Restrictions".
The Notes are convertible at any time prior to the close of business
on the maturity date, unless previously redeemed or repurchased, at a conversion
price of $42.185 per share (equivalent to a conversion rate of 23.7051 shares
per $1,000 principal amount of Notes), subject to adjustment upon the occurrence
of certain events. See "Description of Notes -- Conversion Rights". On September
24, 1996, the last reported sales price of the Company's Common Stock, which is
quoted on the New York Stock Exchange under the symbol "PPP", was $35.25 per
share.
Interest on the Notes is payable semi-annually in arrears on June 15
and December 15 of each year, commencing on December 15, 1996. The Notes are
redeemable at the option of the Company, on or after June 15, 1999, in whole or
in part, at the redemption prices set forth herein, plus accrued interest to the
redemption date. See "Description of Notes -- Redemption at Option of Company".
The Notes are not entitled to any sinking fund. The Notes will mature on June
15, 2006.
In the event of a Change in Control (as defined) constituting a
Repurchase Event (as defined), each holder of Notes may require the Company to
repurchase its Notes, in whole or in part, for cash or, at the Company's option,
Common Stock (valued at 95% of the average closing sales prices for the five
trading days immediately preceding the second trading day prior to the
repurchase date) at a repurchase price of 100% of the principal amount of Notes
to be repurchased, plus accrued interest to the repurchase date. See
"Description of Notes -- Certain Rights to Require Repurchase of Notes".
The Notes are unsecured obligations of the Company subordinated in
right of payment to all existing and future Senior Indebtedness (as defined) of
the Company and effectively subordinated in right of payment to all indebtedness
and other liabilities of the Company's subsidiaries. The Indenture (as defined)
will not restrict the Company or its subsidiaries from incurring additional
Senior Indebtedness or other indebtedness and liabilities. See "Description of
Notes -- Subordination".
------------------
Investors should review the information contained or incorporated by
reference herein. IN PARTICULAR SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED PRIOR TO INVESTING IN THE SECURITIES.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
The date of this Prospectus is September 26, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission may be
inspected and copied at the Public Reference Section of the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
the following Regional Offices of the Commission: Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60601-2511; and New York Regional Office, Seven World Trade Center, New
York, New York 10048. Copies of such material may also be obtained from the
Public Reference Section of the Commission at its principal office at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Company's Common Stock is listed on the New York Stock Exchange and
the Pacific Stock Exchange. Consequently, the Company's registration statements,
reports, proxy statements and other information may also be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005 and the Pacific Stock Exchange, 301 Pine Street, San Francisco, California
94104. The Commission maintains an Internet web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission (http:\\www.sec.gov).
This prospectus (the "Prospectus"), which constitutes a part of a
registration statement on Form S-3 (the "Registration Statement") filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), omits certain of the information set forth in the
Registration Statement. Reference is hereby made to the Registration Statement
and to the exhibits thereto for further information with respect to the Company
and the securities offered hereby. Statements contained herein concerning the
provisions of such documents are necessarily summaries of such documents, and
each such statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission. Copies of the Registration
Statement and the exhibits thereto are on file at the offices of the Commission
and may be obtained upon payment of the fee prescribed by the Commission, or may
be examined without charge at the public reference facilities of the Commission
described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December
31, 1995 (the "Annual Report"); the Company's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1996 and June 30, 1996; all other reports filed by
the Company pursuant to Sections 13(a) or 15(d) of the Exchange Act since
December 31, 1995 and the description of the Common Stock contained in the
Company's registration statement filed pursuant to Section 12(g) of the Exchange
Act, including any amendment or reports filed for the purpose of updating such
description filed by the Company, all of which are on file with the Commission
are incorporated in this Prospectus and made a part hereof.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to December 31, 1995 and prior to the
termination of the offering of the Securities hereunder by the Selling Holders
(the "Offering") shall be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed incorporated document or in any accompanying prospectus
supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Copies of all documents incorporated herein by reference other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference) will be provided without charge to each person who receives a copy
of this Prospectus upon written or oral request to Gerald A. Morton, Corporate
Secretary and Associate General Counsel, Pogo Producing Company, P.O. Box 2504,
Houston, Texas 77252-2504 (telephone: (713) 297-5017).
--------------------------
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<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
FORWARD LOOKING STATEMENTS
This Prospectus and the reports and filings incorporated by reference
herein include "forward-looking statements" within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. All statements included
herein and therein other than statements of historical fact are forward-looking
statements. Such forward-looking statements include, without limitation, the
statements herein and therein regarding the timing of future events regarding
the Company's operations in Thailand and the statements set forth in the reports
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" regarding the
Company's anticipated future financial position and cash requirements. Although
the Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from the Company's expectations ("Cautionary Statements") are
disclosed in this Prospectus and the reports, including without limitation in
connection with such forward-looking statements. All subsequent written and oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by the Cautionary Statements.
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<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN. PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER THE CAPTION "RISK FACTORS."
THE OFFERING
Issuer.................... Pogo Producing Company, a Delaware corporation.
Securities Offered........ $115,000,000 principal amount of 5
1/2%Convertible Subordinated Notes dUE June 15,
2006 issued under an indenture (the
"Indenture") between the Company and Fleet
National Bank, as trustee (the "Trustee"), and
Common Stock issuable upon conversion thereof.
Interest ................. Interest on the Notes is payable semi-annually
in arrears on June 15 and December 15 of each
year, commencing December 15, 1996.
Conversion Rights......... The Notes are convertible into shares of Common
Stock of the Company at any time prior to the
close of business on the maturity date at the
conversion price set forth below. Holders (as
defined in the Indenture) of Notes called for
redemption are entitled to convert the Notes up
to, but not after, the close of business on the
day preceding the date fixed for redemption.
The conversion price is $42.185 per share
(equivalent to a conversion rate of
approximately 23.7051 shares per $1000
principal amount of Notes), subject to
adjustment upon the occurrence of certain
events. See "Description of Notes -- Conversion
Rights".
Subordination............. The Notes are unsecured and subordinated to
present and future Senior Indebtedness (as
defined) of the Company. The Notes are also
effectively subordinated in right of payment to
all indebtedness and other liabilities of the
Company's subsidiaries, including all
indebtedness and liabilities incurred by the
Company's wholly owned subsidiary Thaipo
Limited ("Thaipo") in connection with the
development of the Company's interest in the
Block B8/32 concession license located in the
Gulf of Thailand (the "Concession"). See "Risk
Factors -- Subordination of Notes; Leverage and
Debt Service". The Indenture does not restrict
the incurrence of Senior Indebtedness or other
indebtedness or liabilities by the Company or
any of its subsidiaries. See "Description of
Notes -- Subordination".
Optional Redemption....... The Notes are redeemable at the option of the
Company, in whole or in part, at any time on or
after June 15, 1999, at the redemption prices
set forth herein plus accrued interest to
redemption date. Accrued and unpaid interest to
the redemption date shall be payable with
respect to Notes that are converted after a
notice of redemption has been mailed and prior
to the redemption date. See "Description of the
Notes -- Redemption at Option of Company."
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<PAGE>
Repurchase at Holder's
Option................ Upon the occurrence of a Change in Control
constituting a Repurchase Event, each Holder of
Notes shall have the right, at the holder's
option, to require the Company to repurchase
such Notes at 100% of their principal amount,
plus accrued interest. The term Repurchase
Event is limited to certain transactions
involving a Change of Control (as defined) in
which (i) the market price of the Common Stock
at the time of, and the fair market value of
the consideration received in, such transaction
are less than 105% of the conversion price and
(ii) the Notes become convertible into
securities other than publicly traded common
stock. The repurchase price is payable in cash
or, at the option of the Company but subject to
the satisfaction of certain conditions on the
part of the Company, in shares of Common Stock
(valued at 95% of the average closing sales
prices of the Common Stock for the five trading
days preceding the second trading day prior to
the repurchase date). See "Description of Notes
-- Certain Rights to Require Repurchase of
Notes".
Use of Proceeds........... The Company will not receive any of the
proceeds from the sale by the Selling Holders
of any of the Securities.
Governing Law............. The Indenture and the Notes are governed by the
laws of the State of New York.
Listings.................. The Notes have been designated for trading on
PORTAL. The Company has applied to have
the shares of Common Stock issuable upon
conversion of the Notes listed on the New York
Stock Exchange and the Pacific Stock Exchange
where the Company's common stock currently
trades under the symbol "PPP" and anticipates
` that such shares will be admitted for listing
shortly after the effectiveness of this
Registration Statement. On September 24,
1996, the last reported sale price of the
Common Stock on the New York Stock Exchange was
$35.25 per share.
For additional information concerning the Notes, see "Description of the Notes."
5
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION INCLUDED ELSEWHERE IN THIS
PROSPECTUS, THE FOLLOWING RISK FACTORS SHOULD BE CAREFULLY CONSIDERED IN
EVALUATING AN INVESTMENT IN THE NOTES OFFERED HEREBY AND THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION THEREOF. THIS PROSPECTUS CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT"), WHICH INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL
RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE,
BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THIS SECTION.
VOLATILITY OF OIL AND GAS MARKETS
The Company's profitability and cash flow are highly dependent upon the
prices of oil and natural gas, which historically have been seasonal, cyclical
and volatile. In general, prices of oil and gas are dependent upon numerous
factors beyond the control of the Company, including various weather, economic,
political and regulatory conditions. In the past, when natural gas prices in the
United States were lower than they are currently, the Company at times elected
to curtail certain quantities of its production. For example, in the fourth
quarter of 1994, the Company curtailed a small portion of its daily natural gas
production. As of September 25, 1996, the Company was not curtailing any of its
natural gas production as a result of low natural gas prices. Should natural gas
prices fall again in the future, the Company may again elect to curtail certain
quantities of its natural gas production. Any significant decline in oil or gas
prices could have a material adverse effect on the Company's operations and
financial condition and could, under certain circumstances, result in a
reduction in funds available under the Company's bank revolving credit facility
(the "Credit Agreement").
Because it is impossible to predict future oil and gas price movements
with any certainty, the Company from time to time enters into contracts on a
portion of its production to hedge against the volatility in oil and gas prices.
