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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1998
REGISTRATION NUMBER 333-45207
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SECURITIES AND EXCHANGE COMMISSION
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EVI WEATHERFORD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 04-2515019
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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5 POST OAK PARK, SUITE 1760
HOUSTON, TEXAS 77027-3415
(713) 297-8400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
BERNARD J. DUROC-DANNER
EVI WEATHERFORD, INC.
5 POST OAK PARK, SUITE 1760
HOUSTON, TEXAS 77027-3415
(713) 297-8400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
Copies to:
CURTIS W. HUFF
EVI WEATHERFORD, INC.
5 POST OAK PARK, SUITE 1760
HOUSTON, TEXAS 77027-3415
(713) 297-8400
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 same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
EVI WEATHERFORD, INC.
8,050,000 5% CONVERTIBLE SUBORDINATED PREFERRED EQUIVALENT DEBENTURES DUE 2027
($50 PRINCIPAL AMOUNT PER DEBENTURE)
(INTEREST PAYABLE FEBRUARY 1, MAY 1, AUGUST 1 AND NOVEMBER 1)
5,031,250 SHARES OF COMMON STOCK
---------------------
This Prospectus relates to (i) the offering of 8,050,000 5% Convertible
Subordinated Preferred Equivalent Debentures due 2027 (the "Debentures"), having
a $50 principal amount per Debenture, of EVI Weatherford, Inc., a Delaware
corporation (the "Company"), and (ii) 5,031,250 shares of the Company's common
stock, $1.00 par value (the "Common Stock"), which are initially issuable upon
conversion of the Debentures plus such additional indeterminate number of shares
of Common Stock as may become issuable upon conversion of the Debentures as a
result of adjustments to the conversion price (the "Shares"). The Debentures and
the Shares that are being registered hereby are to be offered for the account of
the holders thereof (the "Selling Securityholders"). The Debentures were
initially acquired from the Company by Morgan Stanley & Co. Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation, Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Prudential Securities Incorporated and
Schroder & Co. Inc. (the "Initial Purchasers") in November 1997 in connection
with a private offering. See "Description of the Debentures".
The Debentures are convertible into Common Stock of the Company at any time
after February 1, 1998, and prior to maturity, unless previously redeemed, at a
conversion price of $80 per share, subject to adjustment in certain events. The
Common Stock is traded on the New York Stock Exchange (the "NYSE") under the
symbol "EVI". On June 23, 1998, the last reported sales price for the Common
Stock as reported on the NYSE was $38 11/16 per share.
So long as the Company is not in default in the payment of interest on the
Debentures, the Company has the right to defer payments of interest on the
Debentures by extending the interest payment period on the Debentures at any
time for up to 20 consecutive quarters (each, an "Extension Period"). If
interest payments are so deferred, interest will continue to accumulate with
interest thereon (to the extent permitted by applicable law) at the interest
rate, compounded quarterly. During any Extension Period, holders of Debentures
will be required to include deferred interest income in their gross income for
United States federal income tax purposes in advance of receipt of the cash
payments with respect to such deferred interest payments. There could be
multiple Extension Periods of varying lengths throughout the term of the
Debentures. See "Risk Factors", "Description of Debentures -- Option to Extend
Interest Payment Period" and "Certain Federal Income Tax
Considerations -- Potential Extension of Interest Payment Period and Original
Issue Discount".
The Debentures are not redeemable by the Company prior to November 4, 2000.
Subject to the foregoing, the Debentures are redeemable on at least 30 days'
prior notice at the option of the Company, in whole or in part, at any time, at
the redemption prices set forth in this Prospectus, in each case together with
accrued interest. See "Description of Debentures -- Optional Redemption by the
Company".
The Debentures are unsecured obligations of the Company and are subordinated
to the extent provided in the Indenture (as defined herein) to the payment in
full of all existing and future Senior Indebtedness (as defined herein). See
"Risk Factors" and "Description of Debentures -- Subordination of Debentures".
The Debentures are eligible for trading in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") Market. The Debentures and the
Shares are being registered to permit public secondary trading of the Debentures
and, upon conversion, the underlying Common Stock, by the holders thereof from
time to time after the date of this Prospectus.
The Company will not receive any of the proceeds from sales of Debentures or
the Shares by the Selling Securityholders. The Debentures and the Shares may be
offered from time to time by the Selling Securityholders (and their donees and
pledgees) in negotiated transactions or otherwise, at market prices prevailing
at the time of sale or at negotiated prices. See "Plan of Distribution". The
Selling Securityholders may be deemed to be "underwriters" as defined in the
Securities Act of 1933, as amended (the "Securities Act"). If any broker-dealers
are used by the Selling Securityholders, any commissions paid to broker-dealers
and, if broker-dealers purchase any Debentures or Shares as principals, any
profits received by such broker-dealers on the resale of the Debentures or
Shares may be deemed to be underwriting discounts or commissions under the
Securities Act. In addition, any profits realized by the Selling Securityholders
may be deemed to be underwriting commissions.
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DESCRIPTION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
---------------------
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 June , 1998.
<PAGE> 3
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 can be
inspected at the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Regional Offices of the Commission at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York,
New York 10048. Copies of such material can also be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Such
reports, proxy and information statements and other information concerning the
Company can also be inspected and copied at the offices of the NYSE, 20 Broad
Street, New York, New York 10005, on which the Common Stock is listed.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Debentures and Shares offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain items of which are
contained in exhibits to the Registration Statement as permitted by the rules
and regulations of the Commission. For further information with respect to the
Company and the Debentures and the Shares offered hereby, reference is made to
the Registration Statement, including the exhibits thereto, which may be
inspected without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Regional
Offices of the Commission, and copies of which may be obtained from the
Commission at prescribed rates. Statements made in this Prospectus concerning
the contents of any document referred to herein are not necessarily complete.
With respect to each such document filed with the Commission as an exhibit to
the Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference and shall be deemed a part hereof:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997, as amended by Amendment No. 1 and Amendment No. 2 to the
Annual Report on Form 10-K on Forms 10-K/A;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
(c) The Company's Current Report on Form 8-K dated May 1, 1997, as
amended by Amendment No. 1 to the Current Report on Form 8-K on Form 8-K/A
dated January 14, 1998;
(d) The Company's Current Report on Form 8-K dated November 5, 1997,
as amended by Amendment No. 1 to the Current Report on Form 8-K on Form
8-K/A dated March 26, 1998;
(e) The Company's Current Report on Form 8-K dated December 2, 1997,
as amended by Amendment No. 1 to the Current Report on Form 8-K on Form
8-K/A dated February 13, 1998;
(f) The Company's Current Report on Form 8-K dated January 28, 1998;
(g) The Company's Current Report on Form 8-K dated February 3, 1998;
(h) The Company's Current Report on Form 8-K dated February 19, 1998,
as amended by Amendment No. 1 to the Current Report on Form 8-K on Form
8-K/A dated April 21, 1998;
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(i) The Company's Current Report on Form 8-K dated March 5, 1998, as
amended by Amendment No. 1 to the Current Report on Form 8-K on Form 8-K/A
dated March 9, 1998;
(j) The Company's Current Report on Form 8-K dated April 20, 1998;
(k) The Company's Current Report on Form 8-K dated April 22, 1998, as
amended by Amendment No. 1 to the Current Report on Form 8-K on Form 8-K/A
dated April 24, 1998; and
(l) The Company's Current Report on Form 8-K dated May 15, 1998, as
amended by Amendment No. 1 to the Current Report on Form 8-K on Form 8-K/A
dated May 22, 1998;
(m) The Company's Current Report on Form 8-K dated May 27, 1998;
(n) The Company's Current Report on Form 8-K dated June 15, 1998; and
(o) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A (filed May 19, 1994) and as amended by
the Company's Registration Statement on Form S-3 (Registration No.
333-12367), including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Debentures and Shares
pursuant hereto shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein 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.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
herein, other than the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to the
Company at 5 Post Oak Park, Suite 1760, Houston, Texas 77027, Attention:
Secretary (Telephone number: (713) 297-8400).
FORWARD-LOOKING STATEMENTS
Certain statements made herein and in other public filings and releases by
the Company contain "forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risk and uncertainty.
These forward-looking statements may include, but are not limited to, future
sales, earnings, margins, production levels and costs, expected savings from
acquisitions and plant expansions, demand for products, product deliveries,
market trends in the oil and gas industry and the oilfield service sector
thereof, research and development, environmental and other expenditures,
currency fluctuations and various business trends. Forward-looking statements
may be made by management orally or in writing including, but not limited to,
the Management's Discussion and Analysis of Financial Condition and Results of
Operations section and other sections of the Company's filings with the
Commission under the Exchange Act and the Securities Act.
Actual results and trends in the future may differ materially depending on
a variety of factors including, but not limited to, whether and for how long the
current pricing trend for oil will continue and the effect thereof on the demand
and price of the Company's products, changes in the price of oil and gas,
changes in the domestic and international rig count, global trade policies,
domestic and international drilling activities, the impact of the economic
downturn in Southeast Asia on the worldwide economies and associated demand for
oil, world-wide political stability and economic growth, including currency
fluctuations, government export and import policies, technological advances
involving the Company's products, the Company's successful
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execution of internal operating plans and manufacturing consolidations and
restructurings, performance issues with key suppliers and subcontractors, the
ability of the Company to maintain price increases and market shares, raw
material costs changes, collective bargaining labor disputes, regulatory
uncertainties and legal proceedings. Future results will also be dependent upon
the ability of the Company to successfully integrate the operations of
Weatherford with the Company, as well as its ability to continue to identify and
complete successful acquisitions at acceptable prices, integrate those
acquisitions with the Company's other operations and penetrate existing and new
markets. For additional information regarding risks and uncertainties relating
to the Company, see "Risk Factors" and the Company's reports filed with the
Commission referred to under "Incorporation of Certain Documents by Reference".
RISK FACTORS
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Actual results could differ materially from those projected or contemplated
in the forward-looking statements as a result of certain of the risk factors set
forth below and incorporated by reference in this Prospectus. In addition to the
other information contained and incorporated by reference in this Prospectus,
the following risk factors should be considered carefully in evaluating the
Company and its business before purchasing the Debentures or the Shares.
SUBORDINATION
The Debentures are unsecured and subordinated in right of payment to all
present and future Senior Indebtedness of the Company. As a result, in the event
of bankruptcy, liquidation or reorganization of the Company or upon acceleration
of the Debentures due to an event of default, the assets of the Company would be
available to pay obligations on the Debentures only after all Senior
Indebtedness has been paid in full, and there might not be sufficient assets
remaining to pay amounts due on any or all of the Debentures then outstanding.
The Debentures are also structurally subordinated to the liabilities, excluding
trade payables, of the Company's subsidiaries. The Indenture does not prohibit
or limit the incurrence of Senior Indebtedness or the incurrence of other
indebtedness and other liabilities by the Company or its subsidiaries, and the
incurrence of additional indebtedness and other liabilities by the Company or
its subsidiaries could adversely affect the Company's ability to pay its
obligations on the Debentures. At March 31, 1998, the Company had approximately
$325.5 million of outstanding Senior Indebtedness consisting of $102.0 million
in borrowings under the Company's credit facility, $200.0 million in 7 1/4%
Notes due 2006, $5.5 million of accrued interest and $18.0 million in contingent
reimbursement obligations under outstanding letters of credit. The Company's
subsidiaries also had approximately $31.6 million in borrowings under the
Company's credit facility, $67.0 million in outstanding debt and $9.7 million in
contingent letter of credit obligations outstanding at March 31, 1998. The
Company anticipates that from time to time it will incur additional
indebtedness, including Senior Indebtedness, and that it and its subsidiaries
will from time to time incur other additional indebtedness and liabilities. See
"Description of Debentures -- Subordination of Debentures".
Under the Debentures, no payment of principal (including redemption
payments, if any), premium, if any, or interest on the Debentures may be made if
(i) any Senior Indebtedness is not paid when due and any applicable grace period
with respect to such default has ended with such default not having been cured
or waived or ceasing to exist or (ii) the maturity of any Senior Indebtedness
has been accelerated because of a default. The Company also may not make any
payment upon or in respect of the Debentures if any non-payment default occurs
and is continuing with respect to the Company's Designated Senior Indebtedness
(as defined below) that permits the lenders to accelerate the maturity of the
loans made thereunder and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the Company or other person permitted to give
such notice under the Indenture. Payments on the Debentures may and shall be
resumed (a) in case of a payment default, upon the date on which such default is
cured or waived and (b) in case of a nonpayment default, upon the earlier of the
date on which such nonpayment default is cured or waived or ceases to exist or
179 days after the date on which the applicable Payment Blockage Notice is
received if the maturity of the Designated Senior Indebtedness has not been
accelerated. No new period of payment blockage may be commenced pursuant to a
Payment Blockage Notice unless and until (i) 365 days have elapsed since
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the initial effectiveness of the immediately prior Payment Blockage Notice and
(ii) all scheduled payments of principal, premium, if any, and interest on the
Debentures that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice.
OPTION TO EXTEND INTEREST PAYMENTS; TAX CONSEQUENCES
So long as the Company is not in default in the payment of interest on the
Debentures, the Company has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period at any time,
and from time to time, on the Debentures. Prior to the termination of any such
Extension Period, the Company may further extend such Extension Period;
provided, that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the maturity of the Debentures or any date of redemption of the
Debentures declared by the Company. Upon the termination of any Extension Period
and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. See "Description of
Debentures -- Option to Extend Interest Payment Period".
If the Company exercises its right to defer payments of interest by
extending the interest payment period, each holder of Debentures will continue
to accrue income (as original issue discount ("OID")) in respect of the deferred
and compounded interest allocable to its Debentures for United States federal
income tax purposes. As a result, each such holder of Debentures will recognize
income for United States federal income tax purposes in advance of the receipt
of cash and will not receive the cash from the Company related to such income if
such holder converts or otherwise disposes of its Debentures prior to the record
date for such interest payment. The Company has no current intention of
exercising its right to defer payments of interest by extending the interest
payment period of the Debentures. However, if the Company determines to exercise
such right in the future, the market price of the Debentures is likely to be
materially adversely affected. A holder that disposes of its Debentures during
an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Debentures. In addition, as a
result of the existence of the Company's right to defer interest payments, the
market price of the Debentures may be more volatile than other OID securities
that do not have such interest deferral rights. See "Certain Federal Income Tax
Considerations -- Potential Extension of Interest Payment Period and Original
Issue Discount".
ABSENCE OF MARKET FOR THE DEBENTURES AND RESTRICTIONS ON RESALE
The Debentures are eligible for trading through the PORTAL market. In
addition, although certain of the Initial Purchasers have advised the Company
that are currently making a market in the Debentures, they are not obligated to
do so and may discontinue such market making at any time without notice. In
addition, such market making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act. Accordingly, there can be no assurance
that any market for the Debentures will be maintained. If an active market for
the Debentures fails to be sustained, the trading price of such Debentures could
be materially adversely affected.
