<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 6, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PARKER & PARSLEY PETROLEUM COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2570602
(State or other jurisdiction of (I.R.S. Employer Identification No.)
corporation or organization)
</TABLE>
303 WEST WALL, SUITE 101
MIDLAND, TEXAS 79701
915-683-4768
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
SCOTT D. SHEFFIELD
CHAIRMAN, PRESIDENT, AND CHIEF
EXECUTIVE OFFICER
PARKER & PARSLEY PETROLEUM COMPANY
303 WEST WALL, SUITE 101
MIDLAND, TEXAS 79701
915-683-4768
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
MARK L. WITHROW ROBERT L. KIMBALL
SENIOR VICE PRESIDENT, VINSON & ELKINS L.L.P.
GENERAL COUNSEL AND SECRETARY 3700 TRAMMELL CROW CENTER
PARKER & PARSLEY PETROLEUM COMPANY 2001 ROSS AVENUE
303 WEST WALL, SUITE 101 DALLAS, TEXAS 75201-2975
MIDLAND, TEXAS 79701
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be 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
investment 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. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) PRICE(2) REGISTRATION FEE
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
Debt Securities(4).....................
Preferred Stock, par value $.01 per
share(5)(6)..........................
Depositary Shares(6)................... (3) (3) (3) (3)
Common Stock, par value $.01 per
share(7).............................
Warrants(8)............................
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Total.......................... $400,000,000(9)(10) 100% $400,000,000(9) $121,212(11)
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</TABLE>
Footnotes to Table on next page
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included herein contains a combined prospectus that also relates to a total of
$127,910,000 of Debt Securities, Preferred Stock, Depositary Shares, Common
Stock and Warrants of the registrant previously registered pursuant to Rule 415
under Registration Statement on Form S-3 No. 33-79920 and not issued. This
Registration Statement constitutes Post-Effective Amendment No. 2 to the
Registration Statement on Form S-3 No. 33-79920 pursuant to which the total
amount of unsold securities may be offered and sold as Debt Securities,
Preferred Stock, Depositary Shares, Common Stock and Warrants of the Registrant,
without limitation as to class of securities, together with the securities
registered hereunder, through the use of the combined Prospectus included herein
relating to Debt Securities, Preferred Stock, Depositary Shares, Common Stock
and Warrants of the Registrant. In the event any of such previously registered
securities are offered and sold prior to the effective date of this Registration
Statement, the amount of such securities will not be included in any Prospectus
hereunder.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
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(1) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with the issuance by the registrant
of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(o)
under the Securities Act of 1933.
(3) Not applicable pursuant to General Instruction II.D. of Form S-3.
(4) Subject to note (9) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt Securities
are issued at an original issue discount, then the offering price shall be
in such greater principal amount as shall result in an aggregate initial
offering price not to exceed $400,000,000 less the dollar amount of any
securities previously issued hereunder.
(5) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time
to time, by the registrant.
(6) Subject to note (9) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the
registrant elects to offer to the public fractional interests in shares of
Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests and the
shares of Preferred Stock will be issued to the depositary under the
Deposit Agreement.
(7) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the registrant. There are also being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable upon
conversion or redemption of Preferred Stock or Debt Securities registered
hereunder. Includes associated rights to purchase shares of Common Stock
(the "Rights"). Until the occurrence of certain prescribed events, none of
which has occurred, the Rights are not exercisable, are evidenced by the
certificates representing the Common Stock, and will be transferred along
with and only with the Common Stock.
(8) Subject to note (9) below, there is being registered hereunder an
indeterminate amount and number of Warrants, representing rights to
purchase Debt Securities, Preferred Stock, or Common Stock registered
hereunder.
(9) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$400,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. The aggregate amount of
Common Stock registered hereunder is further limited to that which is
permissible under Rule 415(a)(4) under the Securities Act of 1933. The
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(10) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
constituting a part of this Registration Statement also relates to
$127,910,000 of the registrant's securities registered under Registration
Statement No. 33- 79920.
(11) $38,761 of the registration fee was previously paid.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED FEBRUARY 6, 1997
PROSPECTUS
<TABLE>
<S> <C> <C>
(LOGO) PARKER & PARSLEY PETROLEUM COMPANY
</TABLE>
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
Parker & Parsley Petroleum Company (the "Company"), a Delaware corporation,
may offer from time to time (a) debt securities ("Debt Securities"), which may
be subordinated to other indebtedness of the Company, (b) warrants to purchase
Debt Securities ("Debt Warrants"), (c) shares of preferred stock, par value $.01
per share ("Preferred Stock"), (d) warrants to purchase shares of Preferred
Stock ("Preferred Stock Warrants"), (e) depositary shares representing
entitlement to all rights and preferences of a fraction of a share of Preferred
Stock of a specified series ("Depositary Shares"), (f) shares of common stock,
par value $.01 per share ("Common Stock"), or (g) warrants to purchase shares of
Common Stock ("Common Stock Warrants"), all having an aggregate initial public
offering price not to exceed $400,000,000 or the equivalent thereof in one or
more foreign currencies, foreign currency units, or composite currencies,
including European Currency Units. The Debt Warrants, Preferred Stock Warrants,
and Common Stock Warrants are referred to herein collectively as "Warrants," and
the Debt Securities, Preferred Stock, Depositary Shares, Common Stock, and
Warrants are referred to herein collectively as the "Offered Securities." The
Offered Securities may be offered, separately or as units with other Offered
Securities, in separate series in amounts, at prices, and on terms to be
determined at or prior to the time of sale.
The specific terms of the Offered Securities with respect to which this
Prospectus is being delivered will be set forth in an accompanying supplement to
this Prospectus (a "Prospectus Supplement"), together with the terms of the
offering of the Offered Securities and the initial price and the net proceeds to
the Company from the sale thereof. The Prospectus Supplement will include, with
regard to the particular Offered Securities, the following information: (a) in
the case of Debt Securities, the specific designation, aggregate principal
amount, ranking, authorized denomination, maturity, rate or method of
calculation of interest and dates for payment thereof, any exchangeability,
conversion, redemption, prepayment, or sinking fund provisions, the currency or
currency unit in which principal, premium, or interest is payable, the
designation of the trustee acting under the applicable indenture, and the
initial offering price; (b) in the case of Preferred Stock, the designation,
number of shares, liquidation preference per share, initial public offering
price, dividend rate (or method of calculation thereof), dates on which
dividends shall be payable and dates from which dividends shall accrue, any
redemption or sinking fund provisions, any conversion or exchange rights, and
whether the Company has elected to offer the Preferred Stock in the form of
Depositary Shares; (c) in the case of Common Stock, the number of shares and the
terms of the offering and sale thereof; (d) in the case of Warrants, the number
and terms thereof, the designation and the number of securities issuable upon
exercise, the exercise price, the terms of the offering and sale thereof, and
where applicable, the duration and detachability thereof; and (e) in the case of
all Offered Securities, whether such Offered Securities will be offered
separately or as a unit with other Offered Securities. The Prospectus Supplement
will also contain information, where applicable, about material United States
federal income tax considerations relating to, and any listing on a securities
exchange of, the Offered Securities covered by such Prospectus Supplement.
The Company may sell the Offered Securities directly, through agents
designated from time to time, or through underwriters or dealers. If any agents,
underwriters, or dealers are involved in the sale of the Offered Securities, the
names of such agents, underwriters, or dealers and any applicable commissions or
discounts and the net proceeds to the Company from such sale will be set forth
in the applicable Prospectus Supplement.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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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 , 1997.
<PAGE> 4
IN CONNECTION WITH AN OFFERING OF OFFERED SECURITIES, THE UNDERWRITERS, IF
ANY, FOR SUCH OFFERING MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICES OF THE OFFERED SECURITIES AT LEVELS ABOVE THOSE WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"). It files reports, proxy statements,
and other information with the Securities and Exchange Commission (the "SEC").
Those reports, proxy statements, and other information can be inspected and
copied at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the SEC at 13th Floor, 7 World Trade Center, New York, New
York 10048, and Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. Copies of these materials can be obtained at prescribed rates
from the Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. These reports, proxy statements and other
information may also be obtained without charge from the web site that the SEC
maintains at http://www.sec.gov. These reports, proxy statements, and other
information also may be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
The Company has filed with the SEC a Registration Statement on Form S-3
(the "Registration Statement") under the Securities Act of 1933 (the "Securities
Act"), with respect to the Offered Securities. This Prospectus and the
accompanying Prospectus Supplement do not contain all the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the SEC. For further information with respect
to the Company and the Offered Securities, reference is made to the Registration
Statement and to the exhibits thereto. Statements contained herein concerning
the provisions of certain documents are not necessarily complete, and in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the SEC. Each such statement
is qualified in its entirety by that reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the SEC
pursuant to the Exchange Act (File No. 1-10695), are incorporated by reference
into this Prospectus, and shall be deemed to be a part hereof: (a) the Company's
Annual Report on Form 10-K for the year ended December 31, 1995; (b) the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996, and September 30, 1996; (c) the Company's Current Report on Form
8-K dated March 28, 1996, as amended; (d) the Company's Current Report on Form
8-K dated February 3, 1997; and (e) the description of the Common Stock
contained in the Company's Registration Statement on Form 8-A declared effective
by the SEC on January 12, 1993. All documents filed by the Company pursuant to
Section 13(a), 14, or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of the filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein or in any Prospectus Supplement modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as so modified or superseded.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the documents referred to above that have been
or may be incorporated by reference into this Prospectus, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents). Written or telephone requests for such copies should be
directed to Corporate Secretary,
2
<PAGE> 5
Parker & Parsley Petroleum Company, 303 West Wall, Suite 101, Midland, Texas
79701; telephone, 915-683-4768.
THE COMPANY
The Company is one of the largest public independent oil and gas companies
in the United States, engaged principally in the acquisition, development, and
production of, and exploration for, oil and gas reserves and related activities.
The Company's executive offices and operating headquarters are located at
303 West Wall, Suite 101, Midland, Texas 79701, and its telephone number at
those offices is 915-683-4768.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for general
corporate purposes, which may include repayment of indebtedness, redemption or
repurchase of securities of the Company or any subsidiary, additions to working
capital, and capital expenditures, including exploration, development and
acquisitions.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges and earnings to fixed charges and preferred stock
dividends (a) for each of 1995, 1994, 1993, 1992, and 1991 and for the nine
months ended September 30, 1996, on an historical basis and (b) for 1995 and the
nine months ended September 30, 1996, on a pro forma basis. The pro forma ratios
give effect to the sale of certain wholly-owned subsidiaries with assets in
Australia and Asia, the sale of oil and gas properties and related assets during
1996 and 1995, and two issuances of senior notes as if those transactions had
been completed on January 1, 1995.