Such hedging transactions, historically, have never exceeded 50% of the
Company's total oil and gas production on an energy equivalent basis for any
given period. While intended to limit the negative effect of price declines,
such transactions could effectively limit the Company's participation in price
increases for the covered period, which increases could be significant. As of
September 25, 1996, the Company was not a party to any natural gas futures
contracts or crude oil swap agreements.
ESTIMATES OF RESERVES AND FUTURE NET REVENUES
There are numerous uncertainties in estimating the quantity of proved
reserves and in projecting the future rates of production and timing of
development expenditures. Oil and gas reserve engineering must be recognized as
a subjective process of estimating underground accumulations of oil and gas that
cannot be measured in an exact way, and estimates of other engineers might
differ materially from those of Ryder Scott Petroleum Engineers ("Ryder Scott"),
the Company's reserve engineers. The accuracy of any reserve estimate is a
function of the quality of available data and of engineering and geological
interpretation and judgment. Results of drilling, testing and production
subsequent to the date of the estimate may justify revision of such estimate.
Accordingly, reserve estimates are often different from the quantities of oil
and gas that are ultimately recovered. In addition, estimates of the Company's
future net revenues from proved reserves and the present value thereof are based
on certain assumptions regarding future oil and gas prices, production levels
and operating and development costs that may not prove to be correct. Any
significant variance in these assumptions could materially affect the estimates
of reserves and future net revenues therefrom set forth in the Company's annual
reports.
OPERATING AND UNINSURED RISKS
The Company must continually acquire or explore for and develop new oil
and natural gas reserves to replace those produced and sold. Without successful
drilling, acquisition or exploration operations, the Company's hydrocarbon
reserves and revenues would decline. Although the Company has historically
maintained its reserves base through successful exploration and production and a
number of acquisitions, there can be no assurance that future efforts will be
similarly successful. The Company's operations are also subject to risks
inherent in the exploration for and production of oil and natural gas, such as
blowouts, cratering, explosions, uncontrollable flows of oil, natural gas or
well fluids, fires, pollution and other environmental risks. Offshore oil and
gas operations are subject to the additional hazards of marine operations, such
as capsizing, collision and adverse weather and sea conditions. These hazards
could result in substantial losses to the Company due to injury or loss of life,
severe damage to and destruction of property and equipment, pollution and other
environmental damage and suspension of operations. The Company carries insurance
which it believes is in accordance with customary industry practices, but is not
fully insured against all risks incident to its business.
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<PAGE>
Drilling activities are subject to numerous risks, including the risk
that no commercially productive hydrocarbon reserves will be encountered. The
cost of drilling, completing and operating wells is often uncertain. The
Company's drilling operations may be curtailed, delayed or canceled as a result
of numerous factors, including weather conditions, compliance with governmental
requirements and shortages or delays in the delivery of equipment. The
availability of a ready market for the Company's natural gas production depends
on a number of factors, including the demand for and supply of natural gas, the
proximity of natural gas reserves to pipelines, the available capacity of such
pipelines and government regulations. The marketing of offshore oil and gas
production is subject to the availability of pipelines and other transportation,
processing and refining facilities, as well as the existence of adequate
markets. As a result, even if hydrocarbons are discovered in commercial
quantities, a substantial period of time may elapse before commercial production
commences. If pipeline facilities in an area are insufficient, the Company may
have to await the construction or expansion of pipeline capacity before
production from that area can be marketed. The Company's domestic offshore
properties are generally located in areas where a pipeline infrastructure is
well developed and there is adequate availability in such pipelines to handle
the Company's current and projected future production. For a discussion of
additional risks regarding the Company's operations in Thailand, see "Risks of
Foreign Operations" and "Additional Risks Related to the Company's Operations in
the Kingdom of Thailand".
DEPENDENCE ON OTHER OPERATORS
Many of the Company's oil and gas properties are not operated by the
Company, including a majority of its offshore Gulf of Mexico properties. As a
result, the Company has limited control over the manner in which operations are
conducted on such non-operated properties, including the safety and
environmental standards used in connection therewith. Pursuant to the operating
agreements governing operations on the properties in which the Company has an
interest, the Company maintains significant influence or control over the nature
and timing of exploration and development activities on the majority of its
properties. Such agreements do not, however, allow the Company such influence or
control with respect to a portion of its properties; in such cases, the
operators of such properties generally have control with respect to the nature
and timing of exploration or development activities. In such instances, the
operators of such properties could refuse to initiate exploration or development
projects, in which case the Company would be required to propose such activities
and may be required to proceed with such activities without receiving any
funding from the operator, or the operators may initiate exploration or
development projects on a slower schedule than that preferred by the Company.
Any of these events could have a significant effect on the Company's anticipated
exploration and development activities.
SUBORDINATION OF NOTES; LEVERAGE AND DEBT SERVICE
The Notes are subordinated obligations of the Company and, as such, are
subordinated to all of the Company's existing and future Senior Indebtedness (as
defined in the Indenture relating to the Notes), including indebtedness under
the Credit Agreement. The Company expects to incur Senior Indebtedness from time
to time in the future under the Credit Agreement or otherwise, and the Indenture
relating to the Notes does not restrict the incurrence of any other indebtedness
or liabilities by the Company or its subsidiaries. Upon any distribution of
assets, liquidation, dissolution, reorganization or any similar proceeding by or
relating to the Company, the holders of Senior Indebtedness of the Company are
entitled to receive payment in full before the holders of the Notes are entitled
to receive any payment. The terms and conditions of the subordination provisions
pertinent to the Notes are described in more detail in "Description of the Notes
- -- Subordination".
Further, the Notes are effectively subordinated to claims of holders of
any preferred stock and claims of creditors (other than the Company) of the
Company's subsidiaries, including trade creditors, secured creditors, taxing
authorities, creditors holding guarantees, and tort claimants. In the event of a
liquidation, reorganization, or similar proceeding relating to a subsidiary,
these persons generally will have priority as to the assets of such subsidiary
over the claims and equity interest of the Company and, thereby indirectly,
holders of indebtedness of the Company, including the Notes. Among other
obligations, Thaipo has guaranteed its pro rata portion of commitments under a
ten year bareboat charter of a Floating Production, Storage and Offloading
facility to be used for development of the Tantawan production area. The portion
of the commitments under the bareboat charter guaranteed by Thaipo is currently
estimated at $9,303,000 per year. The documents governing such obligations state
that the Company has no liability for such obligations. In addition, other
liabilities may be incurred by the Company's subsidiaries in the future.
As of June 30, 1996, the Company's long-term debt (including the current
portion) was $202,550,000 and shareholders' equity was $87,882,000, and thus the
Company may continue to be considered highly leveraged. The Company believes
that its cash flow from operations, the funds available under the Credit
Agreement and its other sources of liquidity, will be adequate to meet its
anticipated requirements for working capital, capital expenditures, interest
payments and scheduled principal payments. However, the Company's ability to
meet its debt service obligations will be dependent upon its future performance,
which, in turn, will be subject to general economic conditions and to financial,
business and other
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<PAGE>
factors affecting the operations of the Company, many of which are beyond its
control. In the event of a Repurchase Event, the Company may be required,
subject to certain conditions, to purchase some or all of the outstanding Notes
at a price equal to 100% of the principal amount thereof, plus accrued interest.
The Company's ability to pay cash to the Holders of Notes upon a repurchase
might be limited by certain financial covenants contained in the Company's
Senior Indebtedness. In addition, there can be no assurance that the Company
would have sufficient financial resources at the time of any such required
purchase to enable it to repurchase such Notes. See "Description of the Notes --
Certain Rights to Require Repurchase of Convertible Notes".
GOVERNMENT REGULATION AND ENVIRONMENTAL RISKS
The Company's business is subject to certain laws and regulations
relating to taxation, exploration for and development and production of oil and
gas, and environmental and safety matters in both the United States and the
foreign countries in which the Company or any of its subsidiaries operates or
owns property. Various laws and regulations often require permits for drilling
wells and also cover spacing of wells, the prevention of waste of oil and gas
including maintenance of certain gas/oil ratios, rates of production and other
matters. The effect of these statutes and regulations, as well as other
regulations that could be promulgated by the jurisdictions in which the Company
has production, could be to limit the number of wells that could be drilled on
the Company's properties and to limit the allowable production from the
successful wells completed on the Company's properties, thereby limiting the
Company's revenues.
The discharge of oil, natural gas or other pollutants into the air, soil
or water may give rise to liabilities to the government and third parties and
may require the Company to incur costs to remedy the discharge. Oil or natural
gas may be discharged in many ways, including from a well or drilling equipment
at a drill site, leakage from storage tanks, pipelines or other gathering and
transportation facilities and discharges resulting from damage to oil or natural
gas wells resulting from, accidents during normal operations, as well as
blowouts, cratering and explosions. Discharged oil and gas may migrate through
soil to water supplies or adjoining properties, giving rise to additional
liabilities. A variety of laws and regulations govern the environmental aspects
of oil and gas production, transportation and processing and may, in addition to
other laws, impose liability in the event of discharges (whether or not
accidental), for failure to notify the proper authorities of a discharge and
other failures to comply with those laws. Environmental laws may also affect the
costs of the Company's acquisitions of oil and gas properties. The Company does
not believe that its environmental risks are materially different from those of
comparable companies in the oil and gas industry. Nevertheless, no assurance can
be given that environmental laws will not, in the future, result in a
curtailment of production or a material increase in the costs of production,
development or exploration or otherwise adversely affect the Company's
operations and financial condition. Pollution and similar environmental risks
generally are not fully insurable. See "-- Operating and Uninsured Risks".
RISKS OF FOREIGN OPERATIONS
Ownership of property interests and production operations in Thailand
and in any other areas outside the United States in which the Company may choose
to do business, are subject to the various risks inherent in foreign operations.