VOLATILITY OF COMMON STOCK PRICE
Volatility in the price of the Common Stock, changes in prevailing interest
rates and changes in the perception of the Company's creditworthiness may in the
future adversely affect the price of the Debentures. Additionally, the market
price of the Common Stock has varied significantly and may be volatile depending
on news announcements and changes in the oil and gas market conditions.
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THE COMPANY
GENERAL
The Company is a diversified international energy service and manufacturing
company that provides a variety of services and equipment to the exploration,
production and transmission sectors of the oil and gas industry. The Company's
principal industry segments consist of (i) drilling products, (ii) completion
and oilfield products and services and (iii) artificial lift and compression
products and services. The Company operates in virtually every oil and gas
exploration and production region in the world.
The Company's drilling products segment manufactures (i) drill pipe and
other drilling products, (ii) premium engineered connections and associated
tubulars and (iii) marine connectors and related accessories. The Company's
drilling products are designed and engineered for high performance applications.
Drill pipe, as well as drill collars, heavyweights and kellys manufactured by
the Company, serve as the principal mechanical drilling tools used to drill an
oil or natural gas well. These products constitute all components of the drill
stem used to drill a well from the rig to the drill bit. The Company's premium
tubulars consist of premium tubing, liner and casing and, together with the
Company's line of premium engineered connections, are used for the production of
oil and natural gas in harsh downhole environments. The Company's marine
connector product line consists of downhole conductors for offshore applications
and are used to define the original architecture of an offshore well and to
support subsea applications.
The Company's completion and oilfield products and services segment
manufactures, sells and services cementation products and liner hangers and
equipment used to provide oilfield services. Other products manufactured by this
segment include hydraulic power tongs and related equipment used to provide
tubular running services, milling tools, whipstocks and weighted drill pipe used
in rental and downhole services and sold to customers. This segment also
provides oilfield equipment rental, downhole services and tubular running
services. The Company's rental equipment includes specialized pressure control
equipment, drill string equipment, handling tools, stabilizers and other
equipment and tools used in the drilling, completion and workover of oil and gas
wells. Downhole services include fishing, milling, whipstock installation and
retrieval, well control assistance, plugging and abandonment services, pipe
recovery wireline services, foam services and internal casing patch
installation.
The Company's artificial lift and compression segment (i) designs,
manufactures and services a complete line of artificial lift equipment and (ii)
manufactures, packages, rents and sells parts and services for gas compressor
units over a broad horsepower range. The Company's artificial lift product line
includes a wide range of downhole pumps, surface pump drive units, gas lift
equipment, hydraulic lift products and progressing cavity pumps. The Company's
gas compressor units are used for increasing natural gas pressure to facilitate
gas flow from the wellhead and through gas gathering systems and processing
plants and injecting natural gas into oil wells to enhance recovery and into gas
storage wells. Other general applications include cogeneration, seismic marine
surveys and natural gas fueling stations.
The Company has achieved significant growth in recent years through a
consistent strategy of synergistic acquisitions and internal development.
Acquisitions have focused on the acquisition of name brand products, geographic
expansion, the development of complete product lines and savings through
consolidation. Internal development has focused on product development and
geographic expansion. The Company's growth strategy has resulted in the Company
becoming the largest manufacturer of drill pipe, drill collars and heavyweight
drill pipe in the world, the largest provider of premium tubular connectors in
North America and one of the largest providers of artificial lift equipment in
the world. The Company is the leading worldwide supplier of rental tools and
fishing and other downhole services and the leading worldwide provider of
tubular running services. To the Company's knowledge, none of its competitors
has as broad a product line of rod lift and progressing cavity pumps.
The Company was incorporated in 1972 as a Massachusetts corporation and was
reincorporated in Delaware in 1980. The Company's corporate office is located at
5 Post Oak Park, Suite 1760, Houston, Texas 77027-3415, and its telephone number
is (713) 297-8400.
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RECENT DEVELOPMENTS
Weatherford Merger. On May 27, 1998, Weatherford merged with and into the
Company pursuant to an Agreement and Plan of Merger dated March 4, 1998, as
amended, between the Company and Weatherford, with the Company being the
surviving corporation (the "Merger"). Following the Merger, the name of the
Company was changed to EVI Weatherford, Inc. Under the terms of the Merger, the
stockholders of Weatherford received 0.95 of a share of the Company's Common
Stock in exchange for each outstanding share of Weatherford common stock
outstanding immediately prior to the Merger.
Christiana Acquisition. In December 1997, the Company entered into a merger
agreement, as amended (the "Christiana Merger Agreement"), with Christiana
Companies, Inc., a Wisconsin corporation ("Christiana"), and C2, Inc., a
Wisconsin corporation, pursuant to which approximately 3.9 million shares of
Common Stock will be issued to the stockholders of Christiana in a merger of a
subsidiary of the Company with and into Christiana (the "Christiana
Acquisition"). Prior to the Christiana Acquisition, Christiana is required to
sell two-thirds of its interest in Total Logistic Control, LLC ("Logistic"), a
wholly owned subsidiary of Christiana, to C2, Inc. for approximately $10.7
million. Following the sale of Logistic, the remaining assets of Christiana will
consist of (i) approximately 3.9 million shares of Common Stock, (ii) a
one-third interest in Logistic and (iii) cash and other assets with a book value
of approximately $10.0 million. It is anticipated that Christiana will have no
material debt as of the date of consummation of the Christiana Acquisition, but
will have various tax liabilities that will be paid with the cash remaining in
Christiana after the Christiana Acquisition.
The Christiana Acquisition is subject to various conditions, including the
approval by the stockholders of the Company and Christiana. Although there can
be no assurance that the Christiana Acquisition will close, the Company
currently anticipates that the acquisition will be consummated shortly after the
approval of the Christiana Acquisition by the stockholders of the Company and
Christiana.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the unaudited ratio of earnings to fixed
charges of the Company for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
-------------------------------------- ------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... 4.02x 2.75x 0.69x(a) 3.74x 6.78x 5.55x 7.66x
</TABLE>
- ---------------
(a) Income (loss) before income taxes, extraordinary items, and fixed charges as
computed above were inadequate to cover fixed charges. In 1995, earnings, as
defined, were inadequate to cover fixed charges by $12.8 million.
For purposes of calculating the ratio of earnings to fixed charges, (i)
earnings consist of income (loss) from continuing operations before income taxes
and extraordinary items, adjusted to include only distributed income of
less-than-fifty percent owned persons, plus fixed charges and (ii) fixed charges
consist of interest expense incurred from continuing operations, amortization of
debt expense relating to any indebtedness and one third of rental expense
estimated to be attributable to interest.
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the
Debentures or the Shares by the Selling Securityholders.
7
<PAGE> 9
SELLING SECURITYHOLDERS
The Debentures were originally acquired from the Company by the Initial
Purchasers on November 3, 1997. The Initial Purchasers have advised the Company
that the Initial Purchasers resold the Debentures in transactions exempt from
the registration requirements of the Securities Act (a) within the United States
to "qualified institutional buyers" (as defined in Rule 144A under the
Securities Act) in reliance on Rule 144A under the Securities Act and
institutional "accredited investors" within the meaning of Rule 501(a)(l), (2),
(3) or (7) under the Securities Act, that agreed in writing to comply with the
transfer restrictions and other conditions, and (b) outside the United States to
certain persons in reliance on Regulation S under the Securities Act. These
subsequent purchasers, or their transferees, pledgees, donees or successors, may
from time to time offer and sell any or all of the Debentures and/or Shares
pursuant to this Prospectus.
The Debentures and the Shares are being registered pursuant to the
Registration Rights Agreement dated as of November 3, 1997, between the Company
and the Initial Purchasers (the "Registration Rights Agreement"), pursuant to
which the Company filed the Registration Statement with regard to the Debentures
and the Shares and which requires that the Company keep the Registration
Statement effective until the earlier of (i) the sale pursuant to the
Registration Statement or Rule 144 under the Securities Act of all the
Debentures and the Shares and (b) the expiration of the holding period
applicable to sales of such securities under Rule 144(k) under the Securities
Act, or any successor provision.
The Selling Securityholders named herein have advised the Company that they
currently intend to sell the Debentures and Shares set forth below pursuant to
this Prospectus. Additional Selling Securityholders may choose to sell the
Debentures and Shares from time to time upon notice to the Company. See "Plan of
Distribution".
Prior to any use of this Prospectus in connection with an offering of the
Debentures and Shares, this Prospectus will be supplemented to set forth the
name and number of shares beneficially owned by the Selling Securityholder
intending to sell such Debentures and Shares and the number of Debentures and
Shares to be offered. The Prospectus Supplement will also disclose whether any
Selling Securityholder selling in connection with such Prospectus Supplement has
held any position, office or other material relationship with the Company or any
of its predecessors or affiliates during the three years prior to the date of
the Prospectus Supplement.
Based solely on information provided by the Selling Securityholders, the
following table sets forth certain information with respect to the Debentures
and the Shares beneficially owned by each Selling Securityholder and the number
of such securities that may be sold pursuant to this Prospectus:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
DEBENTURES SHARES DEBENTURES SHARES
NAME OF BENEFICIALLY BENEFICIALLY TO BE TO BE
SELLING SECURITYHOLDER OWNED(1) OWNED(2) SOLD(3) SOLD(3)
---------------------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C>
ABN-AMRO Incorporated.................................... 225,000 140,625 225,000 --
AIM Charter Fund......................................... 300,000 187,500 300,000 --
AIM V.I. Growth & Income................................. 50,000 31,250 50,000 --
Alexandra Global Investment Fund, I...................... 45,000 28,125 45,000 --
Allegheny Teledyne Inc. Pension Plan(4).................. 78,200 48,875 78,200 --
Allstate Insurance Company............................... 60,000 65,600(5) 60,000 --
Alscott Investments, LLC(4).............................. 60,700 37,937 60,700 --
American Investors Life Insurance Company(6)............. 15,000 9,375 15,000 --
Argent Classic Convertible Arbitrage Fund L.P............ 25,000 15,625 25,000 --
Argent Classic Convertible Arbitrage Fund (Bermuda)
L.P.................................................... 130,000 81,250 130,000 --
Arkansas PERS............................................ 30,000 18,750 30,000 --
Associated Electric and Gas Insurance Services Limited... 10,000 6,250 10,000 --
Bank of America Convertible Securities Fund.............. 5,600 3,500 5,600 --
Colgate-Palmolive Company Pension Fund(4)................ 4,500 2,812 4,500 --
Common Fund(4)........................................... 3,400 2,125 3,400 --
Credit Suisse First Boston Corporation................... 105,000 65,625 105,000 --
Davis Convertible Securities Fund........................ 70,000 43,750 70,000 --
Delaware PERS............................................ 25,000 15,625 25,000 --
Deutsche Bank A.G.(7).................................... 502,750 314,218 502,750 --
</TABLE>
8
<PAGE> 10
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
DEBENTURES SHARES DEBENTURES SHARES
NAME OF BENEFICIALLY BENEFICIALLY TO BE TO BE
SELLING SECURITYHOLDER OWNED(1) OWNED(2) SOLD(3) SOLD(3)
---------------------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C>
Donaldson, Lufkin & Jenrette Securities Corporation(8)... 532,600 332,875 532,600 --
Employee Benefit Convertible Fund........................ 3,200 2,000 3,200 --
Estate of Carol G. Simon(4).............................. 7,000 4,375 7,000 --
Federated Equity Funds, a Massachusetts business trust,
on behalf of its Federated Capital Appreciation Fund... 34,000 31,250 34,000 --
Federated Equity Income Fund, Inc.(8).................... 624,800 390,500 624,800 --
Federated Insurance Series, a Massachusetts business
trust, on behalf of its Federated Equity Income Fund
II..................................................... 10,200 6,375 10,200 --
Fidelity Financial Trust:
Fidelity Convertible Securities Fund(9)................ 30,000 2,419,800(10) 30,000 --
Franklin Custodian Funds -- Income Fund(11).............. 1,100,000 687,500 1,100,000 --
Franklin Investors Securities Trust -- Convertible
Securities Fund........................................ 20,000 12,500 20,000 --
Franklin Valuemark Income Securities Fund................ 110,000 68,750 110,000 --
Frederic C. Hamilton(4).................................. 10,300 6,437 10,300 --
GEM Convertible Securities Partners, L.P................. 41,600 26,000 41,600 --
General Motors Employees Domestic Group Pension
Trust(12).............................................. 118,350 73,968 118,350 --
General Motors Foundation, Inc.(12)...................... 4,350 2,718 4,350 --
General Motors Investment Management Corp.(6)............ 75,000 46,875 75,000 --
Golden Rule Insurance Company(4)......................... 56,300 35,187 56,300 --
Hawaiian Airlines Pension Plan for Salaried Employees.... 400 250 400 --
Hawaiian Airlines Employees Pension Plan-IAM............. 1,500 937 1,500 --
HSBC Securities Inc...................................... 73,000 45,625 73,000 --
ICI American Holdings Trust.............................. 11,000 6,875 11,000 --
J.P. Morgan & Co. Incorporated........................... 265,000 170,227 265,000 --
Kapiolani Medical Systems................................ 4,000 2,500 4,000 --
Lakeside Capital L.L.C................................... 3,200 2,000 3,200 --
Lazard Freres & Co. LLC.................................. 47,600 29,750 47,600 --
Lincoln National Convertible Securities Fund(13)......... 47,875 29,921 47,875 --
MainStay Convertible Fund(14)............................ 171,000 106,875 171,000 --
MainStay Strategic Value Fund(14)........................ 4,000 2,500 4,000 --
MainStay VP Convertible Portfolio(14).................... 30,000 18,750 30,000 --
Mark IV Industries, Inc. and Subsidiaries Master
Trust(4)............................................... 2,000 1,250 2,000 --
McMahan Securities Company, L.P.......................... 4,825 3,016 4,825 --
MFS Series Trust I -- MFS Convertible Securities Fund.... 200 125 200 --
MFS Series Trust V -- MFS Total Return Fund.............. 59,800 37,375 59,800 --
Motors Insurance Corporation(15)......................... 37,300 23,312 37,300 --
Mount Sinai School of Medicine(4)........................ 2,600 1,625 2,600 --
Nalco Chemical Retirement Trust.......................... 5,000 3,125 5,000 --
NationsBanc Montgomery Securities LLC.................... 50,000 31,250 30,000 --
Nationwide Family of Funds, on behalf of its Nationwide
Equity Income Fund..................................... 800 500 800 --
New York Life Separate Account #7(14).................... 10,000 6,250 10,000 --
Oppenheimer Convertible Securities Fund -- Bond Fund
Series................................................. 100,000 62,500 100,000 --
Pacific Horizon Capital Income Fund...................... 97,000 60,625 97,000 --
Pacific Innovation Trust Capital Income Fund............. 4,000 2,500 4,000 --
PaineWebber Balanced Fund, a series of PaineWebber Master
Series, Inc............................................ 13,000 8,125 13,000 --
PaineWebber Growth and Income Fund, a series of
PaineWebber America Fund............................... 63,000 39,375 63,000 --
PaineWebber Series Trust -- Balanced Portfolio........... 2,800 1,750 2,800 --
PaineWebber Series Trust -- Growth and Income
Portfolio.............................................. 1,200 750 1,200 --
Paloma Securities L.L.C.................................. 70,000 71,650 70,000 --
Phoenix Convertible Fund................................. 42,000 26,250 42,000 --
Pitney Bowes Retirement Fund(4).......................... 59,000 36,875 59,000 --
PRIM Board............................................... 46,000 28,750 46,000 --
Public Employees' Retirement Association of Colorado..... 70,000 114,250 70,000 --
Regence Blue Cross Blue Shield of Idaho(6)............... 1,000 625 1,000 --
Retirement Plan for Pilots of Hawaiian Airlines.......... 2,500 1,562 2,500 --
</TABLE>
9
<PAGE> 11
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
DEBENTURES SHARES DEBENTURES SHARES
NAME OF BENEFICIALLY BENEFICIALLY TO BE TO BE
SELLING SECURITYHOLDER OWNED(1) OWNED(2) SOLD(3) SOLD(3)
---------------------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C>
Saudi International Bank................................. 60,000 37,500 60,000 --
Shepherd Investments International Ltd.(16).............. 884,900 553,062 884,900 --
Stark International(17).................................. 402,150 251,343 402,150 --
Starvest Discretionary................................... 10,000 6,250 10,000 --
State of Oregon/SAIF Corporation......................... 100,000 62,500 100,000 --
State of Oregon Equity................................... 95,000 59,375 95,000 --
The Gabelli Global Convertible Securities Fund........... 4,000 2,500 4,000 --
The Lutheran Church-Missouri Synod....................... 45,000 28,125 45,000 --
The Northwestern Mutual Life Insurance Company........... 200,000(18) 351,700(19) 200,000(18) --
The TCW Group, Inc....................................... 188,200 117,625 188,200 --
The Value Line Income Fund............................... 40,000 25,000 40,000 --
TQA Vantage Plus, Ltd.................................... 12,500 7,812 12,500 --
TQA Vantage Fund, Ltd.................................... 25,000 15,625 25,000 --
TQA Leverage Fund, L.P................................... 12,500 7,812 12,500 --
TQA Arbitrage Fund, L.P.................................. 50,000 31,250 50,000 --
United National Insurance(13)............................ 2,275 1,421 2,275 --
United States Olympic Foundation(4)...................... 22,500 14,062 22,500 --
Van Kampen American Capital Convertible Securities
Fund(20)............................................... 15,000 9,375 15,000 --
Van Kampen American Capital Harbor Fund(20).............. 40,000 25,000 40,000 --
Walker Art Center(13).................................... 5,515 3,446 5,515 --
Weirton Trust(13)........................................ 14,335 8,959 14,335 --
Wenonah Development Company.............................. 22,000 13,750 22,000 --
Xerox Corporation Profit Sharing Plan(4)................. 26,900 16,812 26,900 --
ZENECA Holdings Trust.................................... 11,000 6,875 11,000 --
</TABLE>
- ---------------
(1) None of the Selling Securityholders beneficially own one percent or more of
the outstanding Debentures or Shares, except for AIM Charter Fund, Argent
Classic Convertible Arbitrage Fund (Bermuda) L.P., Deutsche Bank A.G.,
Donaldson, Lufkin & Jenrette Securities Corporation, Federated Equity
Income Fund, Inc., Franklin Custodian Funds -- Income Fund, Franklin
Valuemark Income Securities Fund, General Motors Employees Domestic Group
Pension Trust, J.P. Morgan & Co. Incorporated, MainStay Convertible Fund,
Pacific Horizon Capital Income Fund, Shepard Investments International
Ltd., Stark International, State of Oregon/SAIF Corporation, The
Northwestern Mutual Life Insurance Company and The TCW Group, Inc., which
own 3.7%, 1.6%, 6.2%, 6.6%, 7.8%, 13.7%, 1.4%, 1.5%, 3.3%, 2.1%, 1.2%,
11.0%, 5.0%, 1.2%, 2.5% and 2.3% of the Debentures, respectively.