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED DECEMBER 31,
ENDED --------------------------------------------------
SEPTEMBER 30, 1996 1995 1994 1993 1992 1991
---------------------- ---------------------- ---- ---- ---- ----
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(a)...... 5.43 3.30 (c) (c) (c) 3.02 2.86 2.31
Ratio of earnings to fixed charges and
preferred stock dividends(b)............. 5.43 3.30 (c) (c) (c) 3.02 2.86 2.31
</TABLE>
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(a) For purposes of computing such ratio, earnings consist of income before
income taxes and cumulative effect of accounting change plus fixed charges
net of interest capitalized and preferred stock dividends of subsidiary,
and fixed charges consist of interest expense, interest capitalized, the
portion of rental expense attributable to interest, and preferred stock
dividends of subsidiary.
(b) For purposes of computing such ratio, earnings consist of income before
income taxes and cumulative effect of accounting change plus fixed charges
and preferred stock dividends net of preferred stock dividends of
subsidiary and interest capitalized, and fixed charges and preferred stock
dividends consist of interest expense, interest capitalized, the portion of
rental expense attributable to interest, preferred stock dividends of
subsidiary, and preferred stock dividends.
(c) The Company's 1995 earnings (computed for purposes of these ratios), on both
a historical and pro forma basis, and the 1994 earnings on a historical
basis were inadequate to cover its fixed charges. The amount of such
deficiency was $150 million and $20.5 million, respectively, on a historical
basis and $113.3 million for 1995 on a pro forma basis.
3
<PAGE> 6
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities. Accordingly, for
a description of the terms of a particular issue of Debt Securities, reference
must be made to both the Prospectus Supplement relating thereto and to the
following description.
The Debt Securities will be general obligations of the Company and may be
subordinated to Senior Indebtedness (as defined below) of the Company to the
extent set forth in the Prospectus Supplement relating thereto. See "Description
of Debt Securities -- Subordination." Debt Securities will be issued under an
Indenture (the "Indenture") dated April 12, 1995, between the Company and The
Chase Manhattan Bank (National Association) or a similar indenture between the
Company and one or more commercial banks to be selected as trustees (The Chase
Manhattan Bank (National Association) or any such other trustee are referred to
collectively as the "Trustee"). A copy of the Indenture has been filed as an
exhibit to the Registration Statement filed with the SEC. The Indenture is also
available for inspection at the corporate trust office of the Trustee at 450 W.
33rd Street, 15th Floor, New York, New York 10001-2697. The following discussion
of certain provisions of the Indenture is a summary only and does not purport to
be a complete description of the terms and provisions of the Indenture.
Accordingly, the following discussion is qualified in its entirety by reference
to the provisions of the Indenture, including the definition therein of terms
used below with their initial letters capitalized.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that can be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Debt Securities of the series with respect to which such Prospectus
Supplement is being delivered:
(a) The title of the Debt Securities of the series;
(b) Any limit on the aggregate principal amount of the Debt Securities
of the series that may be authenticated and delivered under the Indenture;
(c) The date or dates on which the principal and premium with respect
to the Debt Securities of the series are payable;
(d) The rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest (if any) or the method of
determining such rate or rates, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable or the method by which such dates will be determined, the record
dates for the determination of holders thereof to whom such interest is
payable (in the case of Registered Securities), and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve
30-day months;
(e) The place or places, if any, in addition to or instead of the
corporate trust office of the Trustee (in the case of Registered
Securities) or the principal London office of the Trustee (in the case of
Bearer Securities), where the principal, premium, and interest with respect
to Debt Securities of the series shall be payable;
(f) The price or prices at which, the period or periods within which,
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Company or
otherwise;
4
<PAGE> 7
(g) Whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both and, if Bearer
Securities are to be issued, whether coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for Registered
Securities of the series, and the circumstances under which and the places
at which any such exchanges, if permitted, may be made;
(h) If any Debt Securities of the series are to be issued as Bearer
Securities or as one or more Global Securities representing individual
Bearer Securities of the series, whether certain provisions for the payment
of additional interest or tax redemptions shall apply; whether interest
with respect to any portion of a temporary Bearer Security of the series
payable with respect to any interest payment date prior to the exchange of
such temporary Bearer Security for definitive Bearer Securities of the
series shall be paid to any clearing organization with respect to the
portion of such temporary Bearer Security held for its account and, in such
event, the terms and conditions (including any certification requirements)
upon which any such interest payment received by a clearing organization
will be credited to the persons entitled to interest payable on such
interest payment date; and the terms upon which a temporary Bearer Security
may be exchanged for one or more definitive Bearer Securities of the
series;
(i) The obligation, if any, of the Company to redeem, purchase, or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the price or
prices at which, the period or periods within which, and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
purchased, or repaid, in whole or in part, pursuant to such obligations;
(j) The terms, if any, upon which the Debt Securities of the series
may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by Depositary Shares), other Debt Securities, or
warrants for Common Stock, Preferred Stock, or indebtedness or other
securities of any kind of the Company or any other issuer or obligor and
the terms and conditions upon which such conversion or exchange shall be
effected, including the initial conversion or exchange price or rate, the
conversion or exchange period, and any other additional provisions;
(k) If other than denominations of $1,000 or any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(l) If the amount of principal, premium, or interest with respect to
the Debt Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts will be
determined;
(m) If the principal amount payable at the stated maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to such stated maturity, the amount that will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity or which will be deemed to be outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined), and if necessary, the manner of
determining the equivalent thereof in United States currency;
(n) Any changes or additions to the provisions of the Indenture
dealing with defeasance, including the addition of additional covenants
that may be subject to the Company's covenant defeasance option;
(o) If other than such coin or currency of the United States as at the
time of payment is legal tender for payment of public and private debts,
the coin or currency or currencies or units of two or more currencies in
which payment of the principal, premium, and interest with respect to Debt
Securities of the series shall be payable;
(p) If other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series that shall be payable
upon declaration of acceleration of the maturity thereof or provable in
bankruptcy;
5
<PAGE> 8
(q) The terms, if any, of the transfer, mortgage, pledge, or
assignment as security for the Debt Securities of the series of any
properties, assets, moneys, proceeds, securities, or other collateral,
including whether certain provisions of the Trust Indenture Act are
applicable and any corresponding changes to provisions of the Indenture as
then in effect;
(r) Any addition to or change in the Events of Default with respect to
the Debt Securities of the series and any change in the right of the
Trustee or the holders to declare the principal, premium, and interest with
respect to such Debt Securities due and payable;
(s) If the Debt Securities of the series shall be issued in whole or
in part in the form of a Global Security, the terms and conditions, if any,
upon which such Global Security may be exchanged in whole or in part for
other individual Debt Securities in definitive registered form, the
Depositary for such Global Security, and the form of any legend or legends
to be borne by any such Global Security in addition to or in lieu of the
legend referred to in the Indenture;
(t) Any Trustee, authenticating or paying agents, transfer agents, or
registrars;
(u) The applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms
then set forth in the Indenture relating to permitted consolidations,
mergers, or sales of assets, including conditioning any merger, conveyance,
transfer, or lease permitted by the Indenture upon the satisfaction of an
indebtedness coverage standard by the Company and any successor to the
Company;
(v) The terms, if any, of any guarantee of the payment of principal,
premium, and interest with respect to Debt Securities of the series and any
corresponding changes to the provisions of the Indenture as then in effect;
(w) The subordination, if any, of the Debt Securities of the series
pursuant to the Indenture and any changes or additions to the provisions of
the Indenture relating to subordination;
(x) With regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(y) Any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of the Indenture).
The Prospectus Supplement will also describe any material United States
federal income tax consequences or other special considerations applicable to
the series of Debt Securities to which such Prospectus Supplement relates,
including those applicable to (a) Bearer Securities, (b) Debt Securities with
respect to which payments of principal, premium, or interest are determined with
reference to an index or formula (including changes in prices of particular
securities, currencies, or commodities), (c) Debt Securities with respect to
which principal, premium, or interest is payable in a foreign or composite
currency, (d) Debt Securities that are issued at a discount below their stated
principal amount, bearing no interest or interest at a rate that at the time of
issuance is below market rates ("Original Issue Discount Debt Securities"), and
(e) variable rate Debt Securities that are exchangeable for fixed rate Debt
Securities.
Payments of interest on Registered Securities may be made at the option of
the Company by check mailed to the registered holders thereof or, if so provided
in the applicable Prospectus Supplement, at the option of a holder by wire
transfer to an account designated by such holder. Except as otherwise provided
in the applicable Prospectus Supplement, no payment on a Bearer Security will be
made by mail to an address in the United States or by wire transfer to an
account in the United States.
Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities may be transferred or exchanged at the office of the
Trustee at which its corporate trust business is principally administered in the
United States or at the office of the Trustee or the Trustee's agent in
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the Borough of Manhattan, the City and State of New York, at which its corporate
agency business is conducted, subject to the limitations provided in the
Indenture, without the payment of any service charge, other than any tax or
governmental charge payable in connection therewith. Bearer Securities will be
transferable only by delivery. Provisions with respect to the exchange of Bearer
Securities will be described in the Prospectus Supplement relating to such
Bearer Securities.