These risks may include, among other things, currency restrictions and exchange
rate fluctuations, loss of revenue, property and equipment as a result of
hazards such as expropriation, nationalization, war, insurrection and other
political risks, risks of increases in taxes and governmental royalties,
renegotiation of contracts with governmental entities, changes in laws and
policies governing operations of foreign-based companies and other uncertainties
arising out of foreign government sovereignty over the Company's international
operations. The Company's international operations may also be adversely
affected by laws and policies of the United States affecting foreign trade,
taxation and investment. In addition, in the event of a dispute arising from
foreign operations, the Company may be subject to the exclusive jurisdiction of
foreign courts or may not be successful in subjecting foreign persons to the
jurisdiction of the courts of the United States.
ADDITIONAL RISKS RELATED TO THE COMPANY'S OPERATIONS IN THE KINGDOM OF THAILAND
The Company's operations in the Kingdom of Thailand are subject to
additional risks. Among other things, the Company and its joint venture partners
will be required, on August 1, 1997, unless extended, to relinquish the
remaining exploration acreage in the Concession and will retain only those areas
which have been designated as production areas or for which designation as a
production area has been applied for or granted by the Thai government. In
addition, the marketing and sale of hydrocarbons produced from the Concession is
subject to numerous risks and uncertainties. For example, all oil and natural
gas produced from the Concession are expected to be sold to the Petroleum
Authority of Thailand ("PTT"), which maintains a monopoly over oil and gas
transmission and distribution in Thailand. The Concession is traversed by a
major (34 inches in diameter) natural gas pipeline that is owned and operated by
PTT which comes within approximately 25 miles of the Tantawan structure. This
pipeline is currently running at or near capacity. However, construction of a
second, parallel,
8
<PAGE>
36 inch in diameter pipeline that is also owned, and will be operated, by PTT is
expected to be completed during 1996. There can be no assurances, however, that
even if the Company is successful in its exploration efforts, it will be able to
successfully, economically and profitably transport, process, refine and market
the oil and gas it produces. PTT has contractually committed to construct a 24
inch lateral pipeline from the 36 inch pipeline to the Tantawan production area
and to take the gas produced therefrom pursuant to a Gas Sales Agreement (the
"GSA"). In the event that the required reserves or production rates of natural
gas at a specified quality level under the GSA are not delivered, then the
Company and its joint venture partners in the Tantawan production area will be
obligated to contribute to PTT's capital costs incurred in the construction of
the lateral pipeline. Also, under the GSA, the Tantawan joint venturers'
liability for failure to deliver the minimum contracted daily rate is limited to
PTT's right to take from subsequent deliveries an amount equal to the quantity
of natural gas not delivered at 75% of the contracted price. Cash flows
resulting from operations in Thailand are subject to Thai governmental
royalties, other governmental charges and income taxes. Since all gas sales
under the GSA are expected to be recognized in Baht, the Thai currency,
fluctuations in the exchange rate between Baht and dollars could have an adverse
effect on the anticipated profits of the Company's operations in Thailand. See
"Risk of Foreign Operations".
ABSENCE OF PUBLIC TRADING MARKET; TRANSFER RESTRICTIONS
There is no existing public trading market for the Notes (which
currently are registered to trade on the PORTAL System in the United States and
the Euroclear System outside the United States). There can be no assurance as to
the liquidity of any markets on which the Notes trade or any public market that
may develop, the ability of the holders of Notes to sell such securities, the
price at which the Holders of Notes would be able to sell such securities or
whether the existing trading markets for the Notes, or any public market that
may develop, if it develops, will continue. If such a public market for the
Notes were to exist, the Notes could trade at prices higher or lower than their
principal amount, depending on many factors, including prevailing interest
rates, the market for similar securities and the operating results of the
Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for each of the five fiscal years ended December 31, 1995 and the six
months ended June 30, 1996. For purposes of this table each Ratio of Earnings to
Fixed Charges consists of pre-tax earnings plus total interest charges,
including amortization of debt issue expenses, divided by total interest
charges, including amortization of debt issue expenses. These ratios should be
read in conjunction with the other financial information contained in the
documents incorporated herein by reference as described under "Documents
Incorporated by Reference."
Six Months Year Ended December 31,
Ended June 30, ---------------------------------
1996 1995 1994 1993 1992 1991
-------------- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges ......... 4.4 2.1 5.1 4.5 2.5 1.6
THE COMPANY
Pogo Producing Company is an independent oil and gas exploration and
production company. Domestically, the Company has an extensive Gulf of Mexico
reserve and acreage position and is also active in the Permian Basin of New
Mexico and Texas and the onshore Gulf Coast areas of Texas and Louisiana.
Internationally, the Company is the operator on a portion of a 1.3 million acre
concession license in the Gulf of Thailand.
The Company is a Delaware corporation. Its executive offices are located
at 5 Greenway Plaza, Suite 2700, Houston, Texas 77046-0504 and its telephone
number is (713)297-5000.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale by the Selling
Holders of any of the Securities.
9
<PAGE>
THE SELLING HOLDERS
The Notes were initially issued and sold pursuant to a Purchase
Agreement dated as of June 11, 1996 between Goldman, Sachs & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Initial
Purchasers") and the Company. The Selling Holders acquired the Notes from the
Initial Purchasers or holders who acquired the Notes from the Initial Purchasers
or other prior holders thereof either (a) from the Initial Purchasers in
transactions complying with Rule 144A, Regulation D or Regulation S under the
Securities Act or (b) in other permitted resale transactions exempt from
registration under the Securities Act. The Company agreed to indemnify and hold
the Initial Purchasers harmless against certain liabilities under the Securities
Act that would or could arise in connection with the sale of the Notes by the
Initial Purchasers.
Except as otherwise indicated, the table below sets forth certain
information with respect to the Selling Holders and the Securities as of
September 23, 1996. The term Selling Holders includes the beneficial owners of
the Securities listed below and their respective transferees, pledgees, donees
or other successors. Other than as a result of the ownership of Securities
indicated below, none of the Selling Holders has had any material relationship
with the Company or any of its affiliates within the past three years.
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL NUMBER OF SHARES OF
AMOUNT OF NOTES OWNED COMMON STOCK OWNED BY
BY THE SELLING HOLDER AND THE SELLING HOLDER AND
NAME OF SELLING HOLDER WHICH ARE OFFERED HEREBY WHICH ARE OFFERED HEREBY(1)
---------------------- ------------------------ ---------------------------
<S> <C> <C>
Allstate Insurance Company $ 1,500,000 35,557
American Investors Life Insurance
Company(2) 500,000 11,852
Bankers Trust NY Corporation 100,000 2,370
Christian Science Trustees for
Gifts and Endowments 135,000 3,200
Continental Assurance Company 750,000 17,778
Continental Assurance Company
Separate Account(E) 2,300,000 54,521
Cova Bond Debenture Fund 50,000 1,185
Declaration of Trust for the
Defined Benefit Plan of ICI
American Holdings Inc. 510,000 12,089
Declaration of Trust for the
Defined Benefit Plans of
ZENENCA Holdings Inc. 355,000 8,415
Delaware State Employees'
Retirement Fund 1,680,000 39,824
</TABLE>
- ------------
(1) Unless otherwise noted, the nature of beneficial ownership is sole
voting and/or investment power. Common Stock ownership assumes as the conversion
price, the initial conversion price of $42.185 per share of Common Stock
(equivalent to a conversion rate of approximately 23.7051 shares per $1000
principal amount of Notes), and a cash payment in lieu of any fractional share
interest. Unless otherwise noted, no Selling Holder reported owning any shares
of Common Stock other than those into which the Notes were convertible.
(2) These Securities are reported as beneficially owned by Salomon
Brothers Asset Management Inc ("SBAM") on the basis that SBAM has investment
discretion with respect to such Securities.
10
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL NUMBER OF SHARES OF
AMOUNT OF NOTES OWNED COMMON STOCK OWNED BY
BY THE SELLING HOLDER AND THE SELLING HOLDER AND
NAME OF SELLING HOLDER WHICH ARE OFFERED HEREBY WHICH ARE OFFERED HEREBY(3)
---------------------- ------------------------ ---------------------------
<S> <C> <C>
Delta Air Lines Master Trust 2,865,000 67,915
Farmers Automobile Insurance
Association 100,000 2,370
Fidelity Contrafund(4) 13,900,000 329,500(5)
Fidelity Financial Trust:
Fidelity Convertible
Securities Fund(4) 12,050,000 285,646
Fidelity Management Trust Company
on behalf of an account
managed by it(6) 4,950,000 117,340
First Church of Christ, Scientist -
Endowment 165,000 3,911
Forest Fulcrum Fund Ltd. 1,000,000 23,705
Forest Fulcrum Fund LP 1,000,000 23,705
General Motors Employees
Domestic Group Trust 4,760,000 112,836
General Motors Hourly Rate Employees
Pension Plan and General Motors
Retirement Program for Salaried
Employees(7) 2,000,000 47,410
Hillside Capital Incorporated
Corporate Account 150,000 3,555
</TABLE>
- ------------
(3) Unless otherwise noted, the nature of beneficial ownership is
sole voting and/or investment power. Common Stock ownership assumes as the
conversion price, the initial conversion price of $42.185 per share of Common
Stock (equivalent to a conversion rate of approximately 23.7051 shares per $1000
principal amount of Notes), and a cash payment in lieu of any fractional share
interest. Unless otherwise noted, no Selling Holder reported owning any shares
of Common Stock other than those into which the Notes were convertible.
(4) This entity is either an investment company or a portfolio of an
investment company registered under Section 8 of the Investment Company Act of
1940, as amended, or a private investment account advised by Fidelity Management
& Research Company ("FMR Co."). FMR Co. is a Massachusetts corporation and an
investment advisor registered under Section 203 of the Investment Advisers Act
of 1940, as amended, and provides investment advisory services to this entity,
and to other registered investment companies and to certain other funds which
are generally offered to a limited group of investors. FMR Co. is wholly-owned
subsidiary of FMR Corp. ("FMR"), a Massachusetts corporation.
(5) This amount does not include, as of September 23, 1996, an
additional 1,612,700 shares of Common Stock held by the Selling Holder that are
not being registered for resale pursuant to this Registration Statement.
(6) The Securities indicated as owned by this entity are owned directly
by an employee benefit plan for which Fidelity Management Trust Company ("FMTC")
serves as trustee or managing agent. FMTC is a wholly-owned subsidiary of FMR
and a bank as defined in Section 3(a)(6) of the Exchange Act.