(2) Includes shares of Common Stock issuable upon conversion of the Debentures.
(3) Because a Selling Securityholder may sell all or a portion of the
Debentures and the Shares pursuant to this Prospectus, no estimate can be
given as to the number and percentages of Debentures or Shares that will be
held by the Selling Securityholder upon termination of any such sales.
(4) GEM Capital Management, Inc. serves as investment advisor and, in its
capacity as such, has investment discretion with respect to the Debentures
and Shares.
(5) Includes 28,100 shares of Common Stock beneficially owned by Allstate
Insurance Company.
(6) Salomon Brothers Asset Management Inc. serves as discretionary investment
advisor and, in its capacity as such, has sole voting and investment power
over the Debentures and Shares.
(7) The address for Deutsche Bank A.G. is 31 W. 52nd Street, New York, New York
10019.
(8) The address for Donaldson, Lufkin & Jenrette Securities Corporation is 277
Park Avenue, New York, New York 10172. The address for Federated Equity
Income Fund is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh,
Pennsylvania 15222-3779.
(9) Fidelity Management & Research Company ("Fidelity"), a wholly owned
subsidiary of FMR Corp. ("FMR") and a registered investment adviser, is the
beneficial owner of 30,000 Debentures, and the underlying 18,750 shares of
Common Stock, as a result of acting as investment adviser to Fidelity:
Financial Trust: Fidelity Convertible Securities Fund (the "Fund").
Fidelity's and FMR's address is 82 Devonshire Street, Boston, Massachusetts
02109.
10
<PAGE> 12
(10) FMR is deemed to be the beneficial owner of the 30,000 Debentures and an
aggregate of 2,419,800 shares of Common Stock, consisting of 18,750 shares
of Common Stock issuable upon conversion of the Debentures and an
additional 2,401,050 shares of Common Stock (representing approximately
5.0% of the outstanding shares of Common Stock).
(11) The address for Franklin Custodian Funds -- Income Fund is 777 Mariners
Island Blvd., 7th Floor, San Mateo, California 94404.
(12) General Motors Investment Management Corporation serves as investment
advisor and, in its capacity as such, has sole voting and investment power
over the Debentures and Shares.
(13) Lynch & Mayer, Inc. serves as investment advisor and, in its capacity as
such, has shared investment power over the Debentures and Shares.
(14) MacKay-Shields Financial Corp. serves as investment advisor and, in its
capacity as such, has shared voting and investment power over the
Debentures and Shares.
(15) General Motors Investment Management Corporation serves as investment
advisor and, in its capacity as such, has sole voting and investment power
over 27,300 Debentures. Salomon Brothers Asset Management Inc. serves as
discretionary investment advisor and, in its capacity as such, has sole
voting and investment power over 10,000 Debentures.
(16) The address for Shepard Investments International Ltd. is 1500 West Market
Street, Suite 200, Mequon, Wisconsin 53092.
(17) The address for Stark International is 1500 West Market Street, Suite 200,
Mequon, Wisconsin 53092.
(18) Includes 10,000 Debentures held in the Northwestern Mutual Life Insurance
Company Group Annuity Separate Account. The Northwestern Mutual Life
Insurance Company has shared voting and shared investment power with
respect to these 10,000 Debentures.
(19) Includes 51,550 shares, including the 6,250 shares of Common Stock issuable
upon conversion of the Debentures described in note 18, held in The
Northwestern Mutual Life Insurance Company Group Annuity Separate Account.
The Northwestern Mutual Life Insurance Company has shared voting and shared
investment power with respect to these shares.
(20) Van Kampen American Capital Asset Management, Inc. serves as investment
advisor and, in such capacity, has discretionary authority to make
investment decisions with respect to the Debentures and Shares.
None of the Selling Securityholders named above have, within the past three
years, held any position, office or other material relationship with the Company
or any of its predecessors or affiliates, except as noted above.
11
<PAGE> 13
PLAN OF DISTRIBUTION
The Debentures and the Shares are being registered to permit public
secondary trading of such securities by the holders thereof from time to time
after the date of this Prospectus. The Company has agreed, among other things,
to bear all expenses in connection with the registration of the Debentures and
the Shares covered by this Prospectus. The Company will not receive any of the
proceeds from the offering of Debentures and the Shares by the Selling
Securityholders.
The Debentures are eligible for trading through the PORTAL Market. The
Selling Securityholders (and their donees and pledgees) may sell all or a
portion of the Debentures and Shares beneficially owned by them and offered
hereby from time to time on any exchange on which the securities are listed on
terms to be determined at the times of such sales. The Selling Securityholders
may also make private sales directly or through a broker or brokers.
Alternatively, any of the Selling Securityholders may from time to time offer
the Debentures or the Shares beneficially owned by them through dealers or
agents, who may receive compensation in the form of commissions or concessions
from the Selling Securityholders and the purchasers of the Debentures or the
Shares for whom they may act as agent. The aggregate proceeds to the Selling
Securityholders from the sale of the Debentures or the Shares offered by them
hereby will be the purchase price of such Debentures or the Shares less
discounts and commissions, if any.
The Debentures and the Shares may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the holders of such securities or by agreement between such
holders and dealers who may receive fees or commissions in connection therewith.
The outstanding Common Stock is publicly traded on the NYSE and the Shares
have been approved for listing upon official notice of issuance. The Initial
Purchasers, other than Lehman Brothers Inc. ("Lehman Brothers"), are making a
market in the Debentures; however, they are not obligated to do so and any such
market-making may be discontinued at any time without notice, in the sole
discretion of the Initial Purchasers. Accordingly, no assurance can be given as
to the development or liquidity of any trading market that may develop for the
Debentures.
The Selling Securityholders and any broker-dealers or agents that
participate with the Selling Securityholders in the distribution of the
Debentures or the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act, in which event any commissions received by such
broker-dealer or agents and any profits realized by the Selling Securityholders
on the resales of the Debentures or the shares purchased by them may be deemed
to be underwriting commissions or discount under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
such other available exemption rather than pursuant to this Prospectus. There is
no assurance that any Selling Securityholder will sell any or all of the
Debentures or Shares described herein, and any Selling Securityholder may
transfer, devise or gift such securities by other means not described herein.
The Debentures were originally sold by the Company to the Initial
Purchasers in November 1997 in a private placement. The Company agreed to
indemnify and hold the Initial Purchasers harmless against certain liabilities
under the Securities Act that could arise in connection with the sale of the
Debentures by the Initial Purchasers. The Registration Rights Agreement provides
for the Company and the Selling Securityholders to indemnify each other against
certain liabilities arising under the Securities Act.
The Company has agreed to use reasonable efforts to keep the Registration
Statement to which this Prospectus relates effective until the earlier of (i)
the sale pursuant to the Registration Statement or Rule 144 under the Securities
Act of all the Debentures and Shares and (ii) the expiration of the holding
period applicable to sales of such securities under Rule 144(k) under the
Securities Act, or any successor provision. The Registration Rights Agreement
provides that, under certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events, the Company
is permitted to suspend the use of this Prospectus in connection with the sales
of Debentures and Shares by Selling Securityholders for a period not to exceed
30 days in any three month period (or an additional 30 days if it gives a second
notice
12
<PAGE> 14
during such 30 day period) and not to exceed an aggregate of 60 days in any
12-month period. The Company has agreed to pay predetermined liquidated damages
to Selling Securityholders of Debentures and Shares who have requested to sell
such securities pursuant to the Registration Statement if the Commission issues
a stay order suspending the effectiveness of the Registration Statement or if
this Prospectus is unavailable for periods in excess of those permitted above
until such time as the stay order is removed or this Prospectus is again made
available, as the case may be. The Company has further agreed, if such
unavailability continues for an additional 30-day period, to pay such
predetermined liquidated damages to all holders of Debentures and Shares,
whether or not any such holder has requested to sell such securities pursuant to
the Registration Statement, until such time as this Prospectus is again made
available. Expenses of preparing and filing the Registration Statement and all
post-effective amendments will be borne by the Company.
Certain of the Initial Purchasers have engaged in transactions with and
performed various investment banking and other services for the Company in the
past, and may do so from time to time in the future.
At June 23, 1998, Lehman Brothers Holdings Inc. ("Lehman Holdings"), an
affiliate of Lehman Brothers, owned 3,598,832 shares of Common Stock
(approximately 3.7% of the shares of Common Stock outstanding as of June 23,
1998). David J. Butters and Robert B. Millard, who are employees of Lehman
Brothers, constitute two of the eight members of the Company's Board of
Directors. Lehman Brothers is not making a market in the Debentures or the
Shares.
DESCRIPTION OF DEBENTURES
The Debentures were issued under an Indenture dated as of October 15, 1997,
as supplemented (the "Indenture"), between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"). A copy of the Indenture and the Registration
Rights Agreement (as defined below) have been filed as exhibits to the
Registration Statement. The following summaries of certain provisions of the
Debentures, the Indenture and the Registration Rights Agreement do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all of the provisions of the Debentures, the Indenture and the
Registration Rights Agreement, including the definitions therein of certain
terms which are not otherwise defined in this Prospectus. Wherever particular
provisions or defined terms of the Indenture (or of the Form of Debenture which
is a part thereof) or the Registration Rights Agreement are referred to, such
provisions or defined terms are incorporated herein by reference. The Indenture
is qualified under the Trust Indenture Act.
GENERAL
The Debentures represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "-- Subordination of Debentures" and convertible into shares of
Common Stock as described under "-- Conversion of Debentures". The Debentures
are limited to 8,050,000 Debentures having an aggregate principal amount of
$402,500,000. The Debentures are not subject to a sinking fund provision. The
entire principal amount of the Debentures will mature and become due and
payable, together with any accrued and unpaid interest thereon including
Compound Interest (as herein defined), if any, on November 1, 2027, unless
earlier redeemed at the option of the Company.
The Indenture does not contain any financial covenants or restrictions on
the payment of dividends or the repurchase of Common Stock (except during
periods when interest on the Debentures is deferred), the incurrence of Senior
Indebtedness (as defined below under "Subordination of Debentures") or the
issuance or repurchase of securities of the Company. The Indenture contains no
covenants or other provisions to afford protection to holders of the Debentures
in the event of a highly leveraged transaction or a change in control of the
Company.
The Debentures bear interest at the annual rate of 5% payable quarterly in
arrears on February 1, May 1, August 1 and November 1 of each year (each an
"Interest Payment Date"), to the person in whose name such Debenture is
registered, subject to certain exceptions, 15 days prior to such Interest
Payment Date.