All funds paid by the Company to a paying agent for the payment of
principal, premium, or interest with respect to any Debt Securities that remain
unclaimed at the end of two years after such principal, premium, or interest
shall have become due and payable will be repaid to the Company, and the holders
of such Debt Securities or any coupons appertaining thereto will thereafter look
only to the Company for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities. A Global Security is a Debt Security that
represents, and is denominated in an amount equal to the aggregate principal
amount of, all outstanding Debt Securities of a series, or any portion thereof,
in either case having the same terms, including the same original issue date,
date or dates on which principal and interest are due, and interest rate or
method of determining interest. A Global Security will be deposited with, or on
behalf of, a Depositary, which will be identified in the Prospectus Supplement
relating to such Debt Securities. Global Securities may be issued in either
registered or bearer form and in either temporary or definitive form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security may not be transferred except as a whole
by the Depositary to a nominee of the Depositary, by a nominee of the Depositary
to the Depositary or another nominee of the Depositary, or by the Depositary or
any nominee of the Depositary to a successor Depositary or any nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such Debt Securities. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Debt Securities represented by
such Global Security to the accounts of persons that have accounts with the
Depositary ("participants"). Such accounts shall be designated by the dealers or
underwriters with respect to such Debt Securities or, if such Debt Securities
are offered and sold directly by the Company or through one or more agents, by
the Company or such agents. Ownership of beneficial interests in a Global
Security will be limited to participants or persons that hold beneficial
interests through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depositary (with respect to interests of
participants) or records maintained by participants (with respect to interests
of persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limitations and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner or holder of such Global Security, such Depositary or nominee,
as the case may be, will be considered the sole owner or holder of the
individual Debt Securities represented by such Global Security for all purposes
under the Indenture. Except as provided below, owners of beneficial interests in
a Global Security will not be entitled to have any of the individual Debt
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any of such Debt
Securities in definitive form, and will not be considered the owners or holders
thereof under the Indenture.
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Subject to the restrictions described under "Description of Debt
Securities -- Limitations on Issuance of Bearer Securities," payments of
principal, premium, and interest with respect to individual Debt Securities
represented by a Global Security will be made to the Depositary or its nominee,
as the case may be, as the registered owner or holder of such Global Security.
Neither the Company, the Trustee, any paying agent or registrar for such Debt
Securities, or any agent of the Company or the Trustee will have any
responsibility or liability for (a) any aspect of the records relating to or
payments made by the Depositary, its nominee, or any participants on account of
beneficial interests in the Global Security or for maintaining, supervising, or
reviewing any records relating to such beneficial interests, (b) the payment to
the owners of beneficial interests in the Global Security of amounts paid to the
Depositary or its nominee, or (c) any other matter relating to the actions and
practices of the Depositary, its nominee, or its participants. Neither the
Company, the Trustee, any paying agent or registrar for such Debt Securities, or
any agent of the Company or the Trustee will be liable for any delay by the
Depositary, its nominee, or any of its participants in identifying the owners of
beneficial interests in the Global Security, and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from the
Depositary or its nominee for all purposes.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium, or interest with
respect to a definitive Global Security representing any of such Debt
Securities, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security, as shown on the records of the Depositary or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers and registered in street
name. Such payments will be the responsibility of such participants. Receipt by
owners of beneficial interests in a temporary Global Security of payments of
principal, premium, or interest with respect thereto will be subject to the
restrictions described under "Description of Debt Securities -- Limitations on
Issuance of Bearer Securities."
If the Depositary for a series of Debt Securities is at any time unwilling,
unable, or ineligible to continue as depositary, the Company shall appoint a
successor depositary. If a successor depositary is not appointed by the Company
within 90 days, the Company will issue individual Debt Securities of such series
in exchange for the Global Security representing such series of Debt Securities.
In addition, the Company may at any time and in its sole discretion, subject to
any limitations described in the Prospectus Supplement relating to such Debt
Securities, determine no longer to have Debt Securities of a series represented
by a Global Security and, in such event, will issue individual Debt Securities
of such series in exchange for the Global Security representing such series of
Debt Securities. Furthermore, if the Company so specifies with respect to the
Debt Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable to
the Company, the Trustee, and the Depositary for such Global Security, receive
individual Debt Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery of
individual Debt Securities of the series represented by such Global Security
equal in principal amount to such beneficial interest and to have such Debt
Securities registered in its name (if the Debt Securities are issuable as
Registered Securities). Individual Debt Securities of such series so issued will
be issued (a) as Registered Securities in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof if the Debt
Securities are issuable as Registered Securities, (b) as Bearer Securities in
the denomination or denominations specified by the Company if the Debt
Securities are issuable as Bearer Securities, or (c) as either Registered
Securities or Bearer Securities as described above if the Debt Securities are
issuable in either form. See, however, "Description of Debt
Securities -- Limitations on
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Issuance of Bearer Securities" for a description of certain restrictions on the
issuance of individual Bearer Securities in exchange for beneficial interests in
a bearer Global Security.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
The Debt Securities of a series may be issued as Registered Securities
(which will be registered as to principal and interest in the register
maintained by the registrar for such Debt Securities) or Bearer Securities
(which will be transferable only by delivery). If such Debt Securities are
issuable as Bearer Securities, certain special limitations and considerations
will apply.
In compliance with United States federal income tax laws and regulations,
the Company and any underwriter, agent, or dealer participating in an offering
of Bearer Securities will agree that, in connection with the original issuance
of such Bearer Securities and during the period ending 40 days after the issue
date, they will not offer, sell, or deliver any such Bearer Security, directly
or indirectly, to a United States Person (as defined below) or to any person
within the United States, except to the extent permitted under United States
Treasury regulations.
Bearer Securities will bear a legend to the following effect: "Any United
States Person who holds this obligation will be subject to limitations under the
United States federal income tax laws, including the limitations provided in
Sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred
to in the legend provide that, with certain exceptions, a United States taxpayer
who holds Bearer Securities will not be allowed to deduct any loss with respect
to, and will not be eligible for capital gain treatment with respect to any gain
realized on the sale, exchange, redemption, or other disposition of, such Bearer
Securities.
For this purpose, "United States" includes the United States of America and
its possessions, and "United States Person" means a citizen or resident of the
United States, a corporation, partnership, or other entity created or organized
in or under the laws of the United States, or an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source.
Pending the availability of a definitive Global Security or individual
Bearer Securities, as the case may be, Debt Securities that are issuable as
Bearer Securities may initially be represented by a single temporary Global
Security, without interest coupons, to be deposited with a common depositary in
London for Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of the Euroclear System ("Euroclear"), or Centrale de Livraison de
Valeurs Mobilieres S.A. ("CEDEL") for credit to the accounts designated by or on
behalf of the purchasers thereof. Following the availability of a definitive
Global Security in bearer form, without coupons attached, or individual Bearer
Securities and subject to any further limitations described in the applicable
Prospectus Supplement, the temporary Global Security will be exchangeable for
interests in such definitive Global Security or for such individual Bearer
Securities, respectively, only upon receipt of a "Certificate of Non-U.S.
Beneficial Ownership," which is a certificate to the effect that a beneficial
interest in a temporary Global Security is owned by a person that is not a
United States Person or is owned by or through a financial institution in
compliance with applicable United States Treasury regulations. No Bearer
Security will be delivered in or to the United States. If so specified in the
applicable Prospectus Supplement, interest on a temporary Global Security will
be paid to each of Euroclear and CEDEL with respect to that portion of such
temporary Global Security held for its account, but only upon receipt as of the
relevant interest payment date of a Certificate of Non-U.S. Beneficial
Ownership.
SUBORDINATION
Debt Securities of a series may be subordinated ("Subordinated Debt
Securities") to Senior Indebtedness (as defined below) to the extent set forth
in the Prospectus Supplement relating thereto. The Company currently conducts
substantially all its operations through subsidiaries, and the holders of Debt
Securities (whether or not Subordinated Debt Securities) will be structurally
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subordinated to the creditors of the Company's subsidiaries. All Debt Securities
and any coupons appertaining thereto will rank senior to the Company's
obligations with respect to the Convertible MIPS (as defined under "Description
of Capital Stock -- Preferred Stock -- Designated Preferred Stock").
Subordinated Debt Securities of a series and any coupons appertaining
thereto will be subordinate in right of payment, to the extent and in the manner
set forth in the Indenture and the Prospectus Supplement relating to such
Subordinated Debt Securities, to the prior payment of all indebtedness of the
Company that is designated as "Senior Indebtedness" with respect to such series.
"Senior Indebtedness," with respect to any series of Subordinated Debt
Securities, will consist of (a) any and all amounts payable under or with
respect to the Company's "Bank Indebtedness" (defined as the Credit Facility
Agreement, dated June 22, 1993, among the Company as Borrower, NationsBank of
Texas, N.A. as Administrative Agent, CIBC, Inc. as Documentation Agent, and the
Co-Agents and the Lenders party thereto, as amended or modified from time to
time) and (b) any other indebtedness of the Company that is designated in a
resolution of the Company's Board of Directors or the supplemental Indenture
establishing such series as Senior Indebtedness with respect to such series.
Upon any payment or distribution of assets of the Company to creditors or
upon a total or partial liquidation or dissolution of the Company or in a
bankruptcy, receivership, or similar proceeding relating to the Company or its
property, holders of Senior Indebtedness shall be entitled to receive payment in
full in cash of the Senior Indebtedness before holders of Subordinated Debt
Securities shall be entitled to receive any payment of principal, premium, or
interest with respect to the Subordinated Debt Securities, and until the Senior
Indebtedness is paid in full, any distribution to which holders of Subordinated
Debt Securities would otherwise be entitled shall be made to the holders of
Senior Indebtedness (except that such holders may receive shares of stock and
any debt securities that are subordinated to Senior Indebtedness to at least the
same extent as the Subordinated Debt Securities).
The Company may not make any payments of principal, premium, or interest
with respect to Subordinated Debt Securities, make any deposit for the purpose
of defeasance of such Subordinated Debt Securities, or repurchase, redeem, or
otherwise retire (except, in the case of Subordinated Debt Securities that
provide for a mandatory sinking fund, by the delivery of Subordinated Debt
Securities by the Company to the Trustee in satisfaction of the Company's
sinking fund obligation) any Subordinated Debt Securities if (a) any principal,
premium, or interest with respect to Senior Indebtedness is not paid within any
applicable grace period (including at maturity) or (b) any other default on
Senior Indebtedness occurs and the maturity of such Senior Indebtedness is
accelerated in accordance with its terms, unless, in either case, the default
has been cured or waived and such acceleration has been rescinded, such Senior
Indebtedness has been paid in full in cash, or the Company and the Trustee
receive written notice approving such payment from the representatives of each
issue of "Designated Senior Indebtedness" (which will include the Bank
Indebtedness and any other specified issue of Senior Indebtedness of at least
$100 million). During the continuance of any default (other than a default
described in clause (a) or (b) above) with respect to any Senior Indebtedness
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the Company may
not pay the Subordinated Debt Securities for a period (the "Payment Blockage
Period") commencing on the receipt by the Company and the Trustee of written
notice of such default from the representative of any Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period (a
"Blockage Notice"). The Payment Blockage Period may be terminated before its
expiration by written notice to the Trustee and the Company from the person who
gave the Blockage Notice, by repayment in full in cash of the Senior
Indebtedness with respect to which the Blockage Notice was given, or because the
default giving rise to the Payment Blockage Period is no longer continuing.