(7) These Securities are reported as beneficially owned by SBAM on the
basis that SBAM has investment discretion with respect to such Securities.
11
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL NUMBER OF SHARES OF
AMOUNT OF NOTES OWNED COMMON STOCK OWNED BY
BY THE SELLING HOLDER AND THE SELLING HOLDER AND
NAME OF SELLING HOLDER WHICH ARE OFFERED HEREBY WHICH ARE OFFERED HEREBY(8)
---------------------- ------------------------ ---------------------------
<S> <C> <C>
Lazard Freres & Co. L.L.C.(9) 1,000,000 23,705
Massachusetts Financial Company
Total Return Fund 2,000,000 47,410
NB Convertible Arbitrage Partners, LP 200,000 4,741
Northstar Income & Growth Fund 3,350,000 79,412
Northstar Income & Growth -
Variable Annuity 150,000 3,555
OCM Convertible Trust 4,385,000 103,946
Salomon Brothers U.S. Hybrid Equity
Fund NV(10) 75,000 1,777
State Employees' Retirement
Fund of the State of Delaware 1,000,000 23,705
State of Connecticut Combined
Investment Funds 3,000,000 71,115
Teepak, Inc. Master Retirement
Trust 45,000 1,066
Thermo Electron Balanced
Investment Fund 500,000 11,852
Variable Insurance Products Fund II:
Contrafund Portfolio(11) 1,100,000 26,075(12)
----------- ------------
</TABLE>
- ------------
(8) Unless otherwise noted, the nature of beneficial ownership is
sole voting and/or investment power. Common Stock ownership assumes as the
conversion price, the initial conversion price of $42.185 per share of Common
Stock (equivalent to a conversion rate of approximately 23.7051 shares per $1000
principal amount of Notes), and a cash payment in lieu of any fractional share
interest. Unless otherwise noted, no Selling Holder reported owning any shares
of Common Stock other than those into which the Notes were convertible.
(9) The information set forth with respect to this Selling Holder is
true and complete as September 23, 1996.
(10) These Securities are reported as beneficially owned by SBAM on the
basis that SBAM has investment discretion with respect to such Securities.
(11) This entity is either an investment company or a portfolio of an
investment company registered under Section 8 of the Investment Company Act of
1940, as amended, or a private investment account advised by Fidelity Management
& Research Company ("FMR Co."). FMR Co. is a Massachusetts corporation and an
investment advisor registered under Section 203 of the Investment Advisers Act
of 1940, as amended, and provides investment advisory services to this entity,
and to other registered investment companies and to certain other funds which
are generally offered to a limited group of investors. FMR Co. is wholly-owned
subsidiary of FMR Corp. ("FMR"), a Massachusetts corporation.
(12) This amount does not include, as of September 23, 1996, an
additional 137,700 share of Common Stock held by Selling Holder that are not
being registered for resale pursuant to this Registration Statement.
12
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL NUMBER OF SHARES OF
AMOUNT OF NOTES OWNED COMMON STOCK OWNED BY
BY THE SELLING HOLDER AND THE SELLING HOLDER AND
NAME OF SELLING HOLDER WHICH ARE OFFERED HEREBY WHICH ARE OFFERED HEREBY(13)
---------------------- ------------------------ ----------------------------
<S> <C> <C>
SUBTOTAL . . . . . . . . . . . 67,625,000 1,603,043
------------ ---------
Unnamed holders of Notes or any future
transferees, pledgees, donees or
successors of or from any such
unnamed holder(14) 47,375,000 1,123,029(15)
TOTAL . . . . . . . . . . . . $115,000,000 2,726,072
============ =========
</TABLE>
The preceding table has been prepared based upon information furnished
to the Company by the Depository Trust Company ("DTC") and by or on behalf of
the Selling Holders. Additional information concerning ownership of the
Securities offered hereby rests with certain holders of the Securities who are
not named in the preceding table, with whom the Company believes it has no
affiliation and from whom the Company received no response to its request for
such information.
In view of the fact that Selling Holders may offer all or a portion of
the Notes or shares of Common Stock held by them pursuant to the offering
contemplated by this Prospectus, and because this offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of Notes or the number of shares of Common Stock that will be held by the
Selling Holders after completion of the offering made hereby.
Information concerning the Selling Holders may change from time to time
and any such changed information will, if and when necessary, be set forth in
supplements to this Prospectus. In addition, the per share conversion price, and
therefor the number of shares issuable upon conversion of the Notes, is subject
to adjustment under certain circumstances. Accordingly, the aggregate principal
amount of Notes and the number of shares of Common Stock issuable upon
conversion thereof and offered hereby are subject to adjustment in certain
circumstances and may increase or decrease. See "Description of the Notes --
Conversion Rights". As of the date of this Prospectus, the aggregate principal
amount of Notes outstanding is $115,000,000.
DESCRIPTION OF THE NOTES
The following description sets forth certain terms and provisions of the
Notes. The Notes were issued under an Indenture entered into by the Company and
the Trustee and dated June 15, 1996, prior to the issuance of any such Notes.
The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). The Notes are subject to all such terms,
and prospective purchasers of the Notes are referred to the Indenture and the
Trust Indenture Act for a statement of those terms. The statements under this
caption relating to the Notes are summaries and do not purport to be complete.
Such summaries
- ------------
(13) Unless otherwise noted, the nature of beneficial ownership is
sole voting and/or investment power. Common Stock ownership assumes as the
conversion price, the initial conversion price of $42.185 per share of Common
Stock (equivalent to a conversion rate of approximately 23.7051 shares per $1000
principal amount of Notes), and a cash payment in lieu of any fractional share
interest. Unless otherwise noted, no Selling Holder reported owning any shares
of Common Stock other than those into which the Notes were convertible.
(14) No such holder may offer Securities pursuant to the Registration
Statement of which this Prospectus forms a part until such holder is included as
a Selling Holder in a supplement to this Prospectus in accordance with the
Registration Rights Agreement.
(15) Assumes that the unnamed holders of Notes or any future
transferees, pledgees, donees or successors of or from any such unnamed holder
does or do not beneficially own any Common Stock other than Common Stock
issuable upon conversion of the Notes at the initial conversion rate set forth
above.
13
<PAGE>
use certain terms that are defined in the Indenture and are qualified in their
entirety by express reference to the Indenture. Copies of the Indenture in
substantially the form in which it was executed, are available from the Company
upon request. The article and section references below are to articles and
sections of the Indenture.
GENERAL
The Notes are unsecured, subordinated obligations of the Company, are
limited in aggregate principal amount to $115,000,000, and will mature on June
15, 2006, unless previously converted or redeemed. (Section 301) The Notes bear
interest at the rate of 5 1/2% per annum, payable semiannually in arrears on
June 15 and December 15 of each year (an "Interest Payment Date"), commencing on
December 15, 1996. (Sections 301 and 307).
The Notes are convertible into Common Stock initially at the conversion
price of $42.185 per share (equivalent to a conversion rate of 23.7051 share per
$1,000 principal amount of Notes), subject to adjustment upon the occurrence of
certain events described under "--Conversion Rights", at any time prior to the
close of business on the maturity date, unless previously redeemed or
repurchased. (Section 1301).
The Notes are redeemable at the option of the Company, in whole or in
part, on or after June 15, 1999, at the redemption prices set forth below under
"-- Redemption at Option of Company", plus accrued interest to the redemption
date. (Section 203).
CONVERSION RIGHTS
The Holder of any Note has the right, at the Holder's option, to convert
the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into shares of Common Stock at any time prior to the close
of business on the maturity date initially at the conversion price of $42.185
per share of Common Stock (subject to adjustments as described below), except
that if a Note is called for redemption, the right to convert such called Note
will terminate at the close of business on the Business Day (as such term is
defined in the Indenture) immediately preceding the redemption date. No payment
of interest and no adjustment in respect of dividends will be made upon the
conversion of any Note, and the Holder will lose any right to payment of
interest on the Notes surrendered for conversion; provided, however, that upon a
call for redemption as described herein by the Company, accrued and unpaid
interest to the redemption date shall be payable with respect to Notes that are
converted after a notice of redemption has been mailed and prior to the
redemption date. Notes surrendered for conversion during the period from
the regular record date for an interest payment to the corresponding interest
payment date (except Notes called for redemption as described herein) must be
accompanied by payment of an amount equal to the interest thereon which the
Holder is to receive on such interest payment date. No fractional shares will be
issued upon conversion but, in lieu thereof, an appropriate amount will be paid
in cash by the Company based on the reported last sale price for the shares of
Common Stock on the day of conversion. (Sections 1301, 1303 and 1305)
The conversion price is subject to adjustment in certain events,
including: the issuance of stock as a dividend on the Common Stock; subdivisions
or combinations of the Common Stock; the issuance to all holders of Common Stock
of certain rights or warrants (expiring within 45 days after the record date for
determining stockholders entitled to receive them) to subscribe for or purchase
Common Stock at a price less than the current market price; or the distribution
to substantially all Holders of Common Stock of evidences of indebtedness of the
Company, cash (excluding quarterly cash dividends paid or to be paid on a
regular basis), other assets or rights or warrants to subscribe for or purchase
any securities (other than those referred to herein). No adjustment of the
conversion price is required to be made until cumulative adjustments amount to
1% or more of the then current conversion price; however, any adjustment not
made will be carried forward. (Section 1304)
The Company from time to time may decrease the conversion price by any
amount for any period of at least 20 days, in which case the Company shall give
at least 15 days notice to the Holders of the Notes of such decrease. The
Company may also, at its option, make such decreases in the conversion rate as
the Board of Directors of the Company deems advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. (Section 1304)
In case of any reclassification of the Common Stock, any consolidation
of the Company with, or merger of the Company into, any other person, any merger
of any person into the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), any sale or other disposition of the assets of the Company
substantially as an entirety or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or other property, then provision
shall be made such that the Holder of Notes
14
<PAGE>
then outstanding shall have the right thereafter, during the period such Notes
shall be convertible, to convert such Notes only into the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, disposition or share exchange by a holder of the
number of shares of Common Stock into which such Notes might have been converted
immediately prior to such reclassification, consolidation, merger, sale,
disposition or share exchange. (Section 1306)
SUBORDINATION
Payment of the principal of and premium, if any, and interest on the
Notes (including any Liquidated Damages (as defined)) is subordinated in right
of payment, as set forth in the Indenture, to the prior payment in full of all
Senior Indebtedness of the Company when due in accordance with the terms
thereof. Senior Indebtedness is defined in the Indenture as the principal of,
premium, if any, and unpaid interest (including, without limitation, any
interest accruing subsequent to the commencement of a case or other proceeding
under any bankruptcy or other similar law with respect to the Company) on, and
other obligations in respect of the following, whether outstanding at the date
of the Indenture or thereafter incurred or created: (a) indebtedness of the
Company for money borrowed (including purchase money obligations) evidenced by
notes or other written obligations, (b) indebtedness of the Company evidenced by
notes, debentures, bonds or other securities issued under the provisions of an
indenture or similar instrument, (c) indebtedness secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
the Company subject to such mortgage, pledge or encumbrance, whether or not
indebtedness secured thereby shall have been assumed by the Company, (d)
obligations of the Company as lessee under capitalized leases and under leases
of property made as part of any sale and leaseback transactions, (e) obligations
of the Company in respect of letters of credit issued for its account and
"swaps" of interest rates, commodity prices or foreign currencies (and other
interest rate, commodity price or foreign currency hedging agreements) to which
the Company is a party, (f) indebtedness of others of any of the kinds described
in the preceding clauses (a) through (e) assumed or guaranteed by the Company
and (g) renewals, extensions and refundings of, and indebtedness and obligations
of a successor person issued in exchange for or in replacement of, indebtedness
or obligations of the kinds described in the preceding clauses (a) through (f);
provided, however, that the following will not constitute Senior Indebtedness:
(i) any indebtedness or obligation which by its terms refers explicitly to the
Notes and states that such indebtedness or obligation shall not be senior in
right of payment thereto, (ii) any indebtedness or obligation of the Company in
respect of the Notes and (iii) any indebtedness or obligation of the Company to
a subsidiary. (Sections 101 and 1401) Notwithstanding the foregoing, all
indebtedness and obligations of the Company in respect of the 5 1/2% Convertible
Subordinated Notes, due 2004 (the "5 1/2% Notes") shall rank pari passu with the
Notes and shall not constitute Senior Indebtedness under the Indenture.