The amount of interest payable for any period is computed on the basis of a
360-day year of twelve 30-day months. The amount of interest payable for any
period shorter than a full quarterly period for which
13
<PAGE> 15
interest is computed is computed on the basis of the actual number of days
elapsed per 30-day month. In the event that any Interest Payment Date is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, then such payment is required to be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company is not in default in the payment of interest on the
Debentures, the Company has the right at any time, and from time to time, during
the term of the Debentures to defer payments of interest by extending the
interest payment period for a period not exceeding 20 consecutive quarters
(each, an "Extension Period"), at the end of which Extension Period, the Company
is required to pay all interest then accrued and unpaid together with interest
thereon compounded quarterly at an annual rate of 5% for the Debentures to the
extent permitted by applicable law ("Compound Interest"); provided that during
any such Extension Period, (a) the Company may not declare or pay dividends on,
make any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans;
provided that no purchases of Common Stock may be made by the Company with cash
other than pursuant to trust arrangements entered into in connection with such
plans; (ii) as a result of a reclassification of the Company capital stock or
the exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such the Company capital stock or the
security being converted or exchanged for the Company capital stock or (iv)
acquisitions of capital stock pursuant to purchase price adjustments and
indemnification provisions under acquisition agreements), (b) the Company may
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company that rank pari
passu with or junior to the Debentures and (c) the Company may not make any
guarantee payments with respect to the foregoing. Prior to the termination of
any such Extension Period, the Company may further defer payments of interest by
extending the interest payment period; provided, however, that such Extension
Period, including all such previous and further extensions, may not exceed 20
consecutive quarters or extend beyond the maturity of the Debentures or any date
of redemption of the Debentures declared by the Company. Upon the termination of
any Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the terms set forth in this section.
No interest during an Extension Period, except at the end thereof, will be due
and payable. The Company has no present intention of exercising its right to
defer payments of interest by extending the interest payment period on the
Debentures. The Company must give the Trustee notice of its election of any
Extension Period at least 15 business days before the regular record date.
FORM, DENOMINATION AND REGISTRATION
The Debentures have been issued in fully registered form, without coupons,
in denominations of $50 principal amount and multiples thereof.
Global Debenture, Book-Entry Form. The Debentures offered hereby are
evidenced by Debentures in registered global form (the "Global Debentures"),
which have been deposited with, or on behalf of, The Depository Trust Company,
New York, New York ("DTC"), and registered in the name of Cede & Co. ("Cede") as
DTC's nominee, and, in the case of a Regulation S Global Debenture deposited
with the Euroclear System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel
Bank") (as indirect participants in DTC). Except as set forth below, the Global
Debenture may be transferred, in whole or in part, only to another nominee of
DTC or to a successor of DTC or its nominee.
Purchasers of the Debentures offered hereby may hold their interests in the
Global Debentures directly through DTC or indirectly through organizations
(including Euroclear and Cedel Bank) which are partici-
14
<PAGE> 16
pants in DTC (the "Participants"). Transfers between Participants will be
effected in the ordinary way in accordance with DTC rules and will be settled in
clearing house funds.
Persons who are not Participants may beneficially own interests in the
Global Debentures held by DTC only through Participants or certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly. So long as the nominees of DTC are the registered owner of the
Global Debentures, such nominees for all purposes will be considered the sole
holder of the Global Debentures. Except as provided below, owners of beneficial
interests in the Global Debentures will not have certificates registered in
their names, will not receive physical delivery of certificates in definitive
form, and will not be considered the holders thereof.
Payment of interest on and the redemption price of the Global Debentures
will be made to the nominees for DTC, as the registered owners of the Global
Debentures by wire transfer of immediately available funds on each interest
payment date or the redemption date, as the case may be. Neither the Company,
the Trustee nor any paying agent will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Debentures or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company has been informed by DTC that, with respect to any payment of
interest on, or the redemption price of, the Global Debentures, DTC's practice
is to credit Participants' accounts on the payment date therefor with payments
in amounts proportionate to their respective beneficial interests in the
principal amount represented by the Global Debentures as shown on the records of
DTC, unless DTC has reason to believe that it will not receive payment on such
date. Payments by Participants to owners of beneficial interests in the
principal amount represented by the Global Debentures held through such
Participants will be the responsibility of such Participants, as is now the case
with securities held for the accounts of customers registered in "street name".
Because DTC can only act on behalf of Participants, who in turn act on
behalf of certain other banks, brokers, dealers, trust companies and other
parties that clear through or maintain a custodial relationship, either directly
or indirectly, with a Participant ("Indirect Participants"), the ability of a
person having a beneficial interest in the principal amount represented by the
Global Debentures to pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate evidencing such
interest.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants, the ability of a person having a beneficial
interest in the Debentures represented by the Global Debentures to pledge such
interest to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interest, may be affected by the lack
of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action permitted
to be taken by a holder of Debentures (including, without limitation, the
presentation of Debentures for exchange as described below), only at the
direction of one or more Participants to whose account with DTC interests in the
Global Debenture are credited, and only in respect of the principal amount of
the Debentures represented by the Global Debenture as to which such Participant
or Participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes to the accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may
15
<PAGE> 17
include certain other organizations such as the Initial Purchasers. Certain of
such Participants (or their representatives), together with other entities, own
DTC. Indirect access to the DTC system is available to others such as banks,
brokers, dealers and trust companies that clear through, or maintain a custodial
relationship with, a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Registered Global Debentures among Participants,
it is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. If DTC is at any time unwilling
or unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will cause Debentures to be issued in
definitive form in exchange for the Global Debentures.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the Global Debenture.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and Indirect Participants to beneficial
owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time. Redemption
notices shall be sent to Cede & Co. If less than all of the Debentures are being
redeemed, DTC will reduce the amount of the interest of each Participant in such
Debentures in accordance with its procedures.
Holders of Debentures evidenced by the Global Debentures may request that
any beneficial interest in the Debentures be exchanged for certificated
securities in definitive form pursuant to the requirements of DTC for such an
exchange.
Holders of Debentures may request that any certificated Debenture they hold
in definitive registered form be exchanged for interests in the applicable
Global Debenture. Certificated Debentures may be issued in exchange for
Debentures represented by a Global Debenture if a depositary is unwilling or
unable to continue as a depositary for the Global Debenture as set forth above.
CONVERSION OF DEBENTURES
General. The Debentures are convertible into shares of Common Stock at the
option of the holders of the Debentures at any time prior to the close of
business on the Business Day prior to the maturity date of the Debentures (or,
in the case of Debentures called for redemption, the close of business on the
Business Day prior to the Redemption Date) at a current conversion rate of .625
shares of the Common Stock for each $50 principal amount of Debentures
(equivalent to a conversion price of $80 per share of the Common Stock), subject
to adjustment as described below. The Company's delivery to the holders of the
Debentures (through the Conversion Agent) of the fixed number of shares of the
Common Stock into which the Debentures are convertible (together with the cash
payment, if any, in lieu of fractional shares) will be deemed to satisfy the
Company's obligation to pay the principal amount of the Debentures so converted,
and the accrued and unpaid interest thereon, whether or not in arrears,
attributable to the period from the last date to which interest has been paid or
duly provided for; provided, however, that if any Debenture is converted on or
after a record date for payment of interest, the interest payable on the related
interest payment date with respect to such Debenture shall be paid to the holder
of Debentures, despite such conversion; provided further, that if a Redemption
Date falls between such record date and the related interest payment date, the
amount of such payment shall include interest accrued to, but excluding, such
Redemption Date.
The terms of the Debentures provide that a holder of Debentures wishing to
exercise its conversion right must surrender such Debentures, together with an
irrevocable conversion notice, to the Trustee, as conversion agent (the
"Conversion Agent"), which shall, on behalf of such holder, convert such
Debenture into Common Stock. Holders may obtain copies of the required form of
the conversion notice from the Conversion Agent. Beneficial holders of
Debentures who desire to convert them into Shares should contact their brokers
or other Participants or Indirect Participants to obtain information on
procedures, including proper forms and cut-off times, for submitting such
request.
16
<PAGE> 18
No fractional shares of the Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by the
Company in cash based on the current market price of the Common Stock on the
date such Debentures are surrendered for conversion.
Conversion Price Adjustments -- General. The current conversion price of
$80 per share of the Common Stock is subject to adjustment (under formulae set
forth in the Indenture) in certain events, including:
(i) the issuance of shares of the Common Stock as a dividend or a
distribution with respect to the Common Stock;
(ii) certain subdivisions, reclassifications and combinations of the
Common Stock;
(iii) the issuance to all holders of the Common Stock of certain
rights or warrants entitling them to subscribe for or purchase shares of
the Common Stock at a price less than the current market price per share of
Common Stock;
(iv) the distribution to all holders of the Common Stock of shares of
capital stock (other than the Common Stock) or evidences of indebtedness of
the Company or of assets (including securities, but excluding those rights,
warrants, dividends and distributions referred to above or paid in cash);
(v) dividends or distributions consisting of cash, excluding any
quarterly cash dividend on the Common Stock to the extent that the
aggregate cash dividend per share of the Common Stock in any quarter does
not exceed the greater of (x) the amount per share of the Common Stock of
the next preceding quarterly dividend on the Common Stock to the extent
that such preceding quarterly dividend did not require an adjustment of the
conversion rate pursuant to this clause (v) (as adjusted to reflect
subdivisions or combinations of the Common Stock), and (y) 3.75% of the
average of the daily Closing Prices (as defined below) of the Common Stock
during the ten consecutive Trading Days (as defined below) immediately
prior to the date of declaration of such dividend, and excluding any
dividend or distribution in connection with the liquidation, dissolution or
winding-up of the Company;
(vi) payment to holders of the Common Stock in respect of a tender or
exchange offer by the Company or any subsidiary for all or a portion of the
Common Stock to the extent that the cash and value of any other
consideration included in such payment per share of the Common Stock
exceeds the Closing Price per share of Common Stock on the Trading Day next
succeeding the last date on which tenders or exchanges may be made pursuant
to such tender or exchange offer; and
(vii) payment in respect of a tender offer or exchange offer by a
person other than the Company or any subsidiary of the Company in which, as
of the closing date of the offer, the Board of Directors is not
recommending rejection of the offer.
If an adjustment is required to be made as set forth in clause (v) above as
a result of a distribution that is a quarterly dividend, such adjustment would
be based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant to such clause (v). If
an adjustment is required to be made based upon the full amount of the
distribution that is not a quarterly dividend, such adjustment would be based
upon the full amount of the distribution. The adjustment referred to in clause
(vii) above will only be made (A) if the tender offer or exchange offer is for
an amount that increases that person's ownership of the Common Stock to more
than 25% of the total shares of the Common Stock outstanding and (B) if the cash
and value of any other consideration included in such payment per share of the
Common Stock exceeds the Closing Price per share of the Common Stock on the
Trading Day next succeeding the last date on which tenders or exchanges may be
made pursuant to such tender or exchange offer. The adjustment referred to in
clause (vii) above will not be made, however, if, as of the closing of the
offer, the offering documents with respect to such offer disclose a plan or an
intention to cause the Company to engage in a consolidation or merger of the
Company or a sale of all or substantially all of the Company's assets.
The Company may from time to time, to the extent permitted by law, reduce
the conversion price of the Debentures by any amount for any period of at least
20 days, in which case the Company shall give at least 15 days' notice of such
reduction, if the Company Board of Directors has made a determination that such
17
<PAGE> 19
reduction would be in the best interests of the Company, which determination
shall be conclusive. The Company may, at its option, make such reductions in the
conversion price, in addition to those set forth above, as the Company Board of
Directors deems advisable to avoid or diminish any income tax to holders of the
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. See
"Certain Federal Income Tax Considerations -- Adjustment of Conversion Price".
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided, however, that any adjustment that would not be required to be
made shall be carried forward and taken into account in any subsequent
adjustment. If any action would require adjustment of the conversion price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the holder of the Debentures. Except as stated above,
the conversion price will not be adjusted for the issuance of the Common Stock
or any securities convertible into or exchangeable for the Common Stock or
carrying the right to purchase any of the foregoing.
Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of
the Company. In the event the Company is a party to any transaction (including
without limitation (i) any recapitalization or reclassification of the Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination
of the Common Stock), (ii) any consolidation or merger of the Company with or
into another person or any merger of another person into the Company (other than
a merger that does not result in a reclassification, conversion, exchange or
cancellation of the Common Stock), (iii) any sale or transfer of all or
substantially all of the assets of the Company, or (iv) any compulsory share
exchange) pursuant to which either shares of the Common Stock shall be converted
into the right to receive other securities, cash or other property, or, in the
case of a sale or transfer of all or substantially all of the assets of the
Company, the holders of the Common Stock will be entitled to receive other
securities, cash or other property, then appropriate provision shall be made as
part of the terms of such transaction so that the holder of each Debenture then
outstanding shall have the right thereafter to convert such Debenture only into:
(x) in the case of any such transaction that does not constitute a
Common Stock Fundamental Change (as defined below) and subject to funds
being legally available for such purpose under applicable law at the time
of such conversion, the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange
by a holder of the number of shares of the Common Stock issuable upon
conversion of such Debenture immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after giving effect, in the case of any Non-Stock Fundamental Change (as
defined below), to any adjustment in the conversion price in accordance
with clause (i) of the following paragraph, and
(y) in the case of any such transaction that constitutes a Common
Stock Fundamental Change, common stock of the kind received by holders of
the Common Stock as a result of such Common Stock Fundamental Change in an
amount determined in accordance with clause (ii) of the following
paragraph.
The company formed by such consolidation or resulting from such merger or that
acquires assets or that acquires the Company's shares, as the case may be, is
required to make provisions in its certificate or articles of incorporation or
other constituent document to establish such right. Such certificate or articles
of incorporation or other constituent document must provide for adjustments
that, for events subsequent to the effective date of such certificate or
articles of incorporation or other constituent documents, shall be as nearly
equivalent as may be practicable to the relevant adjustments provided for in the
preceding paragraphs and in this paragraph.