Unless the holders of such Senior Indebtedness shall have accelerated the
maturity thereof, the
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Company may resume payments on the Subordinated Debt Securities after the
expiration of the Payment Blockage Period. Not more than one Blockage Notice may
be given in any period of 360 consecutive days unless the first Blockage Notice
within such 360-day period is given by or on behalf of holders of Designated
Senior Indebtedness other than the Bank Indebtedness, in which case, the
representative of the Bank Indebtedness may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any period of 360 consecutive days. After all Senior Indebtedness is paid
in full and until the Subordinated Debt Securities are paid in full, holders of
the Subordinated Debt Securities shall be subrogated to the rights of holders of
Senior Indebtedness to receive distributions applicable to Senior Indebtedness.
By reason of such subordination, in the event of insolvency, creditors of
the Company who are holders of Senior Indebtedness, as well as certain general
creditors of the Company, may recover more, ratably, than the holders of the
Subordinated Debt Securities.
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Debt Securities:
(a) Default in the payment of any installment of interest on any Debt
Securities of that series or any payment with respect to the related
coupons, if any, as and when the same shall become due and payable (whether
or not, in the case of Subordinated Debt Securities, such payment shall be
prohibited by reason of the subordination provisions described above) and
continuance of such default for a period of 30 days;
(b) Default in the payment of principal or premium with respect to any
Debt Securities of that series as and when the same shall become due and
payable, whether at maturity, upon redemption, by declaration, upon
required repurchase, or otherwise (whether or not, in the case of
Subordinated Debt Securities, such payment shall be prohibited by reason of
the subordination provisions described above);
(c) Default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable;
(d) Failure on the part of the Company to comply with the provisions
of the Indenture relating to consolidations, mergers, and sales of assets;
(e) Failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Debt
Securities of that series, in any resolution of the Board of Directors of
the Company authorizing the issuance of that series of Debt Securities, in
the Indenture with respect to such series, or in any supplemental Indenture
with respect to such series (other than a covenant a default in the
performance of which is otherwise specifically dealt with) continuing for a
period of 60 days after the date on which written notice specifying such
failure and requiring the Company to remedy the same shall have been given
to the Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in aggregate principal amount of the Debt
Securities of that series at the time outstanding;
(f) Indebtedness of the Company or any subsidiary of the Company is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total amount
of such Indebtedness unpaid or accelerated exceeds $20 million or the
United States dollar equivalent thereof at the time, and such default
remains uncured or such acceleration is not rescinded for 10 days after the
date on which written notice specifying such failure and requiring the
Company to remedy the same shall have been given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at the
time outstanding;
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(g) The Company or any of its "Significant Subsidiaries" (defined as
any subsidiary of the Company that would be a "significant subsidiary" as
defined in Rule 405 under the Securities Act as in effect on the date of
the Indenture) shall (1) voluntarily commence any proceeding or file any
petition seeking relief under the United States Bankruptcy Code or other
federal or state bankruptcy, insolvency, or similar law, (2) consent to the
institution of, or fail to controvert within the time and in the manner
prescribed by law, any such proceeding or the filing of any such petition,
(3) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, or similar official for the Company or any such
Significant Subsidiary or for a substantial part of its property, (4) file
an answer admitting the material allegations of a petition filed against it
in any such proceeding, (5) make a general assignment for the benefit of
creditors, (6) admit in writing its inability or fail generally to pay its
debts as they become due, (7) take corporate action for the purpose of
effecting any of the foregoing, or (8) take any comparable action under any
foreign laws relating to insolvency;
(h) The entry of an order or decree by a court having competent
jurisdiction for (1) relief with respect to the Company or any of its
Significant Subsidiaries or a substantial part of any of their property
under the United States Bankruptcy Code or any other federal or state
bankruptcy, insolvency, or similar law, (2) the appointment of a receiver,
trustee, custodian, sequestrator, or similar official for the Company or
any such Significant Subsidiary or for a substantial part of any of their
property (except any decree or order appointing such official of any
Significant Subsidiary pursuant to a plan under which the assets and
operations of such Significant Subsidiary are transferred to or combined
with another Significant Subsidiary or Subsidiaries of the Company or to
the Company), or (3) the winding-up or liquidation of the Company or any
such Significant Subsidiary (except any decree or order approving or
ordering the winding-up or liquidation of the affairs of a Significant
Subsidiary pursuant to a plan under which the assets and operations of such
Significant Subsidiary are transferred to or combined with another
Significant Subsidiary or Subsidiaries of the Company or to the Company),
and such order or decree shall continue unstayed and in effect for 60
consecutive days, or any similar relief is granted under any foreign laws
and the order or decree stays in effect for 60 consecutive days;
(i) Any judgment or decree for the payment of money in excess of $20
million or the United States dollar equivalent thereof at the time is
entered against the Company or any Subsidiary of the Company by a court of
competent jurisdiction, which judgment is not covered by insurance, and is
not discharged and either (1) an enforcement proceeding has been commenced
by any creditor upon such judgment or decree or (2) there is a period of 60
days following the entry of such judgment or decree during which such
judgment or decree is not discharged or waived or the execution thereof
stayed and, in either case, such default continues for 10 days after the
date on which written notice specifying such failure and requiring the
Company to remedy the same shall have been given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at the
time outstanding; and
(j) Any other Event of Default provided with respect to Debt
Securities of that series.
An Event of Default with respect to one series of Debt Securities is not
necessarily an Event of Default for another series.
If an Event of Default described in clause (a), (b), (c), (d), (e), (f),
(i), or (j) above occurs and is continuing with respect to any series of Debt
Securities, unless the principal and interest with respect to all the Debt
Securities of such series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities of such series then outstanding may declare the principal amount
(or, if Original Issue Discount Debt Securities, such portion of the principal
amount as may be specified in such series) of and interest on all the Debt
Securities of such series due and payable immediately. If an Event of Default
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described in clause (g) or (h) above occurs, unless the principal and interest
with respect to all the Debt Securities of all series shall have become due and
payable, the principal amount (or, if any series are Original Issue Discount
Debt Securities, such portion of the principal amount as may be specified in
such series) of and interest on all Debt Securities of all series then
outstanding shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any holder of Debt
Securities.
If an Event of Default occurs and is continuing, the Trustee shall be
entitled and empowered to institute any action or proceeding for the collection
of the sums so due and unpaid or to enforce the performance of any provision of
the Debt Securities of the affected series or the Indenture, to prosecute any
such action or proceeding to judgment or final decree, and to enforce any such
judgment or final decree against the Company or any other obligor on the Debt
Securities of such series. In addition, if there shall be pending proceedings
for the bankruptcy or reorganization of the Company or any other obligor on the
Debt Securities, or if a receiver, trustee, or similar official shall have been
appointed for its property, the Trustee shall be entitled and empowered to file
and prove a claim for the whole amount of principal, premium, and interest (or,
in the case of Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and
unpaid with respect to the Debt Securities. No holder of any Debt Security or
coupon of any series shall have any right to institute any action or proceeding
upon or under or with respect to the Indenture, for the appointment of a
receiver or trustee, or for any other remedy, unless (a) such holder previously
shall have given to the Trustee written notice of an Event of Default with
respect to Debt Securities of that series and of the continuance thereof, (b)
the holders of not less than 25% in aggregate principal amount of the
outstanding Debt Securities of that series shall have made written request to
the Trustee to institute such action or proceeding with respect to such Event of
Default and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and (c) the Trustee, for 60 days after its receipt of such notice,
request, and offer of indemnity shall have failed to institute such action or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to the provisions of the Indenture.
Prior to the acceleration of the maturity of the Debt Securities of any
series, the holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may, on behalf of the holders
of all Debt Securities and any related coupons of that series, waive any past
default or Event of Default and its consequences for that series, except (a) a
default in the payment of the principal, premium, or interest with respect to
such Debt Securities or (b) a default with respect to a provision of the
Indenture that cannot be amended without the consent of each holder affected
thereby. In case of any such waiver, such default shall cease to exist, any
Event of Default arising therefrom shall be deemed to have been cured for all
purposes, and the Company, the Trustee, and the holders of the Debt Securities
of that series shall be restored to their former positions and rights under the
Indenture.
The Trustee shall, within 90 days after the occurrence of a default known
to it with respect to a series of Debt Securities, give to the holders of the
Debt Securities of such series notice of all uncured defaults with respect to
such series known to it, unless such defaults shall have been cured or waived
before the giving of such notice; provided, however, that except in the case of
default in the payment of principal, premium, or interest with respect to the
Debt Securities of such series or in the making of any sinking fund payment with
respect to the Debt Securities of such series, the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interest of the holders of such Debt Securities.