Further, the Notes are effectively subordinated to claims of creditors
(other than the Company) of the Company's subsidiaries, including trade
creditors, secured creditors, taxing authorities, creditors holding guarantees,
and tort claimants. See "Risk Factors -- Subordination of Notes; Leverage and
Debt Service". There are no restrictions on the incurrence of indebtedness,
including Senior Indebtedness, or other liabilities by the Company or its
subsidiaries in the Indenture.
By reason of such subordination, in the event of dissolution,
insolvency, bankruptcy or other similar proceeding, Holders of the Notes may
recover less, ratably, than holders of Senior Indebtedness and other general
creditors of the Company, and, upon any distribution of assets, the Holders of
Notes will be required to pay over their share of such distribution to the
holders of Senior Indebtedness until such Senior Indebtedness is paid in full.
In addition, such subordination may affect the Company's obligation to make
principal and interest payments with respect to the Notes if any Notes are
declared due and payable prior to their stated maturity, or in the event of any
default in the payment of principal of or premium, if any, or interest on any
Senior Indebtedness, or in the payment of any commitment or other fees in
respect thereof, or in the event of any default with respect to Senior
Indebtedness that would permit acceleration of the maturity thereof, or in the
event a judicial proceeding is pending with respect to any such Senior
Indebtedness default. (Sections 1402, 1403 and 1404)
15
<PAGE>
REDEMPTION AT OPTION OF COMPANY
The Notes are not redeemable at the option of the Company prior to June
15, 1999. On and after June 15, 1999, the Notes are redeemable at the option of
the Company, in whole or in part, at any time during the 12-month periods
beginning June 15 of the years indicated at the following Redemption Prices
(expressed as percentages of the principal amount):
YEAR REDEMPTION PRICE
---- ----------------
1999 103.850
2000 103.300
2001 102.750
2002 102.200
2003 101.650
2004 101.100
2005 100.550
together in each case with accrued and unpaid interest to the date fixed for
redemption (subject to the right of Holders of record on the regular record date
to receive interest due on an interest payment date). (Sections 203, 1101 and
1108)
Notes in any denomination equal to or larger than $1,000 may be redeemed
in whole or in part in multiples of $1,000. On and after the redemption date,
interest will cease to accrue on Notes or portions thereof called for
redemption. (Sections 1104 and 1107)
Accrued and unpaid interest to the redemption date shall be payable with
respect to Notes that are converted after a notice of redemption has been mailed
and prior to the redemption date. (Section 1303)
Notice of redemption will be mailed at least 30 but not more than 60
days prior to the redemption date to each Holder of Notes to be redeemed at the
address appearing in the security register maintained by the Company. If less
than all the outstanding Notes are to be redeemed, the Trustee will select the
Notes (or a portion thereof equal to $1,000 or any integral multiple thereof) to
be redeemed by such method as the Trustee shall deem fair and appropriate.
(Sections 1104 and 1105)
PAYMENT AND CONVERSION
The principal of Notes will be payable in dollars, against surrender
thereof to the Company at the designated office or agency of the Company in New
York, New York, by dollar check drawn on, or by transfer to a dollar account
(such transfer to be made only to Holders of an aggregate principal amount of
Notes in excess of $2,000,000) maintained by the Holder with, a bank in New York
City. Payment of any installment of interest on Notes will be made to the person
in whose name such Notes (or any predecessor Note) is registered at the close of
business on the June 1 or the December 1 (whether or not a Business Day) next
preceding the relevant Interest Payment Date (a "Regular Record Date"). Payments
of such interest will be made by a dollar check drawn on a bank in New York City
mailed to the Holder at such Holder's registered address or, upon application by
the Holder thereof to the Trustee not later than the applicable Regular Record
Date, by transfer to a dollar account (such transfer to be made only to Holders
of an aggregate principal amount of Notes in excess of U.S.$2,000,000)
maintained by the Holder with a bank in New York City. No transfer to a dollar
account will be made unless the Trustee has received written wire instructions
not less than 15 days prior to the relevant payment date.
Payments in respect of the principal of (and premium, if any) and
interest on any Note registered in the name of DTC or its nominee will be
payable to DTC or its nominee in its capacity as the registered Holder under the
Indenture. Under the terms of the Indenture, the Company and the Trustee will
treat the persons in whose names the Notes are registered as the owners thereof
for the purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Company, the Trustee nor any agent of the
Company or the Trustee has or will have any responsibility or liability for (i)
any aspect of DTC's records or any participant's or indirect participant's
records relating to or payments made on account of beneficial ownership
interests in the Notes held in DTC's name, or for maintaining, supervising or
reviewing any of DTC's records or any DTC participant's or indirect
participant's records relating to the beneficial ownership interests in such
Notes, or (ii) any other matter relating to the actions and practices of DTC or
any of its participants or indirect participants.
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Any payment on the Notes due on any day which is not a Business Day need
not be made on such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on such due date, and no interest
shall accrue on such payment for the period from and after such date. "Business
Day", when used with respect to any place of payment, place of conversion or any
other place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York, Hartford, Connecticut or Houston, Texas, are authorized or obligated by
law or executive order to close. (Sections 101 and 202).
Notes may be surrendered for conversion at the designated office or
agency of the Company in New York, New York. Notes surrendered for conversion
must be accompanied by appropriate notices and any payments in respect of
interest or taxes, as applicable, as described above under "-- Conversion
Rights".
The Company has initially appointed the Trustee as paying agent and
conversion agent. The Company may at any time terminate the appointment of any
paying agent or conversion agent and appoint additional or other paying agents
and conversion agents, provided that until the Notes have been delivered to the
Trustee for cancellation, or moneys sufficient to pay the principal of, premium,
if any, and interest on the Notes have been made available for payment and
either paid or returned to the Company as provided in the Indenture, it will
maintain an office or agency in New York, New York for surrender of Notes for
payment and conversion. Notice of any such termination or appointment and of any
change in the office through which any paying agent or conversion agent will act
will be given in accordance with "-- Notices" below.