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<PAGE> 20
Notwithstanding any other provision in the preceding paragraphs to the
contrary, if any Fundamental Change (as defined below) occurs, then the
conversion price in effect will be adjusted immediately after such Fundamental
Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the conversion
price of the Debentures immediately following such Non-Stock Fundamental
Change will be the lower of (A) the conversion price in effect immediately
prior to such Non-Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to the preceding paragraphs, and
(B) the product of (1) the greater of the Applicable Price (as defined
below) and the then applicable Reference Market Price (as defined below)
and (2) a fraction, the numerator of which is $50 and the denominator of
which is (x) the amount of the redemption price for one Debenture if the
redemption date were the date of such Non-Stock Fundamental Change (or, for
the twelve-month periods commencing November 1, 1997, November 1, 1998 and
November 1, 1999, the product of 105.0%, 104.5% and 104.0%, respectively,
times $50) plus (y) any then-accrued and unpaid distributions on one
Debenture; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of Debentures immediately following such Common Stock Fundamental
Change will be the conversion price in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to the preceding paragraphs, multiplied by a
fraction, the numerator of which is the Purchaser Stock Price (as defined
below) and the denominator of which is the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental Change in which
(A) 100% of the value of the consideration received by a holder of the
Common Stock is common stock of the successor, acquiror or other third
party (and cash, if any, paid with respect to any fractional interests in
such common stock resulting from such Common Stock Fundamental Change) and
(B) all of the Common Stock shall have been exchanged for, converted into
or acquired for, common stock of the successor, acquiror or other third
party (and any cash with respect to fractional interests), the conversion
price of the Debentures immediately following such Common Stock Fundamental
Change will be the conversion price in effect immediately prior to such
Common Stock Fundamental Change multiplied by a fraction, the numerator of
which is one (1) and the denominator of which is the number of shares of
common stock of the successor, acquiror or other third party received by a
holder of one share of the Common Stock as a result of such Common Stock
Fundamental Change.
Depending upon whether a Fundamental Change is a Non-Stock Fundamental
Change or a Common Stock Fundamental Change, a holder may receive significantly
different consideration upon conversion. In the event of a Non-Stock Fundamental
Change, the holder has the right to convert Debentures into the kind and amount
of the shares of stock and other securities or property or assets (including
cash), except as otherwise provided above, as is determined by the number of
shares of the Common Stock receivable upon conversion at the conversion price as
adjusted in accordance with clause (i) of the preceding paragraph. However, in
the event of a Common Stock Fundamental Change in which less than 100% of the
value of the consideration received by a holder of the Common Stock is common
stock of the successor, acquiror or other third party, a holder of a Debenture
who converts such share following the Common Stock Fundamental Change will
receive consideration in the form of such common stock only, whereas a holder
who converted such share prior to the Common Stock Fundamental Change would have
received consideration in the form of such common stock as well as any other
securities or assets (which may include cash) issuable upon conversion of such
Debenture immediately prior to such Common Stock Fundamental Change.
The term "Applicable Price" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a holder of one share of the Common Stock and
(ii) in the event of any other Fundamental Change, the average of the daily
Closing Price for one share of the Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the holders of the
Common Stock entitled to receive cash, securities, property or other assets in
connection with such Fundamental Change or, if there is no such record date,
prior to the date upon which the holders of the Common Stock shall have the
right to receive such cash, securities, property or other assets.
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<PAGE> 21
The term "Closing Price" of any common stock on any day shall mean the last
recorded sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of such common stock, in each case on the New York Stock Exchange Composite
Tape or, if the common stock is not listed or admitted to trading on such
exchange, on the principal national securities exchange on which such common
stock is listed or admitted to trading, or, if not listed or admitted to trading
on any national securities exchange, the average of the closing bid and asked
prices as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors of the Company for that purpose or, if
not so available in such manner, as otherwise determined in good faith by the
Board of Directors of the Company.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of the Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Debentures continue to exist as outstanding Debentures or (ii)
not later than the occurrence of such Fundamental Change, the outstanding
Debentures are converted into or exchanged for debentures of a corporation
succeeding to the business of the Company, which debentures have terms
substantially similar to those of the Debentures.
The term "Fundamental Change" means the occurrence of any transaction or
event or series of transactions or events pursuant to which all or substantially
all of the Common Stock shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the conversion price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Stock shall have been exchange for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of the Common Stock received in the transaction or event as a result of
which more than 50% of the Common Stock shall have been exchanged for, converted
into or acquired for, or shall constitute solely the right to receive, such
cash, securities, property or other assets.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of the Common Stock in such Common Stock
Fundamental Change during the 10 Trading Days immediately prior to the date
fixed for the determination of the holders of the Common Stock entitled to
receive such common stock or, if there is no such date, prior to the date upon
which the holders of the Common Stock shall have the right to receive such
common stock.
The term "Reference Market Price" shall initially mean $43.00 (which is an
amount equal to 66.67% of the reported last sale price for the Common Stock on
the NYSE on October 28, 1997) and, in the event of any adjustment to the
conversion price other than as a result of a Fundamental Change, the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the conversion price after giving effect to any such adjustment shall
always be the same as the ratio of the initial Reference Market Price to the
initial conversion price of $80.00 per share.
The term "Trading Day" means a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
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<PAGE> 22
OPTIONAL REDEMPTION BY THE COMPANY
The Company shall have the right to redeem the Debentures, in whole or in
part, from time to time, on or after November 4, 2000 (the "Redemption Date"),
upon not less than 30 nor more than 60 days notice, at the following prices
(expressed as percentages of the principal amount of the Debentures) together
with accrued and unpaid interest, including Compound Interest to, but excluding,
the redemption date, if redeemed during the 12-month period beginning November
1:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2000........................................................ 103.5%
2001........................................................ 103.0
2002........................................................ 102.5
2003........................................................ 102.0
2004........................................................ 101.5
2005........................................................ 101.0
2006........................................................ 100.5
On or after November 1, 2007................................ 100.0
</TABLE>
If Debentures are redeemed on any February 1, May 1, August 1, or November
1, accrued and unpaid interest shall be payable to holders of record on the
relevant record date.
If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures to be redeemed in principal amounts of $50
or multiples thereof by lot, pro rata or by another method the Trustee considers
fair and appropriate. If a portion of a holder's Debentures is selected for
partial redemption and such holder converts a portion of such Debentures, such
converted portion shall be deemed to be of the portion selected for redemption.
SUBORDINATION OF DEBENTURES
The Indenture provides that the Debentures are subordinated and junior in
right of payment to all Senior Indebtedness of the Company. No payment of
principal (including redemption payments, if any), premium, if any, or interest
on the Debentures may be made (i) if any Senior Indebtedness of the Company is
not paid when due and any applicable grace period with respect to such default
has ended and such default has not been cured or waived or ceased to exist or
(ii) if the maturity of any Senior Indebtedness of the Company has been
accelerated because of a default. The Company also may not make any payment upon
or in respect of the Debentures if any nonpayment default occurs and is
continuing with respect to certain Designated Senior Indebtedness that permits
the lenders to accelerate the maturity of the loans made thereunder and the
Trustee receives a Payment Blockage Notice from the Company or other person
permitted to give such notice under the Indenture. Payments on the Debentures
may and shall be resumed (a) in case of a payment default, upon the date on
which such default is cured or waived and (b) in case of a nonpayment default,
the earlier of the date on which such nonpayment default is cured or waived or
ceases to exist or 179 days after the date on which the applicable Payment
Blockage Notice is received if the maturity of the Designated Senior
Indebtedness has not been accelerated. No new period of payment blockage may be
commenced pursuant to a Payment Blockage Notice unless and until (i) 365 days
have elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal, premium, if any,
and interest on the Debentures that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.
Upon any distribution of assets of the Company to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all principal, premium, if any, and interest due or to become due on all Senior
Indebtedness of the Company must be paid in full before the holders of
Debentures are entitled to receive or retain any payment. Upon satisfaction of
all claims of all Senior Indebtedness then outstanding, the rights of the
holders of the Debentures will be subrogated to the rights of the holders of
Senior Indebtedness of the Company to
21
<PAGE> 23
receive payments or distributions applicable to Senior Indebtedness until all
amounts owing on the Debentures are paid in full.
By reason of the subordination provisions described above, in the event of
the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and holders of the Debentures may
receive less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of Default under the
Indenture.
The term "Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company, for money borrowed under any credit agreements, notes, guarantees or
similar documents and (B) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company, (ii) all capital lease
obligations of the Company, (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement on any letter of credit, bankers' acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the Company
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreements, hedge transactions or other similar instruments or agreements
or foreign currency hedge, exchange, purchase or similar instruments or
agreements, (vi) all obligations of the types referred to in clauses (i) through
(v) above of other persons for the payment of which the Company is responsible
or liable as obligor, guarantor or otherwise and (vii) all obligations of the
types referred to in clauses (i) through (vi) above of other persons secured by
any lien on any property or asset of the Company (whether or not such obligation
is assumed by the Company), whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the
Company, except for any such indebtedness that is by its terms subordinated to
or pari passu with the Debentures and any indebtedness between the Company and
its Affiliates. Such Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the benefits of the subordination provisions
irrespective of any deferrals, renewals, extensions or refundings of, or
amendments, modifications, supplements or waivers of any term of such Senior
Indebtedness.
The term "Designated Senior Indebtedness" shall mean the Company's
principal bank credit facility and any other Senior Indebtedness of the Company
so designated at the time of incurrence thereof.
The Indenture will not limit the amount of additional Senior Indebtedness
which the Company can create, incur, assume or guarantee, nor will the Indenture
limit the amount of indebtedness or liabilities which any subsidiary can create,
incur, assume or guarantee. At March 31, 1998, the Company had approximately
$325.5 million of outstanding Senior Indebtedness consisting of indebtedness
under the Company's working capital facilities, 7 1/4% Notes due 2006 and
accrued interest and approximately $108.3 million (excluding intercompany
obligations) of borrowings under working capital facilities and other
indebtedness and liabilities with respect to the Company's subsidiaries.
In the event that, notwithstanding the foregoing, the Trustee or any holder
of the Debentures receives any payment or distribution of assets of the Company
or any kind in contravention of any of the subordination provisions of the
Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Debentures before
all Senior Indebtedness is paid in full, then such payment or distribution will
be held by the recipient in trust for the benefit of holders of Senior
Indebtedness or their representatives to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution, or provision therefor, to or for the holders
of Senior Indebtedness.
The Company is obligated to pay reasonable compensation to the Trustee and
to indemnify the Trustee against certain losses, liabilities or expenses
incurred by it in connection with its duties relating to the Debentures. The
Trustee's claims for such payments generally are senior to those of holders of
the Debentures in respect of all funds collected or held by the Trustee.
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EVENTS OF DEFAULT; NOTICE AND WAIVER
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Debentures: (i) failure for 30 days to pay interest on the
Debentures, including any Compound Interest in respect thereof, when due;
provided that a valid extension of an interest payment period will not
constitute a default in the payment of interest (including any Compound
Interest) for this purpose; or (ii) failure to pay principal of or premium, if
any, on the Debentures when due whether at maturity, upon redemption, by
declaration or otherwise; or (iii) failure by the Company to convert the
Debentures as required; or (iv) failure to observe or perform any other covenant
contained in the Indenture for 90 days after notice to the Company by the
Trustee or by the holders of not less than 25% in aggregate outstanding
principal amount of the Debentures; or (v) certain events in bankruptcy,
insolvency or reorganization of the Company.
If any Event of Default shall occur and be continuing, the Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Debentures, will have the right to declare the principal of and the interest on
the Debentures (including any Compound Interest, if any) and any other amounts
payable under the Indenture to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Debentures. In the case of
certain events of bankruptcy or insolvency, the principal of, premium, if any,
and interest on the Debentures shall automatically become and be immediately due
and payable. However, if the Company cures all defaults (except the nonpayment
of principal of, premium, if any, and interest on any of the Debentures which
shall have become due by acceleration) and certain other conditions are met,
with certain exceptions, such declaration may be canceled and past defaults may
be waived by the holders of a majority of the principal amount of the Debentures
then outstanding.
The Indenture contains provisions permitting the holders of a majority in
aggregate principal amount of the Debentures, on behalf of all of the holders of
the Debentures, to waive any past default in the performance of any of the
covenants contained in the Indenture, except a default in the payment of the
principal of or premium, if any, or interest on any of the Debentures.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the outstanding Debentures, to modify the Indenture or the
rights of the holders of Debentures; provided, however, that no such
modification may, without the consent of the holder of each outstanding
Debenture affected thereby, among other things, (i) extend the stated maturity
of the Debentures or reduce the principal amount thereof, or reduce the rate or
extend the time for payment of interest thereon, or reduce any premium payable
upon the redemption thereof, or adversely affect the right to convert Debentures
or the subordination provisions of the Indenture; or (ii) reduce the percentage
in aggregate principal amount of outstanding Debentures, the holders of which
are required to consent to any such supplemental indenture.
In addition, the Company and the Trustee may execute, without the consent
of any holder of Debentures, any supplemental indenture to cure any ambiguities,
comply with the Trust Indenture Act and for certain other customary purposes.
REGISTRATION RIGHTS
The Company entered into the Registration Rights Agreement with the Initial
Purchasers pursuant to which the Company, at its expense, for the benefit of the
holders, has filed with the Commission the Registration Statement, of which this
Prospectus forms a part, covering the resale of the Debentures and the Shares.
The Company has agreed to use reasonable efforts to cause the Registration
Statement to become effective promptly and to keep the Registration Statement
effective until the earlier of (i) the sale pursuant to the Registration
Statement or Rule 144 under the Securities Act of all the Debentures and the
Shares and (ii) the expiration of the holding period applicable to sales of such
securities under Rule 144(k) under the Securities Act, or any successor
provision. Under certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events, the Company
is permitted to suspend
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the use of this Prospectus which is a part of the Registration Statement for a
period not to exceed 30 days in any three month period (or an additional 30 days
if it gives a second notice during such 30 day period) and not to exceed an
aggregate of 60 days in any 12-month period. The Company has agreed to pay
predetermined liquidated damages to Selling Securityholders of Debentures and
the Shares who have requested to sell such securities pursuant to the
Registration Statement if the Commission issues a stay order suspending the
effectiveness of the Registration Statement or if this Prospectus is unavailable
for periods in excess of those permitted above until such time as the stay order
is removed or this Prospectus is again made available. The Company has further
agreed, if such unavailability continues for an additional 30-day period, to pay
such predetermined liquidated damages to all holders of Debentures and Shares,
whether or not any such holder has requested to sell such securities pursuant to
the Registration Statement, until such time as this Prospectus is again made
available. A Selling Securityholder who sells Debentures or Shares pursuant to
the Registration Statement generally will be required to be named as a Selling
Securityholder in this Prospectus, deliver this Prospectus to purchasers and be
bound by those provisions of the Registration Rights Agreement that are
applicable to such holder (including indemnification provisions).
The Company will pay all expenses of the Registration Statement, provide to
each Selling Securityholder copies of this Prospectus, notify each Selling
Securityholder when the Registration Statement has become effective and take
certain other actions as are required to permit, subject to the foregoing,
unrestricted resales of the Debentures or the Shares.
The shares of Common Stock issuable upon conversion of the Debentures have
been approved for listed on the NYSE, subject to official notice of issuance.
The summary herein of certain provisions of the Registration Rights
Agreement is subject to, and is qualified in its entirety by reference to, all
the provisions of the Registration Rights Agreement, a copy of which is
available upon request to the Company or the Initial Purchasers and has been
filed as an exhibit to the Registration Statement.