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MODIFICATION OF THE INDENTURE
The Company and the Trustee may enter into supplemental Indentures without
the consent of the holders of Debt Securities for one or more of the following
purposes:
(a) To evidence the succession of another person to the Company
pursuant to the provisions of the Indenture relating to consolidations,
mergers, and sales of assets and the assumption by such successor of the
covenants, agreements, and obligations of the Company in the Indenture and
in the Debt Securities;
(b) To surrender any right or power conferred upon the Company by the
Indenture, to add to the covenants of the Company such further covenants,
restrictions, conditions, or provisions for the protection of the holders
of all or any series of Debt Securities as the Board of Directors of the
Company shall consider to be for the protection of the holders of such Debt
Securities, and to make the occurrence, or the occurrence and continuance,
of a default in any of such additional covenants, restrictions, conditions,
or provisions a default or an Event of Default under the Indenture
(provided, however, that with respect to any such additional covenant,
restriction, condition, or provision, such supplemental Indenture may
provide for a period of grace after default, which may be shorter or longer
than that allowed in the case of other defaults, may provide for an
immediate enforcement upon such default, may limit the remedies available
to the Trustee upon such default, or may limit the right of holders of a
majority in aggregate principal amount of any or all series of Debt
Securities to waive such default);
(c) To cure any ambiguity or to correct or supplement any provision
contained in the Indenture, in any supplemental Indenture, or in any Debt
Securities that may be defective or inconsistent with any other provision
contained therein, to convey, transfer, assign, mortgage, or pledge any
property to or with the Trustee, or to make such other provisions in regard
to matters or questions arising under the Indenture as shall not adversely
affect the interests of any holders of Debt Securities of any series;
(d) To modify or amend the Indenture in such a manner as to permit the
qualification of the Indenture or any supplemental Indenture under the
Trust Indenture Act as then in effect;
(e) To add to or change any of the provisions of the Indenture to
provide that Bearer Securities may be registerable as to principal, to
change or eliminate any restrictions on the payment of principal or premium
with respect to Registered Securities or of principal, premium, or interest
with respect to Bearer Securities, or to permit Registered Securities to be
exchanged for Bearer Securities, so long as any such action does not
adversely affect the interests of the holders of Debt Securities or any
coupons of any series in any material respect or permit or facilitate the
issuance of Debt Securities of any series in uncertificated form;
(f) To comply with the provisions of the Indenture relating to
consolidations, mergers, and sales of assets;
(g) In the case of Subordinated Debt Securities, to make any change in
the provisions of the Indenture relating to subordination that would limit
or terminate the benefits available to any holder of Senior Indebtedness
under such provisions (but only if such holder of Senior Indebtedness
consents to such change);
(h) To add guarantees with respect to the Debt Securities or to secure
the Debt Securities;
(i) To make any change that does not adversely affect the rights of
any holder;
(j) To add to, change, or eliminate any of the provisions of the
Indenture with respect to one or more series of Debt Securities, so long as
any such addition, change, or elimination not otherwise permitted under the
Indenture shall (1) neither apply to any Debt Security of any series
created prior to the execution of such supplemental Indenture and entitled
to the benefit
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of such provision nor modify the rights of the holders of any such Debt
Security with respect to such provision or (2) become effective only when
there is no such Debt Security outstanding;
(k) To evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of the Indenture
as shall be necessary to provide for or facilitate the administration of
the Indenture by more than one Trustee; and
(l) To establish the form or terms of Debt Securities and coupons of
any series, as described under "Description of Debt Securities -- General"
above.
With the consent of the holders of a majority in aggregate principal amount
of the outstanding Debt Securities of each series affected thereby, the Company
and the Trustee may from time to time and at any time enter into a supplemental
Indenture for the purpose of adding any provisions to, changing in any manner,
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holder of the Debt
Securities of such series; provided, however, that without the consent of the
holders of each Debt Security so affected, no such supplemental Indenture shall
(a) reduce the percentage in principal amount of Debt Securities of any series
whose holders must consent to an amendment, (b) reduce the rate of or extend the
time for payment of interest on any Debt Security or coupon or reduce the amount
of any payment to be made with respect to any coupon, (c) reduce the principal
of or extend the stated maturity of any Debt Security, (d) reduce the premium
payable upon the redemption of any Debt Security or change the time at which any
Debt Security may or shall be redeemed, (e) make any Debt Security payable in a
currency other than that stated in the Debt Security, (f) in the case of any
Subordinated Debt Security or coupons appertaining thereto, make any change in
the provisions of the Indenture relating to subordination that adversely affects
the rights of any holder under such provisions, (g) release any security that
may have been granted with respect to the Debt Securities, (h) make any change
in the provisions of the Indenture relating to waivers of defaults or amendments
that require unanimous consent, (i) change any obligation of the Company
provided for in the Indenture to pay additional interest with respect to Bearer
Securities, or (j) limit the obligation of the Company to maintain a paying
agency outside the United States for payment on Bearer Securities or limit the
obligation of the Company to redeem certain Bearer Securities.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any person, or
convey, transfer, or lease all or substantially all of its assets, unless the
following conditions have been satisfied:
(a) Either (1) the Company shall be the continuing person in the case
of a merger or (2) the resulting, surviving, or transferee person, if other
than the Company (the "Successor Company"), shall be a corporation
organized and existing under the laws of the United States, any State, or
the District of Columbia and shall expressly assume all of the obligations
of the Company under the Debt Securities and coupons and the Indenture;
(b) Immediately after giving effect to such transaction (and treating
any indebtedness that becomes an obligation of the Successor Company or any
subsidiary of the Company as a result of such transaction as having been
incurred by the Successor Company or such subsidiary at the time of such
transaction), no Default or Event of Default would occur or be continuing;
(c) The Successor Company waives any right to redeem any Bearer
Security under circumstances in which the Successor Company would be
entitled to redeem such Bearer Security but the Company would not have been
so entitled to redeem if the consolidation, merger, conveyance, transfer,
or lease had not occurred; and
(d) The Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger, or transfer complies with the Indenture.
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SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with
respect to a series of Debt Securities if (a) the Company has delivered to the
Trustee for cancellation all Debt Securities of such series (with certain
limited exceptions) or (b) all Debt Securities and coupons of such series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year, and the Company shall have
deposited with the Trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all such Debt Securities and coupons (and if, in
either case, the Company shall also pay or cause to be paid all other sums
payable under the Indenture by the Company).
In addition, the Company shall have a "legal defeasance option" (pursuant
to which it may terminate, with respect to the Debt Securities of a particular
series, all of its obligations under such Debt Securities and the Indenture with
respect to such Debt Securities) and a "covenant defeasance option" (pursuant to
which it may terminate, with respect to the Debt Securities of a particular
series, its obligations with respect to such Debt Securities under certain
specified covenants contained in the Indenture). If the Company exercises its
legal defeasance option with respect to a series of Debt Securities, payment of
such Debt Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option with respect to a series of
Debt Securities, payment of such Debt Securities may not be accelerated because
of an Event of Default related to the specified covenants.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series only if (a)
the Company irrevocably deposits in trust with the Trustee cash or U.S
Government Obligations (as defined in the Indenture) for the payment of
principal, premium, and interest with respect to such Debt Securities to
maturity or redemption, as the case may be, (b) the Company delivers to the
Trustee a certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and interest
when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay the principal, premium, and
interest when due with respect to all the Debt Securities of such series to
maturity or redemption, as the case may be, (c) 123 days pass after the deposit
is made and during the 123-day period no default described in clause (g) or (h)
under "Description of Debt Securities -- Events of Default and Remedies" with
respect to the Company occurs that is continuing at the end of such period, (d)
no Default has occurred and is continuing on the date of such deposit and after
giving effect thereto, (e) the deposit does not constitute a default under any
other agreement binding on the Company and, in the case of Subordinated Debt
Securities, is not prohibited by the provisions of the Indenture relating to
subordination, (f) the Company delivers to the Trustee an opinion of counsel to
the effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940, (g) the Company shall have delivered to the Trustee an opinion of counsel
addressing certain federal income tax matters relating to the defeasance, and
(h) the Company delivers to the Trustee an officers' certificate and an opinion
of counsel, each stating that all conditions precedent to the defeasance and
discharge of the Debt Securities of such series as contemplated by the Indenture
have been complied with.
The Trustee shall hold in trust cash or U.S. Government Obligations
deposited with it as described above and shall apply the deposited cash and the
proceeds from deposited U.S. Government Obligations to the payment of principal,
premium, and interest with respect to the Debt Securities and coupons of the
defeased series. In the case of Subordinated Debt Securities and coupons related
thereto, the money and U.S. Government Obligations so held in trust will not be
subject to the subordination provisions of the Indenture.
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THE TRUSTEE
The Company may appoint a separate Trustee for any series of Debt
Securities. As used herein in the description of a series of Debt Securities,
the term "Trustee" refers to the Trustee appointed with respect to such series
of Debt Securities. The Chase Manhattan Bank (National Association) is the
trustee for the Company's 8 7/8% Senior Notes Due 2005 and 8 1/4% Senior Notes
Due 2007 issued under the Indenture.
The Company may maintain banking and other commercial relationships with
the Trustee and its affiliates in the ordinary course of business, and the
Trustee may own Debt Securities.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of (a) 180,000,000
shares of Common Stock and (b) 20,000,000 shares of Preferred Stock issuable in
series. No class of capital stock of the Company entitles the holder thereof to
any preemptive rights to purchase or subscribe for shares of any class or any
other securities, other than as the Board of Directors may fix.
The following description of the capital stock of the Company is subject to
the detailed provisions of the Company's Restated Certificate of Incorporation,
as amended (the "Certificate of Incorporation"), and bylaws as currently in
effect (the "Bylaws"). This description does not purport to be complete or to
give full effect to the terms of the provisions of statutory or common law and
is subject to, and qualified in its entirety by reference to, the Certificate of
Incorporation, the Bylaws, and the Rights Agreement, dated as of February 19,
1991, as amended, between the Company and a rights agent (the "Rights
Agreement"), all of which are filed as exhibits to the Registration Statement of
which this Prospectus is a part.
COMMON STOCK
All issued and outstanding shares of Common Stock are fully paid and
nonassessable, and any shares of Common Stock offered hereby will, upon full
payment of the purchase price therefor, likewise be fully paid and
nonassessable. The holders of Common Stock are entitled to one vote for each
share held on all matters submitted to a vote of common stockholders. The Common
Stock does not have cumulative voting rights. Each share of Common Stock is
entitled to participate equally in dividends, as and when declared by the
Company's Board of Directors, and in the distribution of assets in the event of
liquidation, subject in all cases to any prior rights of outstanding shares of
Preferred Stock. The shares of Common Stock have no preemptive or conversion
rights, redemption rights, or sinking fund provisions.
The outstanding shares of Common Stock are listed on the New York Stock
Exchange and trade under the symbol "PDP."
Boston EquiServe L.P. is the transfer agent, registrar, and dividend
disbursing agent for the Common Stock.
PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series. The description set forth below is subject
to and qualified in its entirety by reference to the certificate of designations
establishing a particular series of Preferred Stock, which will be filed with
the SEC in connection with the offering of such series.
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<PAGE> 20
GENERAL. Under the Certificate of Incorporation, the Board of Directors of
the Company is authorized, without further stockholder action, to provide for
the issuance of up to 20,000,000 shares of Preferred Stock in one or more
series. The rights, preferences, privileges, and restrictions, including
dividend rights, voting rights, conversion rights, terms of redemption, and
liquidation preferences, of the Preferred Stock of each series will be fixed or
designated by the Board of Directors pursuant to a certificate of designations.