CERTAIN RIGHTS TO REQUIRE REPURCHASE OF NOTES
In the event of any Change in Control (as hereafter defined) of the
Company which constitutes a Repurchase Event (as hereafter defined) occurring
after the initial date of issuance of the Notes, each Holder of Notes will have
the right, at the Holder's option, to require the Company to repurchase all or
any part of the Holder's Notes on a date (the "Repurchase Date") selected by the
Company that is not more than 75 days after the date the Company gives notice of
the Repurchase Event as described below at a price (the "Repurchase Price")
equal to 100% of the principal amount thereof, together with accrued and unpaid
interest to the Repurchase Date. (Section 1201)
The Company may, at its option, in lieu of paying the Repurchase Price
in cash, pay the Repurchase Price in Common Stock valued at 95% of the average
of the closing sales prices of the Common Stock for the five trading days
immediately preceding the second day prior to the Repurchase Date; provided that
payment may not be made in Common Stock unless the Company satisfies certain
conditions with respect to such payment prior to the Repurchase Date as provided
in the Indenture. (Sections 1201 and 1202)
On or before the 15th day after the occurrence of a Repurchase Event,
the Company is obligated to mail to all Holders of Notes a notice (a "Company
Notice") including the occurrence of such Repurchase Event, the Repurchase Date,
the date by which the repurchase right must be exercised, the Repurchase Price,
whether the Repurchase Price will be paid in cash or by delivery of shares of
Common Stock and the procedures which the Holder must follow to exercise this
right. To exercise the Repurchase Right, the Holder of Notes must deliver, on or
before the close of business on the Business Day next preceding the Repurchase
Date, written notice to the Company (or an agent designated by the Company for
such purpose) and to the Trustee of the Holder's intent to exercise such rights,
together with the Notes with respect to which the right is being exercised. Such
written notice will be irrevocable. (Section 1202)
A "Change in Control" shall occur when: (i) the Company's assets are
sold or otherwise disposed of substantially as an entirety to any person or
related group of persons in any one transaction or a series of related
transactions; (ii) there shall be consummated any consolidation or merger of the
Company (A) in which the Company is not the continuing or surviving corporation
(other than a consolidation or merger with a wholly owned subsidiary of the
Company in which all shares of Common Stock outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for the same number of
shares of common stock of such subsidiary) or (B) pursuant to which the Common
Stock would be converted into cash, securities or other property, in each case,
other than a consolidation or merger of the Company in which the holders of the
Common Stock immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the common stock of the continuing or
surviving corporation immediately after such consolidation or merger; or (iii)
any person, or any persons acting together which would constitute a "group" for
purposes of Section 13(d) of the Exchange Act (other than the Company, any
Subsidiary, any employee stock purchase plan, stock option plan or other stock
incentive plan or program, retirement plan or automatic dividend reinvestment
plan or any substantially similar plan of the Company or any Subsidiary or any
person holding securities of the Company for or pursuant to the terms of any
such employee benefit plan), together with any affiliates thereof, shall acquire
beneficial ownership (as defined in Rule 13d-3
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under the Exchange Act) of at least 50% of the total voting power of all classes
of capital stock of the Company entitled to vote generally in the election of
directors of the Company. (Section 1206)
A Change in Control as described above shall constitute a Repurchase
Event unless (i) the Current Market Price of the Common Stock on the date the
Change in Control shall have occurred is at least equal to 105% of the
conversion price of the Notes in effect immediately preceding the time of such
Change in Control, or (ii) all of the consideration (excluding cash payments for
fractional shares) in the transaction giving rise to such Change in Control to
the holders of Common Stock consists of shares of common stock that are, or
immediately upon issuance will be, listed on a national securities exchange or
quoted on the NASDAQ National Market, and as a result of such transaction the
Notes become convertible solely into such common stock, or (iii) the
consideration in the transaction giving rise to such Change in Control to the
holders of Common Stock consists of cash, securities that are, or immediately
upon issuance will be, listed on a national securities exchange or quoted on the
NASDAQ National Market, or a combination of cash and such securities and the
aggregate fair market value of such consideration (which, in the case of such
securities, shall be equal to the average of the daily closing prices of such
securities during the ten consecutive trading days commencing with the sixth
trading day following consummation of such transaction) is at least 105% of the
conversion price of the Notes in effect on the date immediately preceding the
closing date of such transaction. (Section 1206)
The right to require the Company to repurchase Notes as a result of the
occurrence of a Repurchase Event could create an event of default under Senior
Indebtedness of the Company, as a result of which any repurchase could, absent a
waiver, be blocked by the subordination provisions of the Notes. See "--
Subordination." Failure by the Company to repurchase the Notes when required
would result in an Event of Default (as herein defined) with respect to the
Notes whether or not such repurchase were permitted by the subordination
provisions. See "-- Defaults and Remedies." The Company's ability to pay cash to
the Holders of Notes upon a repurchase might be limited by certain financial
covenants contained in the Company's Senior Indebtedness. In addition, there can
be no assurance that the Company would have sufficient financial resources at
the time of any such required purchase to enable it to purchase the Notes.
(Sections 501 and 1404)
In the event a Repurchase Event occurs and the Holders exercise their
rights to require the Company to repurchase Notes, the Company intends to comply
with applicable tender offer rules under the Exchange Act, including Rules 13e-4
and 14e-1, as then in effect, with respect to any such purchase.
The foregoing provisions would not necessarily afford Holders of Notes
protection in the event of highly leveraged or other transactions involving the
Company that may adversely affect Holders. In addition, the foregoing provisions
may discourage open market purchases of the Common Stock or a non-negotiated
tender or exchange offer for such stock and, accordingly, may limit a
shareholder's ability to realize a premium over the market price of the Common
Stock in connection with any such transaction.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Notes, may
consolidate or merge with or into any person, or convey, transfer, lease or
otherwise dispose of its assets substantially as an entirety to any person, and
any person may consolidate or merge with, or into, or transfer or lease its
assets substantially as an entirety to, the Company, provided that (i) the
person (if other than the Company) formed by such consolidation or into which
the Company is merged or which acquires or leases the assets of the Company
substantially as an entirety is organized and existing under the laws of the
United States, any state thereof or the District of Columbia, and assumes the
Company's obligations on the Notes and under the Indenture, (ii) after giving
effect to such transaction, no Event of Default and no event that, after notice
or lapse of time or both, would become an Event of Default, shall have happened
and be continuing and (iii) certain procedural conditions are met. (Article
Eight)
DEFAULTS AND REMEDIES
The Indenture defines the following as Events of Default: default for 30
days in payment of interest on the Notes (including any Liquidated Damages);
default in payment of principal of or premium, if any, on the Notes when due,
whether or not such payment is prohibited by the subordination provisions of the
Indenture; default for more than 10 days after a Repurchase Date in payment of
the Repurchase Price; failure by the Company for 60 days after written notice to
it to comply with any of its other covenants in the Indenture; default by the
Company under any instrument or other evidence of indebtedness of the Company
for money borrowed, or under any guarantee of payment by the Company for money
borrowed, in an amount in excess of 5% of Consolidated Net Tangible Assets (as
defined below), unless such default has been cured
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or waived; certain events of bankruptcy, insolvency or reorganization relative
to the Company; and failure by the Company to give a Company Notice when
required after the occurrence of a Repurchase Event. (Section 501)
"Consolidated Net Tangible Assets" means the total amount of assets of
the Company and its Subsidiaries (less depreciation, depletion, valuation and
other reserves) after deducting (i) all current liabilities, (ii) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles and (iii) minority interests in the equity of
Subsidiaries. (Section 101)
If an Event of Default occurs and is continuing, the Trustee or Holders
of at least 25% in aggregate principal amount of the Notes outstanding may
declare the principal of the Notes and accrued interest thereon to be due and
payable immediately, but under certain conditions, such acceleration may be
rescinded by the Holders of a majority in principal amount of the Notes then
outstanding. (Sections 502 and 513)
Holders of Notes may not enforce the Indenture except as provided in
such Indenture and except that, subject to any applicable subordination
provisions, nothing shall prevent the Holders of Notes from enforcing payment of
the principal of or premium, if any, or interest on, their Notes. (Section 508)
The Trustee may refuse to enforce the Indenture unless it receives reasonable
security or indemnity.
The Holders of a majority in aggregate principal amount of all
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy or power available to the
Trustee under the Indenture, provided that such direction does not conflict with
any rule of law or with the Indenture and would not involve the Trustee in
personal liability or be unduly prejudicial to Holders of Notes not joining in
such action (as determined by the Trustee in good faith). (Sections 507, 508 and
512)
In case a default or an Event of Default under the Indenture shall occur
and be continuing and if it is known to the Trustee, the Trustee shall mail to
each Holder of Notes notice of the default or Event of Default within 90 days
after it occurs. Except in the case of a default or an Event of Default in
payment of the principal of, premium, if any, or interest on any Note, the
Trustee may withhold the notice if and so long as the Trustee in good faith
determines that withholding the notice is in the interest of Holders of Notes.
Subject to such provisions, when the Trustee incurs expenses or renders services
after an Event of Default, the expenses and the compensation for the services
are intended to constitute expenses of administration under any bankruptcy law.
(Sections 602, 603 and 607)
The Company will annually furnish the Trustee with an officers'
certificate with respect to compliance with the terms of the Indenture. (Section
1005)
MODIFICATION
Modification and amendment of the Indenture may be effected by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes then outstanding under the Indenture,
provided that no such modification or amendment may, without the consent of each
Holder affected thereby, (i) change the fixed maturity of or place for payment
of principal, premium if any, or interest on any Note, (ii) reduce the principal
of or rate of interest thereon, or the premium, if any, payable upon the
redemption of, or change the obligation of the Company to pay any Liquidated
Damages with respect to, any Note, (iii) make any Note payable in a currency
other than dollars, (iv) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Note, (v) make any change that
adversely affects the right to convert any Note, (vi) modify the subordination
provisions of the Notes in a manner adverse to the Holders of the Notes, or
(vii) reduce the amount of Notes whose Holders must consent to a modification or
amendment or waive compliance with certain provisions of the Indenture. The
Indenture also contains provisions permitting the Company and the Trustee to
effect certain minor modifications to the Indenture not adversely affecting the
rights of Holders of Notes in any material respect. (Sections 901 and 902)
TRANSFER, EXCHANGE AND WITHDRAWAL
At the option of the Holder upon request confirmed in writing, and
subject to the terms of the Indenture, any Registered Note is exchangeable at
any time into an equal aggregate principal amount of Registered Notes of
different authorized denominations provided that any applicable transfer
restrictions are satisfied. (Section 305)
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Registered Notes may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
any transfer agent or at the office of the security registrar, without service
charge but, in the case of a transfer, upon payment of any taxes and other
governmental charges as described in the Indenture. Any registration of transfer
or exchange will be effected upon the transfer agent or the security registrar,
as the case may be, being satisfied with the documents of title and identity of
the person making the request, and subject to such reasonable regulations as the
Company may from time to time agree upon with the transfer agents and the
security registrar, all as described in the Indenture. Subject to the applicable
transfer restrictions, Registered Notes may be transferred in whole or in part
in authorized denominations. (Section 305)
The Company has initially appointed the Trustee as security registrar
and transfer agent, acting through its Corporate Trust Office in Hartford,
Connecticut. The Company reserves the right to vary or terminate the appointment
of the security registrar or of any transfer agent or to appoint additional or
other transfer agents or to approve any change in the office through which any
security registrar or any transfer agent acts. (Section 305)
TITLE
The Company, the Trustee, any Paying Agent and any Conversion Agent may
treat the registered owner (as reflected in the Security Register) of any Note
as the absolute owner thereof (whether or not such Note shall be overdue) for
the purpose of making payment and for all other purposes. (Section 308)
NOTICES
Notice to Holders of the Notes will be given by mail to the addresses of
such Holders as they appear in the Security Register. Such notices will be
deemed to have been given on the date of such mailing. (Section 106)
Notice of a redemption of Notes will be given at least once not less
than 30 nor more than 60 days prior to the redemption date (which notice shall
be irrevocable) and will specify the redemption date. (Sections 1105 and 1107)
REPLACEMENT OF NOTES
Notes that become mutilated, destroyed, stolen or lost will be replaced
by the Company at the expense of the Holder upon delivery to the Trustee of the
mutilated Notes or evidence of the loss, theft or destruction thereof
satisfactory to the Company and the Trustee. In the case of a lost, stolen or
destroyed Note, indemnity satisfactory to the Trustee and the Company may be
required at the expense of the Holder of such Note before a replacement Note
will be issued.