INFORMATION CONCERNING THE TRUSTEE
The Chase Manhattan Bank, as Trustee under the Indenture, has been
appointed by the Company as paying agent, Conversion Agent, registrar and
custodian with regard to the Debentures.
The Trustee, prior to default, has undertaken to perform only such duties
as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Trustee is
under no obligation to exercise any of the powers vested in it by the Indenture
at the request of any holder of Debentures, unless offered reasonable indemnity
by such holder against the costs, expenses and liabilities which might be
incurred thereby. The Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
The Indenture also contains limitations on the right of the Trustee, as 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. In addition, the Trustee may be deemed to have a conflicting interest
and may be required to resign as Trustee if at the time of a default under the
Indenture it is a creditor of the Company. The Company may from time to time
maintain deposit accounts and conduct its banking transactions with the Trustee
in the ordinary course of business.
GOVERNING LAW
The Indenture and the Debentures are governed by, and construed in
accordance with, the internal laws of the State of New York.
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<PAGE> 26
MISCELLANEOUS
The Indenture provides that the Company will pay all fees and expenses
related to the enforcement by the Trustee of the rights of the holders of the
Debentures. The payment of such fees and expenses will be fully and
unconditionally guaranteed by the Company.
The Company has the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly owned
subsidiary of the Company; provided that, in the event of any such assignment,
the Company will remain liable for all of their respective obligations. Subject
to the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 250,000,000 shares of
Common Stock, par value $1.00 per share, and 3,000,000 shares of Preferred
Stock, par value $1.00 per share ("Preferred Stock"). At June 22, 1998,
96,966,877 shares of Common Stock were outstanding, including (i) 50,228 shares
of Common Stock remaining to be exchanged for shares of common stock of GulfMark
International, Inc. ("GulfMark") in connection with the Company's prior
acquisition of GulfMark, (ii) 7,381 shares of Common Stock remaining to be
exchanged for common shares of Taro Industries Limited ("Taro") in connection
with the Company's prior acquisition of Taro and (iii) 1,990,095 shares of
Common Stock remaining to be exchanged for shares of common stock of Weatherford
in connection with the Merger. In addition, at June 22, 1998, there were (i)
5,031,250 shares of Common Stock reserved for issuance upon the conversion of
the Debentures, (ii) 3,900,000 shares of Common Stock reserved for issuance
pursuant to the proposed Christiana Acquisition (see "The Company -- Recent
Developments -- Christiana Acquisition") and (iii) shares of Common
Stock reserved for issuance pursuant to various benefit plans of the Company and
its subsidiaries, of which shares of Common Stock were reserved for
issuance upon the exercise of outstanding options and awards. At June 22, 1998,
there were no shares of Preferred Stock issued or outstanding. The holders of
shares of Common Stock are not liable to further calls or assessments by the
Company. The description below is a summary of and is qualified in its entirety
by the provisions of the Company's Amended and Restated Certificate of
Incorporation as currently in effect.
Subject to the rights of the holders of any outstanding shares of Preferred
Stock and those rights provided by law, (i) dividends may be declared and paid
or set apart for payment upon the Common Stock out of any assets or funds of the
Company legally available for the payment of dividends and may be payable in
cash, stock or otherwise, (ii) the holders of Common Stock have the exclusive
right to vote for the election of directors and, except as provided below, on
all other matters requiring stockholder action generally, with each share being
entitled to one vote and (iii) upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company, the net assets of the Company will be
distributed pro rata to the holders of the Common Stock in accordance with their
respective rights and interests to the exclusion of the holders of any
outstanding shares of Preferred Stock.
Although the holders of the Common Stock are generally entitled to vote for
the approval of amendments to the Company's Amended and Restated Certificate of
Incorporation, the voting rights of the holders of the Common Stock are limited
with respect to certain amendments to the Company's Amended and Restated
Certificate of Incorporation that affect only the holders of the Preferred
Stock. Specifically, subject to the rights of any outstanding shares of any
series of Preferred Stock, the Company's Amended and Restated Certificate of
Incorporation provides that it may be amended from time to time in any manner
that would solely modify or change the relative powers, preferences and rights
and the qualifications or restrictions of any issued shares of any series of
Preferred Stock then outstanding with the only required vote or consent for
approval of such amendment being the affirmative vote or consent of the holders
of a majority of the outstanding shares of the series of Preferred Stock so
affected, provided that the powers, preferences and rights and the
qualifications and limitations or restrictions of such series after giving
effect to such amendment are no greater than the powers, preferences and rights
and qualifications and limitations or restrictions permitted to
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be fixed and determined by the Board of Directors with respect to the
establishment of any new series of shares of Preferred Stock pursuant to the
authority vested in the Board of Directors as to such matters.
Holders of the Common Stock do not have any cumulative voting, redemptive
or conversion rights and have no preemptive rights to subscribe for, purchase or
receive any class of shares or securities of the Company. Holders of the Common
Stock have no fixed dividend rights. Dividends may be declared by the Board of
Directors at its discretion depending on various factors, although no dividends
are anticipated for the foreseeable future.
The Preferred Stock may be issued from time to time in one or more series,
with each such series having such powers, preferences and rights and
qualifications and limitations or restrictions as may be fixed by the Company's
Board of Directors pursuant to the resolution or resolutions providing for the
issuance of such series.
Under Delaware law, a corporation may include provisions in its certificate
of incorporation that will relieve its directors of monetary liability for
breaches of their fiduciary duty to the corporation, except under certain
circumstances, including a breach of the director's duty of loyalty, acts or
omissions of the director not in good faith or which involve intentional
misconduct or a knowing violation of law, the approval of an improper payment of
a dividend or an improper purchase by the Company of stock or any transaction
from which the director derived an improper personal benefit. The Company's
Amended and Restated Certificate of Incorporation provides that the Company's
directors are not liable to the Company or its stockholders for monetary damages
for breach of their fiduciary duty, subject to the above described exceptions
specified by Delaware law.
As a Delaware corporation, 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 a person owning 15% or more of
a corporation's outstanding voting stock) from engaging in a "business
combination" (as defined) with a Delaware corporation for three years following
the time such person became 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 stockholder becoming an
interested stockholder, the interested stockholder owns 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 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 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 during the previous three years or who became an
interested stockholder with the approval of a majority of the corporation's
directors, if such extraordinary transaction is approved or not opposed by a
majority of the directors who were directors prior to any person becoming an
interested stockholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors.
The Registrar and Transfer Agent for the Company Common Stock is American
Stock Transfer and Trust Company, New York, New York.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of certain material United States federal income
tax consequences pertaining to the purchase, ownership, disposition, and
conversion of Debentures. Unless otherwise stated, this summary deals only with
Debentures held as capital assets by holders who purchased the securities upon
original issuance. This summary does not deal with special classes of holders
such as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors, or persons which hold the Debentures as other than a capital asset.
This summary does not address the tax consequences to persons which have a
functional currency other than the U.S. Dollar or the tax consequences to
shareholders, partners, or beneficiaries of a holder of Debentures. Further,
this summary does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government which may be applicable to the Debentures. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
promulgated thereunder, and administrative and judicial interpretations thereof,
as of the date hereof, all of which are subject to change, possibly on a
retroactive basis.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Because the Company has the option, under the terms of the Debentures, to
defer payments of stated interest by extending interest payment periods for up
to 20 quarters, interest on the Debentures will be reportable as "original issue
discount". Holders of debt instruments issued with OID must include that
discount in income on an economic accrual basis regardless of their method of
tax accounting, and without regard to whether such accrual causes amounts to be
included in income prior to the receipt of cash attributable to the interest.
Generally, all of a holder's taxable interest income with respect to the
Debentures will be accounted for as OID. Actual payments of stated interest will
not, however, be separately reported as includable in taxable income. The amount
of OID which accrues on a Debenture in any quarter will approximately equal the
amount of the interest which accrues on the Debenture in that quarter at the
stated interest rate. In the event the interest payment period is extended,
holders will continue to accrue OID approximately equal to the amount of the
interest payment due at the end of the extended interest payment period on an
economic accrual basis over the length of the extended interest payment.
MARKET DISCOUNT
Subject to a de minimis exception, a holder of a Debenture acquired at a
market discount generally will be required to treat as ordinary income any gain
recognized on the disposition of the Debenture to the extent of the accrued
market discount on the Debenture at the time of disposition. For this purpose,
the market discount on a Debenture generally will be equal to the amount, if
any, by which the stated redemption price at maturity of the Debenture exceeds
the holder's tax basis in the Debenture immediately after its acquisition. In
general, market discount on a Debenture will be treated as accruing on a ratable
basis over the term of the Debenture or, at the election of the holder, under a
constant yield method. A holder of a Debenture acquired at a market discount may
also be required to defer the deduction of a portion of the interest on any
indebtedness incurred or maintained to purchase or carry the Debenture until the
Debenture is disposed of in a taxable transaction. The foregoing rules will not
apply if the holder elects to include accrued market discount in income
currently. If a holder acquires a Debenture at a market discount and receives
Common Stock upon conversion of the Debenture, the amount of accrued market
discount with respect to the Debenture through the date of the conversion should
be treated, under regulations to be issued by the Treasury Department, as
ordinary income on the disposition of the Common Stock.
BOND PREMIUM
A holder that purchases a Debenture for an amount in excess of its
principal amount may be entitled to elect to treat a portion of such excess as
"amortizable bond premium," which will reduce the amount required to be included
in the holder's income each year as interest on the Debenture by the amount of
such premium
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allocable to that year based on the Debenture's yield to maturity. However, the
value of the conversion feature of the Debentures at the time of purchase by the
holder thereof would be subtracted from the cost of the Debenture in determining
the amount of any amortizable bond premium. An election to amortize bond premium
would apply to all debt instruments held by the holder at the beginning of the
taxable year to which the election applies or thereafter acquired by the holder.
SALES, EXCHANGES OR RETIREMENTS OF DEBENTURES
Upon the sale, exchange, redemption, retirement at maturity or other
disposition (other than a conversion) of a Debenture, the holder thereof will
recognize gain or loss equal to the difference between the amount realized on
such disposition of the Debenture and the holder's adjusted tax basis in such
Debenture. A holder's adjusted tax basis in the Debenture generally will be
equal to its initial purchase price increased by OID previously includable in
such holder's gross income to the date of disposition and decreased by payments
received on the Debenture to the date of disposition. Such gain or loss will be
a capital gain or loss and will be long-term gain or loss if the Debenture has
been held for more than 18 months at the time of sale. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income.
The Debentures may trade at a price which does not accurately reflect the
value of accrued but unpaid interest thereon. A holder which disposes of its
Debentures between record dates for payments thereon will be required to include
in its income, as ordinary income, the accrued but unpaid interest on the
Debentures through the date of disposition, and to add such amount to its
adjusted tax basis in the Debentures to be disposed.
CERTAIN NON-U.S. HOLDERS
For purposes of this discussion, the term "Non-U.S. Holder" refers to any
corporation, individual, partnership, estate or trust which is, for United
States tax purposes, treated as a foreign corporation, a non-resident alien
individual, a foreign partnership or a non-resident fiduciary of a foreign
estate or trust.
Under present United States federal income tax law, interest on the
Debentures, including OID, will generally be classified as "portfolio interest"
to a Non-U.S. Holder of a Debenture provided such interest is not effectively
connected with the conduct of a trade or business within the United States by
the holder. As a result, payments of stated interest to any holder of a
Debenture which is a Non-U.S. Holder will not be subject to withholding of
United States federal income tax provided:
(a) the beneficial owner of the Debenture does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, which ownership is
determined after the application of certain attribution rules;
(b) the beneficial owner of the Debenture is not a controlled foreign
corporation which is related to the Company through stock ownership; and
(c) either (i) the beneficial owner of the Debenture or (ii) a
securities clearing organization, a bank or other financial institution
which holds customers' securities in the ordinary course of its trade or
business and which holds the Debenture in such capacity certifies to the
Company or its agent, under penalties of perjury, that it is not a United
States person, or in the case of an individual, is neither a citizen nor a
resident of the United States, and provides the owner's name and address to
the Company or its agent.
If a Non-U.S. Holder is treated as receiving a deemed dividend as a result
of an adjustment of the conversion price of the Debentures, as described below
under the heading "Adjustment of Conversion Price", such deemed dividend will be
subject to United States federal withholding tax at a 30% (or lower treaty)
rate.
CONVERSION OF DEBENTURES INTO COMMON STOCK
A holder will not recognize gain or loss upon the conversion of Debentures
into Common Stock. A holder will, however, recognize gain upon the receipt of
cash in lieu of a fractional share of Common Stock equal to
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the amount of cash received less the holder's tax basis in such fractional
share. A holder's tax basis in the Common Stock received upon conversion should
generally be equal to the holder's tax basis in the Debentures converted less
the basis allocated to any fractional share for which cash is received, and a
holder's holding period in the Common Stock received upon conversion should
generally begin on the date the holder acquired the Debentures converted.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Debentures as having received a constructive distribution from the
Company in the event the conversion ratio of the Debentures is adjusted if (i)
as a result of such adjustment, the proportionate interest (measured by the
number of shares of Common Stock into which the Debentures are convertible) of
the holder's Debentures in the assets or earnings and profits of the Company is
increased and (ii) the adjustment is not made pursuant to a bona fide,
reasonable, antidilution formula. An adjustment in the conversion ratio would
not be considered made pursuant to such formula if the adjustment were made to
compensate for certain taxable distributions with respect to the Common Stock.
Thus, under certain circumstances, a reduction in the conversion price of the
Debentures may result in deemed dividend income to holders thereof to the extent
of the current or accumulated earnings and profits of the Company. Holders of
the Debentures would be required to include their allocable share of such deemed
dividend income in gross income but would not receive any cash related thereto.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Generally, income on the Debentures will be reported to holders on Forms
1099, which forms should be mailed to holders of Debentures by January 31
following each calendar year. Payments made on, and proceeds from the sale of,
the Debentures may be subject to a "backup" withholding tax of 31% unless the
holder complies with certain identification requirements. Any withheld amounts
will be allowed as a credit against the holder's United States federal income
tax, provided the required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP, DISPOSITION AND
CONVERSION OF THE DEBENTURES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
LEGAL MATTERS
The validity of the issuance of the Debentures offered hereby and the
Shares issuable upon conversion of the Debentures have been passed upon for the
Company by Fulbright & Jaworski L.L.P., Houston, Texas. Uriel E. Dutton, a
former director of the Company, is a partner of Fulbright & Jaworski L.L.P. Mr.
Dutton currently holds options to purchase 70,000 shares of Common Stock, which
options were granted to him pursuant to the Company's Amended and Restated
Non-Employee Director Stock Option Plan. In addition, Curtis W. Huff, who serves
as of Counsel at Fulbright & Jaworski L.L.P., is Senior Vice President, General
Counsel and Secretary of the Company and pursuant to an agreement with the
Company holds 75,000 restricted shares of Common Stock and options to purchase
100,000 shares of Common Stock.