The specific terms of a particular series of Preferred Stock offered hereby will
be described in a Prospectus Supplement relating to such series and will include
the following: (a) the maximum number of shares to constitute the series and the
distinctive designation thereof; (b) the annual dividend rate, if any, on shares
of the series (or the method of calculating such rate), whether such rate is
fixed or variable or both, the date or dates from which dividends will begin to
accrue or accumulate, and whether dividends will be cumulative; (c) whether the
shares of the series will be redeemable and, if so, the price at and the terms
and conditions on which such shares may be redeemed, including the time during
which such shares may be redeemed and any accumulated dividends thereon that the
holders of such shares shall be entitled to receive upon the redemption thereof;
(d) the liquidation preference, if any, applicable to shares of the series; (e)
whether the shares of the series will be subject to operation of a retirement or
sinking fund and, if so, the extent and manner in which any such fund shall be
applied to the purchase or redemption of such shares for retirement or for other
corporate purposes, and the terms and provisions relating to the operation of
such fund; (f) the terms and conditions, if any, on which the shares of the
series will be convertible into, or exchangeable for, shares of any other class
or classes of capital stock of the Company or another corporation or any series
of any other class or classes, or of any other series of the same class,
including the price or rate of conversion or exchange and the method, if any, of
adjusting the same; (g) the voting rights, if any, on the shares of the series;
(h) whether fractional interests in shares of the series will be offered in the
form of Depositary Shares as described below under "Description of Depositary
Shares"; and (i) any other preferences and relative, participating, optional, or
other special rights or qualifications, limitations, or restrictions thereof.
The Preferred Stock will, when issued, be fully paid and nonassessable.
The transfer agent, registrar, and dividend disbursement agent for a series
of Preferred Stock will be selected by the Company and will be described in the
applicable Prospectus Supplement. The registrar for shares of Preferred Stock
will send notices to stockholders of any meetings at which holders of the
Preferred Stock have the right to elect directors of the Company or to vote on
any other matter.
DESIGNATED PREFERRED STOCK. The Company has designated and reserved for
issuance a series of Preferred Stock (entitled "Series A Convertible Preferred
Stock") consisting of 3,776,400 shares to be issued in exchange for the 6 1/4%
Cumulative Guaranteed Monthly Income Convertible Preferred Shares (the
"Convertible MIPS") issued by Parker & Parsley Capital LLC ("P&P Capital"), a
wholly-owned special purpose finance subsidiary of the Company, under certain
circumstances. As of the date of this Prospectus, no shares of such Preferred
Stock have been issued. Shares of Series A Convertible Preferred Stock are
referred to herein as the "Series A Preferred Shares."
The Series A Preferred Shares will only be issued in exchange for the
Convertible MIPS. Upon the occurrence of certain exchange events, the holders of
a majority of the outstanding Convertible MIPS may, at their option, cause all
(but not less than all) of the outstanding Convertible MIPS to be exchanged, on
a share-for-share basis, for Series A Preferred Shares. The exchange events are
(a) the failure of the holders of the Convertible MIPS to receive, for two
consecutive monthly dividend periods, the full amount of dividend payments, (b)
the failure of holders of the Convertible MIPS to receive any redemption payment
when due, (c) the failure of P&P Capital at any time to maintain a net worth of
at least $2.5 million, (d) the failure of the Company to own, directly or
indirectly, 100% of the capital stock of P&P Capital (other than the Convertible
MIPS or any other preferred or preference stock of P&P Capital), (e) the
bankruptcy of P&P Capital or the Company,
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(f) the dissolution, liquidation, or winding up of P&P Capital or the Company,
and (g) the determination by P&P Capital or the Company, in its sole discretion,
that the withholding or deduction of taxes is required by law and that such
withholding or deduction, if made, would cause a reduction in the amounts to be
received by the holders of Convertible MIPS and the failure by P&P Capital or
the Company, as the case may be, to elect to either pay such additional amounts
as would be necessary so that the net amounts received by holders of Convertible
MIPS would not be reduced or redomicile P&P Capital to another jurisdiction
wherein the withholding or deduction of such taxes would not be required by law.
The following description of certain terms of the Series A Preferred Shares will
be applicable to such shares when issued as described above.
Dividends on the Series A Preferred Shares will be cumulative from the date
of original issuance of such shares and will be payable in United States dollars
at the annual rate of 6 1/4% of the liquidation preference of $50 per share.
Dividends will be paid monthly in arrears on the last day of each calendar
month. Any accumulated and unpaid dividends on the Convertible MIPS at the time
of their exchange for Series A Preferred Shares, as well as certain tax
deductions or withholdings that may have been made with respect to payments on
the Convertible MIPS, will become accumulated and unpaid dividends on the Series
A Preferred Shares issued in exchange.
Each Series A Preferred Share is convertible at the option of the holder at
any time, unless previously redeemed or converted, into shares of Common Stock
at the rate of 1.7778 shares of Common Stock for each Series A Preferred Share
(equivalent to a conversion price of $28 1/8 per share of Common Stock), subject
to adjustment in certain circumstances.
At any time on or after April 1, 1997, the Company, at its option, may
cause the Series A Preferred Shares to be exchanged, in whole or in part, for
the number of shares of Common Stock into which the Series A Preferred Shares
are then convertible, so long as both (a) the closing price of the Common Stock
on any 20 trading days in the period of 30 trading days ending on the trading
day immediately preceding the Company's exercise of such option and (b) the
closing price of the Common Stock on the trading day immediately preceding the
Company's exercise of such option, equal or exceed 125% of the then applicable
conversion price.
From time to time on and after April 1, 1997, the Series A Preferred Shares
will be redeemable, at the option of the Company, in whole or in part, for cash
at an initial redemption price of $52.1875 per share and declining ratably
thereafter to $50 per share on and after April 1, 2004, plus, in each case,
accumulated and unpaid dividends to the date fixed for redemption, but only if
the cash used to make such prepayment is provided to the Company through the
issuance and sale, within one year of such redemption, of common stock or
certain classes of preferred stock of the Company or any of its subsidiaries. In
the case of Series A Preferred Shares called for redemption, the conversion
right will terminate five calendar days prior to the redemption date, but in no
event prior to the end of the 36th monthly dividend period (including monthly
dividend periods on the Convertible MIPS prior to their exchange for Series A
Preferred Shares). The Series A Preferred Shares will not be subject to
mandatory redemption.
The holders of the Series A Preferred Shares generally will have no voting
rights, but will have the right to elect two additional directors of the Company
whenever dividends on the Series A Preferred Shares are in arrears for 18
months.
The Company may not create or authorize any class of shares that ranks
senior to the Series A Preferred Shares as to dividends or liquidation
preference and may not amend the provisions of the Series A Preferred Shares
without the written consent of holders of at least 66 2/3% of the outstanding
Series A Preferred Shares or without a resolution passed by 66 2/3% of the votes
cast at a meeting of the holders of Series A Preferred Shares.
In the event of a voluntary or involuntary bankruptcy, liquidation,
dissolution, or winding up of the Company, the holders of the Series A Preferred
Shares will be entitled to receive out of the net assets of the Company, but
before any distribution is made on any class of shares ranking junior to
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the Series A Preferred Shares, $50 per share in cash plus accumulated and unpaid
dividends (whether or not declared) to the date of payment. After payment of the
full amount of the liquidation distribution to which they are entitled, the
holders of the Series A Preferred Shares will not be entitled to any further
participation in any distribution of assets of the Company.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
The Company's Board of Directors is divided into three classes. The
directors of each class are elected for three-year terms, with the terms of the
three classes staggered so that directors from a single class are elected at
each annual meeting of stockholders. Stockholders may remove a director only for
cause. In general, the Board of Directors, not the stockholders, has the right
to appoint persons to fill vacancies on the Board of Directors.
The Company's Certificate of Incorporation contains a "fair price"
provision that requires the affirmative vote of the holders of at least 80% of
the Company's voting stock and the affirmative vote of at least 66 2/3% of the
Company's voting stock not owned, directly or indirectly, by a Related Person
(hereinafter defined) to approve any merger, consolidation, sale or lease of all
or substantially all of the Company's assets, or certain other transactions
involving a Related Person. For purposes of this fair price provision, a
"Related Person" is any person beneficially owning 10% or more of the voting
stock of the Company who is a party to the transaction at issue, a director who
is also an officer of the Company and is a party to the transaction at issue, an
affiliate of either such person, and certain transferees of those persons. The
voting requirement is not applicable to certain transactions, including those
that are approved by the Company's Continuing Directors (as defined in the
Certificate of Incorporation) or that meet certain "fair price" criteria
contained in the Certificate of Incorporation.
The Company's Certificate of Incorporation further provides that
stockholders may act only at annual or special meetings of stockholders and not
by written consent, that special meetings of stockholders may be called only by
the Company's Board of Directors, and that only business proposed by the Board
of Directors may be considered at special meetings of stockholders.
The Certificate of Incorporation also provides that the only business
(including election of directors) that may be considered at an annual meeting of
stockholders, in addition to business proposed (or persons nominated to be
directors) by the directors of the Company, is business proposed (or persons
nominated to be directors) by stockholders who comply with the notice and
disclosure requirements set forth in the Certificate of Incorporation. In
general, the Certificate of Incorporation requires that a stockholder give the
Company notice of proposed business or nominations no later than 60 days before
the annual meeting of stockholders (meaning the date on which the meeting is
first scheduled and not postponements or adjournments thereof) or (if later) 10
days after the first public notice of the annual meeting is sent to common
stockholders. In general, the notice must also contain information about the
stockholder proposing the business or nomination, his interest in the business,
and (with respect to nominations for director) information about the nominee of
the nature ordinarily required to be disclosed in public proxy solicitations.
The stockholder also must submit a notarized letter from each of his nominees
stating the nominee's acceptance of the nomination and indicating the nominee's
intention to serve as director if elected.
The Company's Certificate of Incorporation also restricts the ability of
stockholders to interfere with the powers of the Board of Directors in certain
specified ways, including the constitution and composition of committees and the
election and removal of officers.
The Company's Certificate of Incorporation provides that approval by the
holders of at least 66 2/3% of the outstanding Company voting stock is required
to amend the provisions of the Certificate of Incorporation discussed above and
certain other provisions, except that (a) approval by the holders of at least
80% of the outstanding Company voting stock, together with approval by the
holders of at least 66 2/3% of the outstanding voting stock not owned, directly
or indirectly, by the Related Person, is required to amend the fair price
provisions and (b) approval of the holders of at
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least 80% of the outstanding voting stock is required to amend the provisions
prohibiting stockholders from acting by written consent.