(Section 306)
GOVERNING LAW
The Notes and the Indenture provide that they are governed by the laws
of the State of New York. (Section 112)
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, 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. The Trustee will be permitted to engage in other
transactions with the Company; provided, however, if it acquires any conflicting
interest and there exists a default with respect to the Notes, it must eliminate
such conflict or resign. (Sections 608 and 613)
Fleet National Bank is also trustee under the Company's indenture under
which the 5 1/2% Notes are outstanding.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, par value $1.00 per share, of which 33,259,427 shares
were issued and outstanding as of September 24, 1996; and 2,000,000 shares of
preferred stock, par value $1.00 per share, of which no shares are issued. The
following summary description of the capital
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stock of the Company is qualified in its entirety be reference to the Company's
Restated Certificate of Incorporation and Bylaws, copies of which are filed as
exhibits to documents filed with the Commission and which are available upon
request.
COMMON STOCK
Subject to any preferential rights of any outstanding shares of
Preferred Stock, the holders of the Common Stock are entitled to such dividends
as may be declared from time to time in the discretion of the Board of Directors
out of funds legally available therefor. Holders of Common Stock are entitled to
share ratably in the net assets of the Company upon liquidation after payment or
provision for all liabilities and any preferential liquidation rights of any
Preferred Stock then outstanding. The rights of holders of Common Stock are
subject to the rights of holders of any Preferred Stock which may be issued in
the future. The holders of Common Stock have no preemptive rights to purchase
additional shares of capital stock of the Company. Shares of Common Stock are
not subject to any redemption or sinking fund provisions and are not convertible
into any other securities of the Company. All outstanding shares of Common Stock
are, and all shares of Common Stock issuable upon conversion of the Notes will
be when so issued, validly issued, fully paid and nonassessable.
Each share of Common Stock entitles the holder thereof to one vote at
all meetings of the stockholders of the Company. The affirmative vote of the
holders of at least 80% of the outstanding shares of Common Stock is required
(i) to approve a merger or similar reorganization or certain other transactions
involving the Company if the other party to such transaction already
beneficially owns 5% or more of the outstanding Common Stock and the Board of
Directors of the Company has not approved the transaction prior to the time such
other party becomes a 5% beneficial owner; (ii) to approve an amendment to the
Company's Restated Certificate of Incorporation to alter or change the provision
establishing a "classified" Board of Directors of not less than three nor more
than thirteen members, elected one-third annually; and (iii) to amend the
foregoing and certain other provisions of the Restated Certificate of
Incorporation.
The Company's Board of Directors is divided into three classes having
staggered terms, with approximately one-third of the directors being elected
annually for a term of three years. The Company's capital stock has
noncumulative voting rights, meaning that the holders of more than 50% of the
voting power of the share of voting for the election of directors can elect 100%
of the directors if they choose to do so. In such event, the holders of the
remaining less- than-50% of the voting power of the shares voting for the
election of directors will not be able to elect any directors.
PREFERRED STOCK
The Board of Directors of the Company is empowered, without approval of
the stockholders, to cause shares of Preferred Stock to be issued in one or more
series, with the number of shares of each series and the rights, preferences and
limitations of each series to be determined by it. Among the specific matters
that may be determined by the Board of Directors are the description and number
of shares to constitute each series, the annual dividend rate, whether such
dividends shall be cumulative, the time and price of redemption and the
liquidation preference applicable to the series, whether the series will be
subject to the operation of a "sinking" or "purchase" fund and, if so, the terms
and provisions thereof, whether the shares of such series shall be convertible
into shares of any other class or classes and the terms and provisions of such
conversion rights, and the voting powers, if any, of the shares of such series.
The Board of Directors may change the designation, rights, preferences,
descriptions and terms of, and the number of shares in, any series of which no
shares have theretofore been issued.
The issuance of one or more series of Preferred Stock could adversely
affect the voting power of the holders of the Common Stock and could have the
effect of discouraging or making more difficult any attempt by a person or group
to obtain control of the Company.
The Board has reserved for issuance pursuant to the Stockholder Rights
Plan described below, a total of 433,334 shares of Series A Junior Participating
Preferred Stock. No shares of Series A Junior Participating Preferred Stock have
been issued by the Company at the date hereof.
LISTINGS
The Common Stock is traded on the New York Stock Exchange and the
Pacific Stock Exchange under the symbol "PPP".
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TRANSFER AGENTS AND REGISTRARS
The Transfer Agents and Registrars for the Common Stock are Harris Trust
Company of New York, New York, and KeyCorp Shareholder Services, Inc., Houston,
Texas.
STOCKHOLDER RIGHTS PLAN
The Company has a Stockholder Rights Plan pursuant to which one
preferred share purchase right (a "Right") is attached to each outstanding share
of the Company's Common Stock. The Rights become exercisable under certain
circumstances, including in the event that any person or group (an "Acquiring
Person") becoming the beneficial owner of 20% or more of the Company's
outstanding Common Stock, subject to certain exceptions. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Junior Participating
Preferred Stock, at an exercise price of $80, subject to adjustment under
certain circumstances. Upon the occurrence of certain events specified in the
Stockholder Rights Plan, each holder of a Right (other than the Acquiring
Person) will have the right, upon exercise of such Right, to receive that number
of shares of Common Stock of the Company (or, in certain circumstances, cash,
property or other securities) that, at the time of the transaction, would have a
market value of two times the exercise price of the Right. Rights are redeemable
by action of the Company's Board of Directors for $0.01 per Right at any time
prior to the tenth day after a person becomes an Acquiring Person. The
Stockholder Rights Plan and the Rights expire in April 2004.
DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS
The Company is subject to Section 203 of the Delaware General
Corporation Law (the "DGCL"). In general, Section 203 prevents an interested
stockholder (defined generally as any person owning 15% or more of a Delaware
corporation's outstanding voting stock) from engaging in a business combination
(as defined herein) with a Delaware corporation for a period of three years from
the date such person becomes an interested stockholder, unless (i) before such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination; (ii) upon
consummation of the transaction that resulted in the interested stockholder's
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the corporation and by employee stock plans that do not provide employees
with the rights to determine confidentially whether the shares held subject to
the plan will be tendered in a tender or exchange offer); or (iii) following the
transaction in which such person became an interested stockholder, the business
combination is approved by the board of directors of the corporation and
authorized at a meeting of stockholders by the affirmative vote of the holders
of at least two-thirds of the outstanding voting stock of the corporation not
owned by the interested stockholder. Under Section 203, the restrictions
described above also do not apply to certain business combinations proposed by
an interested stockholder following the announcement or notification of one of
certain extraordinary transactions involving the corporation and a person who
had not been an interested stockholder with the approval of a majority of the
directors who were directors prior to any person becoming an interested
stockholder during the previous three years or who were recommended for election
or elected to succeed such directors by a majority of such directors. By
restricting the ability of the Company to engage in business combinations with
an interested person, the application of Section 203 to the Company may provide
a barrier to hostile or unwanted takeovers.
Pursuant to provisions of the DGCL, the Company has included in its
Restated Certificate of Incorporation a provision that, to the fullest extent
permitted by the DGCL, the Company's directors will not be liable for monetary
damages for breach of their fiduciary duty of care to the Company and its
stockholders. The DGCL provides that directors of a company will not be
personally liable for monetary damages for breach of their fiduciary duties as
directors, except for liability (i) for any breach of their duty of loyalty to
the company 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 (unlawful payments of dividends or unlawful stock
repurchases or redemptions), or (iv) for any transaction from which the director
derived an improper personal benefit. This provision also does not affect a
director's responsibilities under any other laws, such as the federal securities
laws or state or federal environmental laws.
The Company's Bylaws also contain provisions that require the Company to
indemnify its directors, officers, employees or other agents to the fullest
extent permitted by the DGCL, and to advance expenses to its officers and
directors as incurred. In addition, the Company has in place employment
agreements with certain of its officers providing coverage that is substantially
identical to the indemnification provisions in the Bylaws.
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PLAN OF DISTRIBUTION
The Securities covered hereby may be offered and sold from time to time
by the Selling Holders. The Selling Holders will act independently of the
Company in making decisions with respect to the timing, manner and size of each
sale. There can be no assurance that the Selling Holders will sell any or all of
the Notes offered by them hereunder.
Sales of the Securities are, in general, expected to be made at the
market price prevailing at the time of each such sale; however, prices in
negotiated transactions may differ considerably.
Sales of the Notes may be made in the over-the-counter market or
otherwise, at market prices prevailing at the time of sale, at prices relating
to the then prevailing market prices or in negotiated transactions, including
without limitation pursuant to an underwritten offering or pursuant to one or
more of the following methods: (a) purchases by a broker-dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (b)
ordinary brokerage transactions and transactions in which a broker solicits
purchasers; and (c) block trades in which a broker-dealer so engaged will
attempt to sell the Notes as agent but may take a position and resell a portion
of the block as principal to facilitate the transaction.
Sales of the shares of Common Stock issuable upon conversion of the
Notes, when issued upon such conversion, may be made on the New York Stock
Exchange, the Pacific Stock Exchange, in the over-the-counter market or
otherwise, at market prices prevailing at the time of sale, at prices relating
to the then prevailing market prices or in negotiated transactions, including
without limitation pursuant to an underwritten offering or pursuant to one or
more of the following methods: (a) purchases by a broker-dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (b)
ordinary brokerage transactions and transactions in which a broker solicits
purchasers; and (c) block trades in which a broker-dealer so engaged will
attempt to sell the shares as agent but may take a position and resell a portion
of the block as principal to facilitate the transaction.