EXPERTS
The Company's historical and supplemental restated consolidated financial
statements as of December 31, 1997 and 1996 and for each of the three years in
the period ended December 31, 1997, incorporated by reference into this
Prospectus and the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by
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reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
Weatherford's consolidated financial statements as of December 31, 1997 and
1996 and for each of the three years in the period ended December 31, 1997,
incorporated by reference in this Prospectus and the Registration Statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
Christiana's consolidated financial statements as of June 30, 1997 and 1996
and for each of the three years in the period ended June 30, 1997, included in
this Prospectus and the Registration Statement have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.
GulfMark Retained Assets' financial statements as of December 31, 1996 and
1995, and for each of the three years in the period ended December 31, 1996,
incorporated by reference in this Prospectus and the Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
The consolidated financial statements of Trico Industries, Inc. as of and
for the years ended December 31, 1996 and 1995 appearing in the Company's
Amendment No. 1 to Form 8-K dated December 2, 1997 on Form 8-K/A, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The combined financial statements of BMW as of March 31, 1997 and 1996, and
for each of the two years in the period ended March 31, 1997, incorporated by
reference in this Prospectus and the Registration Statement have been audited by
Arthur Andersen & Co., independent chartered accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
30
<PAGE> 32
================================================================================
NO DEALER, SALESMAN OR ANY OTHER 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 BY THE COMPANY, THE SELLING
SECURITYHOLDER OR ANY UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SHARES BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. UNDER NO
CIRCUMSTANCES SHALL THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE PURSUANT TO
THIS PROSPECTUS CREATE ANY IMPLICATION THAT INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Forward-Looking Statements............ 3
Risk Factors.......................... 4
The Company........................... 6
Ratio of Earnings to Fixed Charges.... 7
Use of Proceeds....................... 7
Selling Securityholders............... 7
Plan of Distribution.................. 12
Description of Debentures............. 13
Description of Capital Stock.......... 25
Certain Federal Income Tax
Considerations...................... 27
Legal Matters......................... 29
Experts............................... 29
</TABLE>
================================================================================
================================================================================
[EVI LOGO]
EVI WEATHERFORD, INC.
8,050,000 5% CONVERTIBLE
SUBORDINATED PREFERRED
EQUIVALENT DEBENTURES DUE 2027
5,031,250 SHARES
OF COMMON STOCK
--------------------
PROSPECTUS
--------------------
June , 1998
================================================================================
<PAGE> 33
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $118,738
New York Stock Exchange Listing Fee......................... 1,500
Printing and engraving expenses............................. 3,000
Legal Fees and Expenses..................................... 10,000
Accounting Fees and Expenses................................ 2,500
Blue Sky Fees and Expenses (including legal fees)........... 1,000
Miscellaneous............................................... 3,262
--------
Total............................................. $140,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Delaware law, a corporation may include provisions in its certificate
of incorporation that will relieve its directors of monetary liability for
breaches of their fiduciary duty to the corporation, except under certain
circumstances, including a breach of the director's duty of loyalty, acts or
omissions of the director not in good faith or which involve intentional
misconduct or a knowing violation of law, the approval of an improper payment of
a dividend or an improper purchase by the corporation of stock or any
transaction from which the director derived an improper personal benefit. The
Company's Restated Certificate of Incorporation provides that the Company's
directors are not liable to the Company or its stockholders for monetary damages
for breach of their fiduciary duty, subject to the described exceptions
specified by Delaware law.
Section 145 of the Delaware General Corporation Law grants to the Company
the power to indemnify each officer and director of the Company against
liabilities and expenses incurred by reason of the fact that he is or was an
officer or director of the Company 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 Company
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The By-laws of the Company provide for
indemnification of each officer and director of the Company to the fullest
extent permitted by Delaware law. David J. Butters and Robert B. Millard,
employees of Lehman Brothers Inc. ("Lehman"), constitute two of the eight
current members of the Board of Directors of the Company. Under the restated
certificates of incorporation, as amended to date, of Lehman and its parent,
Lehman Brothers Holdings Inc. ("Holdings"), both Delaware corporations, Messrs.
Butters and Millard, in their capacity as directors of the Company, are to be
indemnified by Lehman and Holdings to the fullest extent permitted by Delaware
law. Messrs. Butters and Millard are serving as directors of the Company at the
request of Lehman and Holdings.
Section 145 of the Delaware General Corporation Law also empowers the
Company to purchase and maintain insurance on behalf of any person who is or was
an officer or director of the Company against liability asserted against or
incurred by him in any such capacity, whether or not the Company would have the
power to indemnify such officer or director against such liability under the
provisions of Section 145. The Company has purchased and maintains a directors'
and officers' liability policy for such purposes. Messrs. Butters and Millard
are insured against certain liabilities which they may incur in their capacity
as directors pursuant to insurance maintained by Holdings.
II-1
<PAGE> 34
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
2.1 -- Agreement and Plan of Merger dated as of March 4, 1998,
by and between EVI, Inc. and Weatherford Enterra, Inc.
(incorporated by reference to Exhibit No. 2.1 to
Amendment No. 1 to Form 8-K on Form 8-K/A, File 1-13086,
filed March 9, 1998).
2.2 -- Amendment No. 1 dated as of April 17, 1998, to the
Agreement and Plan of Merger dated as of March 4, 1998,
by and between EVI, Inc. and Weatherford Enterra, Inc.
(incorporated by reference to Exhibit No. 2.2 to Form
8-K, File 1-13086, filed April 21, 1998).
2.3 -- Amendment No. 2 dated as of April 22, 1998, to the
Agreement and Plan of Merger dated as of March 4, 1998,
as amended, by and between EVI, Inc. and Weatherford
Enterra, Inc. (incorporated by reference to Exhibit No.
2.3 to Form 8-K, File 1-13086, filed April 23, 1998).
2.4 -- Share Purchase Agreement made and entered into as of
January 30, 1998, by and among the shareholders of Nika
Enterprises Ltd., an Alberta corporation, listed on the
signature pages thereto and EVI Oil Tools Canada Ltd., an
Alberta corporation (incorporated by reference to Exhibit
No. 2.1 to the Form 8-K, File 1-13086, filed March 3,
1998).
2.5 -- Agreement and Plan of Merger dated December 12, 1996, by
and among EVI, Inc., Christiana Acquisition, Inc.,
Christiana Companies, Inc. and C2, Inc. (incorporated by
reference to Exhibit No. 2.1 to Form 8-K, File 1-13086,
filed December 31, 1997).
2.6 -- Agreement dated December 12, 1997, by and among EVI,
Inc., Christiana Companies, Inc., Total Logistic Control
LLC and C2, Inc. (incorporated by reference to Exhibit
No. 2.2 to Form 8-K, File 1-13086, filed December 31,
1997).
2.7 -- Letter Agreement dated December 12, 1997, by and among
EVI, Inc., Christiana Acquisition, Inc., Christiana
Companies, Inc. and C2, Inc. (incorporated by reference
to Exhibit No. 2.3 to Form 8-K, File 1-13086, filed
December 31, 1997).
2.8 -- Amended and Restated Arrangement Agreement by and between
Taro Industries Limited, and EVI, Inc. and 756745 Alberta
Ltd. And 759572 Alberta Ltd. dated as of December 5, 1997
(incorporated by reference to Exhibit No. 2.4 to Form
8-K, File 1-13086, filed December 31, 1997).
2.9 -- Stock Purchase Agreement dated as of October 9, 1997,
between EVI, Inc. and PACCAR Inc. (incorporated by
reference to Exhibit No. 2.1 to Form 8-K, File 1-13086,
filed October 21, 1997).
2.10 -- Stock Purchase Agreement dated as of October 9, 1997,
among certain shareholders of BMW Monarch (Lloydminster)
Ltd., the shareholders of BMW Pump Inc., the shareholder
of Makelki Holdings Ltd., the shareholder of 589979
Alberta Ltd., the shareholders of 600969 Alberta Ltd.,
the shareholders of 391862 Alberta Ltd. and EVI, Inc.
(incorporated by reference to Exhibit No. 2.2 to Form
8-K, File 1-13086, filed October 21, 1997).
2.11 -- Agreement and Plan of Merger dated as of July 16, 1997,
as amended, by and among XLS Holding, Inc., EVI, Inc. and
GPXL, Inc. (incorporated by reference to Exhibit No. 2.1
to Form 8-K, File 1-13086, filed August 26, 1997).
2.12 -- Stock Purchase Agreement dated as of February 21, 1997,
among Seigo Arai, Kanematsu USA Inc. and Energy Ventures,
Inc. (incorporated by reference to Exhibit No. 2.1 to
Form 8-K, File 1-13086, filed March 17, 1997).
</TABLE>
II-2
<PAGE> 35
<TABLE>
<C> <S>
2.13 -- Agreement and Plan of Merger dated as of December 5, 1996, among Energy Ventures, Inc.,
GulfMark Acquisition Co., GulfMark International, Inc. and New GulfMark International,
Inc. (incorporated by reference to Exhibit No. 2.2 to Form 8-K, File 1-13086, filed
December 26, 1996).
2.14 -- Agreement and Plan of Distribution dated as of December 5, 1996, by and among GulfMark
International, Inc., New GulfMark International, Inc. and Energy Ventures, Inc.
(incorporated by reference to Exhibit No. 2.3 to Form 8-K, File 1-13086, filed December
26, 1996).
2.15 -- First Amendment to Agreement and Plan of Merger dated as of March 27, 1997, by and
among Energy Ventures, Inc., GulfMark Acquisition Co., GulfMark International, Inc. and
GulfMark Offshore, Inc. (incorporated by reference to Exhibit No. 2.3 to the
Registration Statement on Form S-4 (Reg. No. 333-24133)).
2.16 -- Stock Purchase Agreement dated as of September 14, 1996, by and among Parker Drilling
Company and Energy Ventures, Inc. (incorporated by reference to Exhibit 2.1 to Form
8-K, File 1-13086, filed October 3, 1996).
2.17 -- Agreement and Plan of Merger dated as of June 20, 1996 between Energy Ventures, Inc.,
TCA Acquisition, Inc. and Tubular Corporation of America (incorporated by reference to
Exhibit No. 2.1 to Form 8-K, File 1-13086, filed June 24, 1996).
4.1 -- Amended and Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1 to Form 8-K, File 1-13086, dated June 2, 1998).
4.2 -- Amended and Restated By-laws of the Company (incorporated by reference to Exhibit No.
3.2 to Form 8-K, File 1-13086, filed June 2, 1998).
4.3 -- Amended and Restated Credit Agreement dated as of May 27, 1998, among EVI Weatherford,
Inc., EVI Oil Tools Canada Ltd., Chase Bank of Texas, National Association, as U.S.
Administrative Agent, The Bank of Nova Scotia, as Documentation Agent and Canadian
Agent, ABN AMRO Bank, N.V., as Syndication Agent, and the other Lenders defined
therein, including the forms of Notes (incorporated by reference to Exhibit No. 4.1 to
the Form 8-K, File 1-13086, filed June 15, 1998).
4.4 -- Indenture dated March 15, 1994, among Energy Ventures, Inc., as Issuer, the Subsidiary
Guarantors party thereto, as Guarantors, and Chemical Bank, as Trustee (incorporated by
reference to Form 8-K, File 1-13086, filed April 5, 1994).
4.5 -- Specimen 10 1/4% Senior Note due 2004 of Energy Ventures, Inc. (incorporated by
reference to Form 8-K, File 1-13086, filed April 5, 1994).
4.6 -- First Supplemental Indenture by and among Energy Ventures, Inc., Prideco and Chemical
Bank, as trustee, dated June 30, 1995 (incorporated by reference to Exhibit No. 4.4 to
the Registration Statement on Form S-3; Registration No. 33-61933).
4.7 -- Second Supplemental Indenture by and among Energy Ventures, Inc., EVI Arrow, Inc., EVI
Watson, Inc. and The Chase Manhattan Bank, as trustee, dated effective as of December
6, 1996 (incorporated by reference to Exhibit 4.6 to Form 10-K, File 1-13086, filed
March 20, 1997).
4.8 -- Third Supplemental Indenture by and among EVI, Inc., Ercon, Inc. and The Chase
Manhattan Bank, as trustee, dated effective as of May 1, 1997 (incorporated by
reference to Exhibit 99.2 to Form 8-K, File 1-13086, filed October 27, 1997).
</TABLE>
II-3
<PAGE> 36
<TABLE>
<C> <S>
4.9 -- Fourth Supplemental Indenture by and among EVI, Inc., XLS
Holding, Inc., XL Systems, Inc. and The Chase Manhattan
Bank, as trustee, dated effective as of August 25, 1997
(incorporated by reference to Exhibit 99.3 to Form 8-K,
File 1-13086, filed October 27, 1997).
4.10 -- Fifth Supplemental Indenture by and between EVI, Inc. and
The Chase Manhattan Bank dated as of December 12, 1997
(including the Form of Note and Form of Exchange Note)
(incorporated by reference to Exhibit 4.1 to Form 8-K,
File 1-13086, filed December 31, 1997).
4.11 -- Indenture dated as of October 15, 1997, between EVI, Inc.
and The Chase Manhattan Bank, as Trustee (incorporated by
reference to Exhibit No. 4.13 to the Registration
Statement on Form S-3 (Reg. No. 333-45207)).
4.12 -- First Supplemental Indenture dated as of October 28,
1997, between EVI, Inc. and The Chase Manhattan Bank, as
Trustee (including form of Debenture) (incorporated by
reference to Exhibit 4.2 to Form 8-K, File 1-13086, filed
November 5, 1997).
4.13 -- Registration Rights Agreement dated November 3, 1997, by
and among EVI, Inc., Morgan Stanley & Co. Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation,
Credit Suisse First Boston Corporation, Lehman Brothers
Inc., Prudential Securities Incorporated and Schroder &
Co. Inc. (incorporated by reference to Exhibit 4.3 to
Form 8-K, File 1-13086, filed November 5, 1997).
4.14 -- Indenture dated May 17, 1996, between Weatherford
Enterra, Inc. and Bank of Montreal Trust Company, as
Trustee (incorporated by reference to Exhibit 4.1 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K,
File No. 1-7867, dated May 28, 1996).
4.15 -- First Supplemental Indenture dated and effective as of
May 27, 1998, by and among EVI Weatherford, Inc., the
successor by merger to Weatherford Enterra, Inc., and
Bank of Montreal Trust Company, as Trustee (incorporated
by reference to Exhibit No. 4.1 to Form 8-K, File
1-13086, filed June 2, 1998).
4.16 -- Form of Weatherford Enterra, Inc.'s 7 1/4% Notes Due May
15, 2006 (incorporated by reference to Exhibit 4.2 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K,
File No. 1-7867, dated May 28, 1996).