DELAWARE ANTI-TAKEOVER STATUTE
The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company for three years
following the date that person becomes an interested stockholder unless (a)
before that person became an interested stockholder, the Company's Board of
Directors approved the transaction in which the interested stockholder became an
interested stockholder or approved the business combination, (b) upon completion
of the transaction that resulted in the interested stockholder's becoming an
interested stockholder, the interested stockholder owns at least 85% of the
Company voting stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of the Company and by
employee stock plans that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer), or (c) following the transaction in which that person
became an interested stockholder, the business combination is approved by the
Company's Board of Directors and authorized at a meeting of stockholders by the
affirmative vote of the holders of at least two-thirds of the outstanding
Company voting stock not owned by the interested stockholder.
Under Section 203, these restrictions 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 Company
and a person who was not an interested stockholder during the previous three
years or who became an interested stockholder with the approval of a majority of
the Company's directors, if that extraordinary transaction is approved or not
opposed by a majority of the directors who were directors before any person
became an interested stockholder in the previous three years or who were
recommended for election or elected to succeed such directors by a majority of
such directors then in office.
COMMON STOCK PURCHASE RIGHTS
Pursuant to the Rights Agreement, each share of Common Stock carries with
it one common share purchase right (a "Right"). The Rights become exercisable
upon certain potential change-in-control events. When exercisable and upon the
occurrence of certain events, the Rights will entitle holders to purchase shares
of Common Stock at a substantial discount to the market price for such shares at
such date. Exercise of the Rights will cause substantial dilution to a person or
group attempting to acquire control of the Company without the approval of the
Board of Directors. Except under certain circumstances, the Board of Directors
may cause the Company to redeem the Rights in whole, but not in part, at a price
of $.01 per Right. The Rights will not interfere with any merger or other
business combination approved by the Board of Directors. The Rights expire on
February 19, 2001 if not redeemed earlier. The Rights have no voting or dividend
privileges. Until such time as the Rights become exercisable, they are attached
to and do not trade separately from the Common Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares (as defined below) and Depositary Receipts (as defined below) does not
purport to be complete and is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipts relating to
each series of Preferred Stock that will be filed with the SEC in connection
with the offering of such series of Preferred Stock.
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GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
depositary to the public of receipts for depositary shares ("Depositary
Shares"), each of which will represent fractional interests of a particular
series of Preferred Stock (which will be set forth in the Prospectus Supplement
relating to a particular series of Preferred Stock).
The shares of any series of Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50 million. The Prospectus Supplement relating
to a series of Depositary Shares will set forth the name and address of the
depositary with respect to such Depositary Shares. Subject to the terms of the
Deposit Agreement, each owner of Depositary Shares will be entitled, in
proportion to the applicable fractional interests in shares of Preferred Stock
underlying such Depositary Shares, to all the rights and preferences of the
Preferred Stock underlying such Depositary Shares (including dividend, voting,
redemption, conversion, and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional
interests in shares of the related series of Preferred Stock in accordance with
the terms of the offering described in the related Prospectus Supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to Preferred Stock to the record holders of
Depositary Shares relating to such Preferred Stock in proportion to the numbers
of such Depositary Shares owned by such holders on the relevant record date. The
depositary shall distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and the balance not so distributed shall be added to and treated as part of the
next sum received by the depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the depositary determines that it is not feasible to
make such distribution, in which case the depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to the holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the depositary. The depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the depositary, the depositary will redeem as of the same redemption
date the number of Depositary Shares relating to shares of Preferred Stock so
redeemed. If less than all the Depositary
22
<PAGE> 25
Shares are to be redeemed, the Depositary Shares to be redeemed will be selected
by lot or pro rata as may be determined by the depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the money, securities,
or other property payable upon such redemption and any money, securities, or
other property to which the holders of such Depositary Shares were entitled upon
such redemption upon surrender to the depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action that may be deemed necessary by the
depositary in order to enable the depositary to do so.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the depositary. However, any amendment that materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the depositary only if (a)
all outstanding Depositary Shares relating thereto have been redeemed or (b)
there has been a final distribution with respect to the Preferred Stock of the
relevant series in connection with any liquidation, dissolution, or winding up
of the Company and such distribution has been distributed to the holders of the
related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay transfer and other taxes and governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the depositary,
any such resignation or removal to take effect upon the appointment of a
successor depositary and its acceptance of such appointment. Such successor
depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50 million.
23
<PAGE> 26
MISCELLANEOUS
The depositary will forward to the holders of Depositary Shares all reports
and communications from the Company that are delivered to the depositary and
that the Company is required to furnish to the holders of the Preferred Stock.
Neither the depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding with respect to any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares, or other persons
believed to be competent and on documents believed to be genuine.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock, or Common Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock, or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from any such Offered
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Warrant Agent"). The Warrant Agent
will act solely as an agent of the Company in connection with the Warrants and
will not assume any obligation or relationship of agency or trust for or with
any holders or beneficial owners of Warrants. The following summary of certain
provisions of the Warrants does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the provisions of the Warrant
Agreement that will be filed with the SEC in connection with the offering of
such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Debt Warrants
will describe the terms of such Debt Warrants, including the following: (a) the
title of such Debt Warrants; (b) the offering price for such Debt Warrants, if
any; (c) the aggregate number of such Debt Warrants; (d) the designation and
terms of the Debt Securities purchasable upon exercise of such Debt Warrants;
(e) if applicable, the designation and terms of the Debt Securities with which
such Debt Warrants are issued and the number of such Debt Warrants issued with
each such Debt Security; (f) if applicable, the date from and after which such
Debt Warrants and any Debt Securities issued therewith will be separately
transferable; (g) the principal amount of Debt Securities purchasable upon
exercise of a Debt Warrant and the price at which such principal amount of Debt
Securities may be purchased upon exercise (which price may be payable in cash,
securities, or other property); (h) the date on which the right to exercise such
Debt Warrants shall commence and the date on which such right shall expire; (i)
if applicable, the minimum or maximum amount of such Debt Warrants that may be
exercised at any one time; (j) whether the Debt Warrants represented by the Debt
Warrant certificates or Debt Securities that may be issued upon exercise of the
Debt Warrants will be issued in registered or bearer form; (k) information with
respect to book-entry procedures, if any; (l) the currency or currency units in
which the offering price, if any, and the exercise price are payable; (m) if
applicable, a discussion of material United States federal income tax
considerations; (n) the antidilution provisions of such Debt Warrants, if any;
(o) the redemption or call provisions, if any, applicable to such Debt Warrants;
and (p) any additional terms of the Debt Warrants, including terms, procedures,
and limitations relating to the exchange and exercise of such Debt Warrants.
24
<PAGE> 27
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Preferred
Stock Warrants or Common Stock Warrants will describe the terms of such
Warrants, including the following: (a) the title of such Warrants; (b) the
offering price for such Warrants, if any; (c) the aggregate number of such
Warrants; (d) the designation and terms of the Common Stock or Preferred Stock
purchasable upon exercise of such Warrants; (e) if applicable, the designation
and terms of the Offered Securities with which such Warrants are issued and the
number of such Warrants issued with each such Offered Security; (f) if
applicable, the date from and after which such Warrants and any Offered
Securities issued therewith will be separately transferable; (g) the number of
shares of Common Stock or Preferred Stock purchasable upon exercise of a Warrant
and the price at which such shares may be purchased upon exercise (which price
may be payable in cash, securities, or other property); (h) the date on which
the right to exercise such Warrants shall commence and the date on which such
right shall expire; (i) if applicable, the minimum or maximum amount of such
Warrants that may be exercised at any one time; (j) the currency or currency
units in which the offering price, if any, and the exercise price are payable;
(k) if applicable, a discussion of material United States federal income tax
considerations; (l) the antidilution provisions of such Warrants, if any; (m)
the redemption or call provisions, if any, applicable to such Warrants; and (n)
any additional terms of the Warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in or outside the United States
through underwriters, brokers or dealers, directly to one or more purchasers, or
through agents. The Prospectus Supplement with respect to the Offered Securities
will set forth the terms of the offering of the Offered Securities, including
the name or names of any underwriters, dealers, or agents, the purchase price of
the Offered Securities and the proceeds to the Company from such sale, any
delayed delivery arrangements, any underwriting discounts and other items
constituting underwriters' compensation, the initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers, and any
securities exchanges on which the Offered Securities may be listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering, and if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters or agents to purchase the Offered Securities will be subject to
conditions precedent and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased. The initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
The Company may also sell the Offered Securities pursuant to one or more
standby agreements with one or more underwriters in connection with the call for
redemption of a specified class or series of any securities of the Company or
any subsidiary of the Company. In such a standby agreement, the underwriter or
underwriters would agree either (a) to purchase from the Company up to the
number of shares of Common Stock that would be issuable upon conversion of all
of the shares of such class or series of securities of the Company or its
subsidiary at an agreed price per share of Common Stock or (b) to purchase from
the Company up to a specified dollar amount of Offered Securities at an agreed
price per Offered Security which price may be fixed or may be
25
<PAGE> 28
established by formula or other method and which may or may not relate to market
prices of the Common Stock or any other security of the Company then
outstanding. The underwriter or underwriters would also agree, if applicable, to
convert into Common Stock or other security of the Company any securities of
such class or series held or purchased by the underwriter or underwriters. The
underwriter or underwriters may assist in the solicitation of conversions by
holders of such class or series of securities.
If dealers are used in the sale of Offered Securities with respect to which
this Prospectus is delivered, the Company will sell such Offered Securities to
the dealers as principals. The dealers may then resell such Offered Securities
to the public at varying prices to be determined by such dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Offered Securities, underwriters or
agents may receive compensation from the Company or from purchasers of Offered
Securities for whom they may act as agents in the form of discounts,
concessions, or commissions. Underwriters, agents, and dealers participating in
the distribution of the Offered Securities may be deemed to be underwriters, and
any discounts or commissions received by them from the Company and any profit on
the resale of the Offered Securities by them may be deemed to be underwriting
discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters, or dealers to solicit offers from certain types of
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers, and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments that such agents, dealers, or underwriters may be
required to make with respect thereto. Agents, dealers, and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
The Offered Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be a market for the Offered
Securities.
LEGAL OPINIONS
Certain legal matters in connection with the Offered Securities will be
passed upon for the Company by Vinson & Elkins L.L.P., Dallas, Texas, and for
any underwriters or agents by a firm named in the Prospectus Supplement relating
to a particular issue of Offered Securities. Michael D. Wortley, a partner of
Vinson & Elkins L.L.P., is also a director of the Company.