The Company has been advised that, as of the date hereof, the Selling
Holders have made no arrangement with any broker for the offering or sale of the
Securities. Underwriters, brokers, dealers or agents may participate in such
transactions as agents and may, in such capacity, receive brokerage commissions
from the Selling Holders or purchasers of such securities. Such underwriters,
brokers, dealers or agents may also purchase any of the Securities and resell
such Securities for their own account. The Selling Holders and such
underwriters, brokers, dealers or agents may be considered "underwriters" as
that term is defined by the Securities Act, although the Selling Holders
disclaim such status. Any commissions, discounts or profits received by such
underwriters, brokers, dealers or agents in connection with the foregoing
transactions may be deemed to be underwriting discounts and commissions under
the Securities Act.
To comply with the securities laws of certain jurisdictions, if
applicable, the Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions, the Securities may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or unless an exemption
from such registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securities may be limited in its ability
to engage in market activities with respect to such Securities. In addition and
without limiting the foregoing, each Selling Holder is subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, rules 10b-2, 10b-5, 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of any of the Securities
by the Selling Holders. All of the foregoing may affect the marketability of the
Securities.
The Company may suspend the use of this Prospectus and any supplements
hereto in certain circumstances due to pending corporate developments, public
filings with the Commission or similar events. The Company is obligated in the
event of such suspension to use its reasonable efforts to ensure that the use of
the Prospectus may be resumed as soon as practicable.
The Company has agreed to pay substantially all of the expenses incident
to the registration, offering and sale of the Securities to the public other
than commissions and discounts of agents, dealers or underwriters. The Company
has also agreed to indemnify the Selling Holders against certain liabilities,
including certain liabilities under the Securities Act.
23
<PAGE>
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for
the Company by Gerald A. Morton, Corporate Secretary and Associate General
Counsel of the Company. Mr. Morton indirectly owns approximately 1,400 shares of
Common Stock through the Company's tax advantaged savings plan and options to
purchase an aggregate of 22,000 shares of Common Stock, which are or become
exercisable in periodic installments through August 1, 1999.
EXPERTS
The audited consolidated financial statements of the Company
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said report.
The estimates of oil and gas reserves and discounted present values of
estimated future net revenues incorporated by reference in this Prospectus were
prepared by Ryder Scott and are attached as an exhibit to the Annual Report.
Such information is incorporated by reference herein in reliance upon the
authority of said firm as experts with respect to the matters contained in such
report.
24
<PAGE>
================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE NOTES IN ANY JURISDICTION WHERE, OR TO ANY
INDIVIDUAL WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF.
TABLE OF CONTENTS
PAGE
----
Available Information.................... 2
Incorporation of Certain Documents
by Reference........................... 2
Forward Looking Statements............... 3
Prospectus Summary....................... 4
Risk Factors............................. 6
Ratio of Earnings to Fixed Charges....... 9
The Company ............................. 9
Use of Proceeds.......................... 9
The Selling Holders ..................... 10
Description of the Notes................. 13
Description of Capital Stock............. 20
Plan of Distribution..................... 23
Legal Matters............................ 24
Experts.................................. 24
================================================================================
$115,000,000
[LOGO]
POGO PRODUCING COMPANY
5 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2006
-------------------
PROSPECTUS
-------------------
September 26, 1996
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be incurred in connection with the Offering
described in this Registration Statement are as follows:
Securities and Exchange Commission registration fee ............ $39,656
National Association of Securities Dealers, Inc. filing fee .... 0
Printing and engraving expenses ................................ 1,000
Accounting fees and expenses ................................... 2,000
Legal fees and expenses ........................................ 2,000
Trustee's fees and expenses .................................... 0
Blue Sky fees and expenses ..................................... 0
Rating agency fees ............................................. 0
Miscellaneous .................................................. 40,344
-------
Total ...................................................... $85,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, inter alia,
empowers a Delaware 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 (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of another corporation 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. Similar indemnity is authorized for such persons against expenses
(including attorneys' fees) actually and reasonably incurred in connection with
the defense or settlement of any such threatened, pending or completed action or
suit if such person 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 provided
further that (unless a court of competent jurisdiction otherwise provides) such
person shall not have been adjudged liable to the corporation. Any such
indemnification may be made only as authorized in each specific case upon a
determination by the shareholders or disinterested directors or by independent
legal counsel in a written opinion that indemnification is proper because the
indemnitee has met the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who 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 or enterprise,
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 otherwise have the power to indemnify him under Section 145. The Company
maintains policies insuring its and its subsidiaries' officers and directors
against certain liabilities for actions taken in such capacities, including
liabilities under the Securities Act of 1933, as amended.
The Bylaws of the Registrant contain the following provisions:
ARTICLE VII
INDEMNIFICATION
SECTION 1. RIGHT TO INDEMNIFICATION.
The Corporation shall indemnify and hold harmless, to the fullest extent
permitted by applicable law as it presently exists or may hereafter be amended,
any person who was or is made or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that he,
or a person for whom he is the legal representative, 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,
II - 1
<PAGE>
employee, fiduciary or agent of another corporation or of a partnership, joint
venture, trust, enterprise or non-profit entity including service with respect
to employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Corporation shall indemnify a person in
connection with a proceeding initiated by such person only if the proceeding was
authorized by the Board of Directors of the Corporation.
SECTION 2. PREPAYMENT OF EXPENSES.
The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a director or officer in his capacity as a
director or officer (except with regard to service to an employee benefit plan
or non-profit organizations) in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the director or
officer to repay all amounts advanced if it should be ultimately determined that
the director or officer is not entitled to be indemnified under this Article or
otherwise.
SECTION 3. CLAIMS.
If a claim for indemnification or payment of expenses under this Article
is not paid in full within ninety days after a written claim therefor has been
received by the Corporation the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part, shall be entitled
to be paid the expense of prosecuting such claim. In any such action the
Corporation shall have the burden of proving that the claimant was not entitled
to the requested indemnification or payment of expenses under applicable law.
SECTION 4. NON-EXCLUSIVITY OF RIGHTS.
The rights conferred on any person by this Article shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation, these Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.
SECTION 5. AMENDMENT OR REPEAL.
Any repeal or modification of the foregoing provisions of this Article
VII shall not adversely affect any right or protection hereunder of any person
in respect of any act or omission occurring prior to the time of such repeal or
modification.
The Registrant has placed in effect insurance which purports (a) to
insure it against certain costs of indemnification which may be incurred by it
pursuant to the aforementioned Bylaw provision or otherwise and (b) to insure
the officers and directors of the Company and of specified subsidiaries against
certain liabilities incurred by them in the discharge of their functions as
officers and directors except for liabilities arising from their own
malfeasance.
Reference is made to the Purchase Agreement contained in Exhibit 1
hereof for provisions regarding indemnification under certain circumstances of
the Registrant and its directors, officers and controlling persons.
See "Item 17. Undertakings" for information concerning the position of
the Securities and Exchange Commission regarding indemnification provisions.
ITEM 16. EXHIBITS.
* 4-(a) Indenture dated as of June 15, 1996 between the Company and Fleet
National Bank, as Trustee (Form 10-Q, June 30, 1996, SEC File No.
0-5468, Exhibit 4(f)).
* 4-(b) Form of Note, included in Exhibit 4(a).
** 4-(c) Registration Rights Agreement, dated as of June 18, 1996 by and among
the Company, Goldman, Sachs & Co., Merrill Lynch & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
** 4-(d) Purchase Agreement dated as of June 11, 1996 by and among the Company,
Goldman, Sachs & Co., Merrill Lynch & Co. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
** 5 Opinion of Gerald A. Morton
**12 Statement Re Computation of Ratio of Earnings to Fixed Charges
**23-(a) Consent of Arthur Andersen LLP
**23-(b) Consent of Ryder Scott Company Petroleum Engineers.
II - 2
<PAGE>
**23-(c) Consent of Gerald A. Morton (contained in his opinion filed as Exhibit
5).
**24 Powers of Attorney.
**25 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Fleet National Bank.
- -------------
* Incorporated by reference.
** Previously Filed.
ITEM 17. UNDERTAKINGS.
The undersigned 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, as amended (the "Securities Act"), (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; 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) ad (ii) of this paragraph do not apply if the information
required to be included in a post-effective amendment by those clauses
is contained in the periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement;
(2) That, for purpose of determining liability under the
Securities Act, 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; and
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934, as amended, that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant 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 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes 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 in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act.
II - 3
<PAGE>
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 the 26th day of
September, 1996.
POGO PRODUCING COMPANY
(Registrant)
By: PAUL G. VAN WAGENEN
Paul G. Van Wagenen
(Chairman of the Board,
President and Chief
Executive Officer)
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.
SIGNATURE TITLE DATE
--------- ----- ----
Chairman of the Board, President
and Chief Executive Officer
PAUL G. VAN WAGENEN (Principal Executive Officer
Paul G. Van Wagenen and Director) September 26, 1996
John W. Elsenhans, Vice
President and Treasurer
JOHN W. ELSENHANS (Principal Financial Officer) September 26, 1996
John W. Elsenhans
THOMAS E. HART Vice President and Controller
Thomas E. Hart (Principal Accounting Officer) September 26, 1996
TOBIN ARMSTRONG* Director
Tobin Armstrong
JACK S. BLANTON* Director
Jack S. Blanton
W. M. BRUMLEY, JR.* Director
W. M. Brumley, Jr.
II - 4
<PAGE>
JOHN B. CARTER, JR.* Director
John B. Carter, Jr.
WILLIAM L. FISHER* Director
William L. Fisher*
WILLIAM E. GIPSON* Director
William E. Gipson
GERRIT W. GONG* Director
Gerrit W. Gong
J. STUART HUNT* Director
J. Stuart Hunt
FREDERICK A. KLINGENSTEIN* Director
Frederick A. Klingenstein
NICHOLAS R. PETRY* Director
Nicholas R. Petry
JACK A. VICKERS* Director
Jack A. Vickers
*By THOMAS E. HART
(Thomas E. Hart, Attorney-in-Fact)
II - 5