+5.1 -- Opinion of Fulbright & Jaworski L.L.P.
*12.1 -- Statement re: calculation of ratio of earnings to fixed
charges.
+23.1 -- Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1).
+23.2 -- Consent of Arthur Andersen LLP, with respect to the
financial statements of EVI Weatherford, Inc.
+24.1 -- Powers of Attorney from certain members of the Board of
Directors of the Company (contained on page II-5).
+25.1 -- Statement of Eligibility of the Trustee on Form T-1.
</TABLE>
- ---------------
+ Previously filed.
* Filed herewith.
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has
not filed with this Registration Statement certain instruments defining the
rights of holders of long-term debt of the Company and its subsidiaries because
the total amount of securities authorized under any of such instruments does not
exceed 10% of the total assets of the Company and its subsidiaries on a
consolidated basis. The Company agrees to furnish a copy of any such agreement
to the Commission upon request.
II-4
<PAGE> 37
ITEM 17. UNDERTAKINGS.
The undersigned Company 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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(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 Company hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the Securities Act or otherwise, the Company 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. If a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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 Company 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.
II-5
<PAGE> 38
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 June 23, 1998.
EVI WEATHERFORD, INC.
By: /s/ BERNARD J. DUROC-DANNER
----------------------------------
Bernard J. Duroc-Danner
President, Chief Executive
Officer, Chairman of the Board
and Director (Principal
Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BERNARD J. DUROC-DANNER President, Chief Executive June 23, 1998
- ----------------------------------------------------- Officer, Chairman of the Board
Bernard J. Duroc-Danner and Director (Principal
Executive Officer)
/s/ JAMES G. KILEY Senior Vice President and Chief June 23, 1998
- ----------------------------------------------------- Financial Officer (Principal
James G. Kiley Financial Officer)
/s/ FRANCES R. POWELL Vice President, Accounting and June 23, 1998
- ----------------------------------------------------- Controller (Principal
Frances R. Powell Accounting Officer)
/s/ DAVID J. BUTTERS* Director June 23, 1998
- -----------------------------------------------------
David J. Butters
/s/ SHELDON B. LUBAR* Director June 23, 1998
- -----------------------------------------------------
Sheldon B. Lubar
/s/ ROBERT B. MILLARD* Director June 23, 1998
- -----------------------------------------------------
Robert B. Millard
/s/ ROBERT A. RAYNE* Director June 23, 1998
- -----------------------------------------------------
Robert A. Rayne
Director
- -----------------------------------------------------
Philip Burguieres
Director
- -----------------------------------------------------
William E. Macaulay
Director
- -----------------------------------------------------
Robert K. Moses, Jr.
</TABLE>
*By: /s/ JAMES G. KILEY
-------------------------------
James G. Kiley
Pursuant to Power of Attorney
II-6
<PAGE> 39
INDEX TO EXHIBITS
<TABLE>
<C> <S>
2.1 -- Agreement and Plan of Merger dated as of March 4, 1998,
by and between EVI, Inc. and Weatherford Enterra, Inc.
(incorporated by reference to Exhibit No. 2.1 to
Amendment No. 1 to Form 8-K on Form 8-K/A, File 1-13086,
filed March 9, 1998).
2.2 -- Amendment No. 1 dated as of April 17, 1998, to the
Agreement and Plan of Merger dated as of March 4, 1998,
by and between EVI, Inc. and Weatherford Enterra, Inc.
(incorporated by reference to Exhibit No. 2.2 to Form
8-K, File 1-13086, filed April 21, 1998).
2.3 -- Amendment No. 2 dated as of April 22, 1998, to the
Agreement and Plan of Merger dated as of March 4, 1998,
as amended, by and between EVI, Inc. and Weatherford
Enterra, Inc. (incorporated by reference to Exhibit No.
2.3 to Form 8-K, File 1-13086, filed April 23, 1998).
2.4 -- Share Purchase Agreement made and entered into as of
January 30, 1998, by and among the shareholders of Nika
Enterprises Ltd., an Alberta corporation, listed on the
signature pages thereto and EVI Oil Tools Canada Ltd., an
Alberta corporation (incorporated by reference to Exhibit
No. 2.1 to the Form 8-K, File 1-13086, filed March 3,
1998).
2.5 -- Agreement and Plan of Merger dated December 12, 1996, by
and among EVI, Inc., Christiana Acquisition, Inc.,
Christiana Companies, Inc. and C2, Inc. (incorporated by
reference to Exhibit No. 2.1 to Form 8-K, File 1-13086,
filed December 31, 1997).
2.6 -- Agreement dated December 12, 1997, by and among EVI,
Inc., Christiana Companies, Inc., Total Logistic Control
LLC and C2, Inc. (incorporated by reference to Exhibit
No. 2.2 to Form 8-K, File 1-13086, filed December 31,
1997).
2.7 -- Letter Agreement dated December 12, 1997, by and among
EVI, Inc., Christiana Acquisition, Inc., Christiana
Companies, Inc. and C2, Inc. (incorporated by reference
to Exhibit No. 2.3 to Form 8-K, File 1-13086, filed
December 31, 1997).
2.8 -- Amended and Restated Arrangement Agreement by and between
Taro Industries Limited, and EVI, Inc. and 756745 Alberta
Ltd. And 759572 Alberta Ltd. dated as of December 5, 1997
(incorporated by reference to Exhibit No. 2.4 to Form
8-K, File 1-13086, filed December 31, 1997).
2.9 -- Stock Purchase Agreement dated as of October 9, 1997,
between EVI, Inc. and PACCAR Inc. (incorporated by
reference to Exhibit No. 2.1 to Form 8-K, File 1-13086,
filed October 21, 1997).
2.10 -- Stock Purchase Agreement dated as of October 9, 1997,
among certain shareholders of BMW Monarch (Lloydminster)
Ltd., the shareholders of BMW Pump Inc., the shareholder
of Makelki Holdings Ltd., the shareholder of 589979
Alberta Ltd., the shareholders of 600969 Alberta Ltd.,
the shareholders of 391862 Alberta Ltd. and EVI, Inc.
(incorporated by reference to Exhibit No. 2.2 to Form
8-K, File 1-13086, filed October 21, 1997).
2.11 -- Agreement and Plan of Merger dated as of July 16, 1997,
as amended, by and among XLS Holding, Inc., EVI, Inc. and
GPXL, Inc. (incorporated by reference to Exhibit No. 2.1
to Form 8-K, File 1-13086, filed August 26, 1997).
2.12 -- Stock Purchase Agreement dated as of February 21, 1997,
among Seigo Arai, Kanematsu USA Inc. and Energy Ventures,
Inc. (incorporated by reference to Exhibit No. 2.1 to
Form 8-K, File 1-13086, filed March 17, 1997).
</TABLE>
<PAGE> 40
<TABLE>
<C> <S>
2.13 -- Agreement and Plan of Merger dated as of December 5, 1996, among Energy Ventures, Inc.,
GulfMark Acquisition Co., GulfMark International, Inc. and New GulfMark International,
Inc. (incorporated by reference to Exhibit No. 2.2 to Form 8-K, File 1-13086, filed
December 26, 1996).
2.14 -- Agreement and Plan of Distribution dated as of December 5, 1996, by and among GulfMark
International, Inc., New GulfMark International, Inc. and Energy Ventures, Inc.
(incorporated by reference to Exhibit No. 2.3 to Form 8-K, File 1-13086, filed December
26, 1996).
2.15 -- First Amendment to Agreement and Plan of Merger dated as of March 27, 1997, by and
among Energy Ventures, Inc., GulfMark Acquisition Co., GulfMark International, Inc. and
GulfMark Offshore, Inc. (incorporated by reference to Exhibit No. 2.3 to the
Registration Statement on Form S-4 (Reg. No. 333-24133)).
2.16 -- Stock Purchase Agreement dated as of September 14, 1996, by and among Parker Drilling
Company and Energy Ventures, Inc. (incorporated by reference to Exhibit 2.1 to Form
8-K, File 1-13086, filed October 3, 1996).
2.17 -- Agreement and Plan of Merger dated as of June 20, 1996 between Energy Ventures, Inc.,
TCA Acquisition, Inc. and Tubular Corporation of America (incorporated by reference to
Exhibit No. 2.1 to Form 8-K, File 1-13086, filed June 24, 1996).
4.1 -- Amended and Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1 to Form 8-K, File 1-13086, dated June 2, 1998).
4.2 -- Amended and Restated By-laws of the Company (incorporated by reference to Exhibit No.
3.2 to Form 8-K, File 1-13086, filed June 2, 1998).
4.3 -- Amended and Restated Credit Agreement dated as of May 27, 1998, among EVI Weatherford,
Inc., EVI Oil Tools Canada Ltd., Chase Bank of Texas, National Association, as U.S.
Administrative Agent, The Bank of Nova Scotia, as Documentation Agent and Canadian
Agent, ABN AMRO Bank, N.V., as Syndication Agent, and the other Lenders defined
therein, including the forms of Notes (incorporated by reference to Exhibit No. 4.1 to
the Form 8-K, File 1-13086, filed June 15, 1998).
4.4 -- Indenture dated March 15, 1994, among Energy Ventures, Inc., as Issuer, the Subsidiary
Guarantors party thereto, as Guarantors, and Chemical Bank, as Trustee (incorporated by
reference to Form 8-K, File 1-13086, filed April 5, 1994).
4.5 -- Specimen 10 1/4% Senior Note due 2004 of Energy Ventures, Inc. (incorporated by
reference to Form 8-K, File 1-13086, filed April 5, 1994).
4.6 -- First Supplemental Indenture by and among Energy Ventures, Inc., Prideco and Chemical
Bank, as trustee, dated June 30, 1995 (incorporated by reference to Exhibit No. 4.4 to
the Registration Statement on Form S-3; Registration No. 33-61933).
4.7 -- Second Supplemental Indenture by and among Energy Ventures, Inc., EVI Arrow, Inc., EVI
Watson, Inc. and The Chase Manhattan Bank, as trustee, dated effective as of December
6, 1996 (incorporated by reference to Exhibit 4.6 to Form 10-K, File 1-13086, filed
March 20, 1997).
4.8 -- Third Supplemental Indenture by and among EVI, Inc., Ercon, Inc. and The Chase
Manhattan Bank, as trustee, dated effective as of May 1, 1997 (incorporated by
reference to Exhibit 99.2 to Form 8-K, File 1-13086, filed October 27, 1997).
</TABLE>
<PAGE> 41
<TABLE>
<C> <S>
4.9 -- Fourth Supplemental Indenture by and among EVI, Inc., XLS
Holding, Inc., XL Systems, Inc. and The Chase Manhattan
Bank, as trustee, dated effective as of August 25, 1997
(incorporated by reference to Exhibit 99.3 to Form 8-K,
File 1-13086, filed October 27, 1997).
4.10 -- Fifth Supplemental Indenture by and between EVI, Inc. and
The Chase Manhattan Bank dated as of December 12, 1997
(including the Form of Note and Form of Exchange Note)
(incorporated by reference to Exhibit 4.1 to Form 8-K,
File 1-13086, filed December 31, 1997).
4.11 -- Indenture dated as of October 15, 1997, between EVI, Inc.
and The Chase Manhattan Bank, as Trustee (incorporated by
reference to Exhibit No. 4.13 to the Registration
Statement on Form S-3 (Reg. No. 333-45207)).
4.12 -- First Supplemental Indenture dated as of October 28,
1997, between EVI, Inc. and The Chase Manhattan Bank, as
Trustee (including form of Debenture) (incorporated by
reference to Exhibit 4.2 to Form 8-K, File 1-13086, filed
November 5, 1997).
4.13 -- Registration Rights Agreement dated November 3, 1997, by
and among EVI, Inc., Morgan Stanley & Co. Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation,
Credit Suisse First Boston Corporation, Lehman Brothers
Inc., Prudential Securities Incorporated and Schroder &
Co. Inc. (incorporated by reference to Exhibit 4.3 to
Form 8-K, File 1-13086, filed November 5, 1997).
4.14 -- Indenture dated May 17, 1996, between Weatherford
Enterra, Inc. and Bank of Montreal Trust Company, as
Trustee (incorporated by reference to Exhibit 4.1 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K,
File No. 1-7867, dated May 28, 1996).
4.15 -- First Supplemental Indenture dated and effective as of
May 27, 1998, by and among EVI Weatherford, Inc., the
successor by merger to Weatherford Enterra, Inc., and
Bank of Montreal Trust Company, as Trustee (incorporated
by reference to Exhibit No. 4.1 to Form 8-K, File
1-13086, filed June 2, 1998).
4.16 -- Form of Weatherford Enterra, Inc.'s 7 1/4% Notes Due May
15, 2006 (incorporated by reference to Exhibit 4.2 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K,
File No. 1-7867, dated May 28, 1996).
+5.1 -- Opinion of Fulbright & Jaworski L.L.P.
*12.1 -- Statement re: calculation of ratio of earnings to fixed
charges.
+23.1 -- Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1).
+23.2 -- Consent of Arthur Andersen LLP, with respect to the
financial statements of EVI Weatherford, Inc.
+24.1 -- Powers of Attorney from certain members of the Board of
Directors of the Company (contained on page II-5).
+25.1 -- Statement of Eligibility of the Trustee on Form T-1.
</TABLE>
- ---------------
+ Previously filed.
* Filed herewith.
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
TWELVE MONTHS ENDED DECEMBER 31, MARCH 31,
-------------------------------------------------------- --------------------
1993 1994 1995 1996 1997 1997 1998
------- ------- -------- -------- -------- -------- ---------
(in thousands, except ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from
continuing operations
before income taxes
and extraordinary items(a) $50,878 $50,217 $(12,752) $132,196 $303,679 $58,621 $ 97,917
Fixed charges:
Interest expense(b) 11,601 22,384 33,504 39,368 43,273 10,545 12,011
Interest factor
portion of rentals(c) 5,261 6,330 7,369 8,792 9,277 2,325 2,681
------- ------- ------- -------- -------- -------- --------
Total fixed charges 16,862 28,714 40,873 48,160 52,550 12,870 14,692
Earnings before income
taxes and fixed charges $67,740 $78,931 $28,121 $180,356 $356,229 $ 71,491 $112,609
======= ======= ======= ======== ======== ======== ========
Ratio of earnings to
fixed charges 4.02x 2.75x 0.69x(d) 3.74x 6.78x 5.55x 7.66x
======= ======= ======= ======== ======== ======== ========
</TABLE>
(a) Income (loss) from continuing operations before income taxes and
extraordinary items has been adjusted to include only distributed income of
less-than-fifty-percent-owned persons.
(b) Interest expense consists of interest expense incurred from continuing
operations and amortization of debt issuance costs.
(c) Interest factor portion of rentals is estimated to be one third of rental
expense.
(d) In 1995, earnings, as-defined, before fixed charges were inadequate to cover
fixed charges by $12.8 million.