26
<PAGE> 29
EXPERTS
The consolidated financial statements of the Company as of December 31,
1995 and 1994, and for each of the years in the three-year period ended December
31, 1995, have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing. The report of KPMG Peat Marwick LLP covering the
December 31, 1993, consolidated financial statements refers to a change in the
method of accounting for income taxes. The report of KPMG Peat Marwick LLP
covering the December 31, 1995, consolidated financial statements refers to a
change in the method of accounting for the impairment of long-lived assets and
for long-lived assets to be disposed of.
27
<PAGE> 30
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN A PROSPECTUS
SUPPLEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR ANY
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 3
Ratios of Earnings to Fixed Charges and
Earnings to Fixed Charges and
Preferred Stock Dividends............ 3
Description of Debt Securities......... 4
Description of Capital Stock........... 17
Description of Depositary Shares....... 21
Description of Warrants................ 24
Plan of Distribution................... 25
Legal Opinions......................... 26
Experts................................ 27
</TABLE>
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[PARKER PARSLEY LOGO]
PARKER & PARSLEY
PETROLEUM COMPANY
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
------------------------
PROSPECTUS
------------------------
FEBRUARY , 1997
------------------------------------------------------
------------------------------------------------------
<PAGE> 31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 -- OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses to be incurred by the
registrant, Parker & Parsley Petroleum Company (the "Company"), in connection
with the issuance and distribution of the securities being registered. Except
for the Securities and Exchange Commission registration fee, all amounts shown
are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $121,212
Accounting fees and expenses................................ 50,000
Legal fees and expenses..................................... 75,000
Transfer agent's fees and expenses.......................... 10,000
Blue Sky fees and expenses, including counsel fees.......... 10,000
Fees of rating agencies..................................... 375,000
Listing fees................................................ 30,000
Printing and engraving expenses............................. 100,000
Miscellaneous............................................... 15,000
--------
Total............................................. $786,212
========
</TABLE>
ITEM 15 -- INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Twelve of the Restated Certificate of Incorporation of the
registrant provides that the registrant must indemnify its officers and
directors to the extent allowed by the Delaware General Corporation Law.
Pursuant to Section 145 of the Delaware General Corporation Law, the registrant
generally has the power to indemnify its present and former directors and
officers against expenses and liabilities incurred by them in connection with
any suit to which they are, or are threatened to be made, a party by reason of
their serving in those positions so long as they acted in good faith and in a
manner they reasonably believed to be in, or not opposed to, the best interests
of the registrant, and with respect to any criminal action, they had no
reasonable cause to believe their conduct was unlawful. With respect to suits by
or in the right of the registrant, however, indemnification is generally limited
to attorneys' fees and other expenses and is not available if the person is
adjudged to be liable to the registrant unless the court determines that
indemnification is appropriate. The statute expressly provides that the power to
indemnify authorized thereby is not exclusive of any rights granted under any
by-law, agreement, vote of stockholders or disinterested directors, or
otherwise. The registrant also has the power to purchase and maintain insurance
for its directors and officers. Additionally, Article Twelve of the Restated
Certificate of Incorporation provides that, in the event that an officer or
director files suit against the registrant seeking indemnification of
liabilities or expenses incurred, the burden will be on the registrant to prove
that the indemnification would not be permitted under the Delaware General
Corporation Law.
The registrant has entered into Indemnification Agreements with each of its
directors and officers. These agreements provide that the registrant must,
within 30 days of a request, indemnify an officer or director for liabilities
incurred to the fullest extent permitted by the Delaware General Corporation
Law. The registrant must, within two days of a request, indemnify an officer or
director for expenses incurred in the defense of a claim or other proceeding.
The obligation of the registrant to provide the indemnification does not apply
if, before the date on which the registrant must provide the indemnification,
the registrant's Board of Directors, or a representative chosen by the Board of
Directors, concludes that indemnification would be improper under the Delaware
General Corporation Law.
II-1
<PAGE> 32
The preceding discussion of the registrant's Restated Certificate of
Incorporation, Section 145 of the Delaware General Corporation Law, and the
Indemnification Agreements is not intended to be exhaustive and is qualified in
its entirety by the Restated Certificate of Incorporation, Section 145 of the
Delaware General Corporation Law, and the Indemnification Agreements.
ITEM 16 -- EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1* -- Underwriting Agreement.
4.1 -- Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-4,
Registration No. 33-38436).
4.2 -- Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on
Form S-4, Registration No. 33-38436).
4.3 -- Form of Certificate of Common Stock, par value $.01 per
share, of the Company (incorporated by reference to
Exhibit 4.2 to the Company's Registration Statement on
Form S-4, Registration No. 33-38436).
4.4 -- Rights Agreement of the Company (incorporated by
reference to Exhibit 4.1 to the Company's Current Report
on Form 8-K dated February 19, 1991, File No. 1-10695).
4.4A -- First Amendment to Rights Agreement of the Company, dated
as of March 18, 1994 (incorporated by reference to
Exhibit 4.4A to the Company's Registration Statement on
Form S-3, Registration No. 33-79920).
4.4B -- Certificate of Designations of Series A Convertible
Preferred Stock of the Company, dated March 24, 1994
(incorporated by reference to Exhibit 4.4B to the
Company's Registration Statement on Form S-3,
Registration No. 33-79920).
4.5 -- Indenture between the Company and The Chase Manhattan
Bank (National Association) dated April 12, 1995
(incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K dated April 12,
1995, File No. 1-10695).
4.6* -- Form of Senior Debt Security.
4.7* -- Form of Subordinated Debt Security.
4.8* -- Form of Deposit Agreement.
4.9* -- Form of Depositary Receipt.
4.10* -- Form of Warrant Agreement.
4.11* -- Form of Warrant Certificate.
4.12 -- Form of 8 7/8% Senior Notes Due 2005 dated as of April
12, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate dated
April 12, 1995, establishing the terms of the 8 7/8%
Senior Notes Due 2005 pursuant to the Indenture
(incorporated by reference to Exhibit 4.2 to the
Company's Quarterly Report on Form 10-Q for the period
ended June 30, 1995, File No. 1-10695).
</TABLE>
II-2
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.13 -- Form of 8 1/4% Senior Notes Due 2007 dated as of August
22, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate dated
August 22, 1995, establishing the terms of the 8 1/4%
Senior Notes Due 2007 pursuant to the Indenture
(incorporated by reference to Exhibit 1.2 to the
Company's Current Report on Form 8-K dated August 17,
1995, File No. 1-10695).
5** -- Opinion of Vinson & Elkins L.L.P. as to the legality of
the securities to be registered.
12** -- Computation of consolidated ratios of earnings to fixed
charges.
23.1** -- Consent of KPMG Peat Marwick.
23.2** -- Consent of Cawley, Gillespie & Associates, Inc.
23.3** -- Consent of Netherland, Sewell & Associates, Inc.
23.4 -- Consent of Vinson & Elkins L.L.P. (included in the
opinion filed as Exhibit 5 to this Registration
Statement).
25** -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of trustee.
</TABLE>
- ---------------
* To be filed.
** Filed herewith.
ITEM 17 -- UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement.
(1) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(2) 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 thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(3) 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 clauses (1) and (2) above do not apply if the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference into this Registration Statement;
(b) 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 therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
II-3
<PAGE> 34
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 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
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the provisions described in Item 15 above or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 35
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 Midland, Texas, on February 6, 1997.
PARKER & PARSLEY PETROLEUM COMPANY
By: /s/ Scott D. Sheffield
------------------------------------
Scott D. Sheffield, President
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. Each person whose signature appears below
hereby authorizes and appoints Scott D. Sheffield, Steven L. Beal, and Mark L.
Withrow, or any of them, as his attorney-in-fact to sign on his behalf
individually and in the capacity stated below all amendments and post-effective
amendments to this Registration Statement (including any additional registration
statement filed pursuant to Rule 462 of the Securities Act of 1933 with respect
to this Registration Statement) as that attorney-in-fact may deem necessary or
appropriate.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ Scott D. Sheffield Chairman of the Board, President, February 6, 1997
- ----------------------------------------------------- Chief Executive Officer, and
Scott D. Sheffield Director (principal executive
officer)
/s/ Mel Fischer Executive Vice President and February 6, 1997
- ----------------------------------------------------- Director
Mel Fischer
/s/ Steven L. Beal Senior Vice President, Chief February 6, 1997
- ----------------------------------------------------- Financial Officer, Treasurer and
Steven L. Beal Assistant Secretary (principal
financial and accounting
officer)
Director
- -----------------------------------------------------
R. Hartwell Gardner
/s/ James L. Houghton Director February 6, 1997
- -----------------------------------------------------
James L. Houghton
Director
- -----------------------------------------------------
Jerry P. Jones
/s/ Charles E. Ramsey, Jr. Director
- -----------------------------------------------------
Charles E. Ramsey, Jr.
Director
- -----------------------------------------------------
Arthur L. Smith
Director
- -----------------------------------------------------
Edward O. Vetter
/s/ Michael D. Wortley Director February 6, 1997
- -----------------------------------------------------
Michael D. Wortley
</TABLE>
II-5
<PAGE> 36
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
1.1* -- Underwriting Agreement.
4.1 -- Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-4,
Registration No. 33-38436).
4.2 -- Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on
Form S-4, Registration No. 33-38436).
4.3 -- Form of Certificate of Common Stock, par value $.01 per
share, of the Company (incorporated by reference to
Exhibit 4.2 to the Company's Registration Statement on
Form S-4, Registration No. 33-38436).
4.4 -- Rights Agreement of the Company (incorporated by
reference to Exhibit 4.1 to the Company's Current Report
on Form 8-K dated February 19, 1991, File No. 1-10695).
4.4A -- First Amendment to Rights Agreement of the Company, dated
as of March 18, 1994 (incorporated by reference to
Exhibit 4.4A to the Company's Registration Statement on
Form S-3, Registration No. 33-79920).
4.4B -- Certificate of Designations of Series A Convertible
Preferred Stock of the Company, dated March 24, 1994
(incorporated by reference to Exhibit 4.4B to the
Company's Registration Statement on Form S-3,
Registration No. 33-79920).
4.5 -- Indenture between the Company and The Chase Manhattan
Bank (National Association) dated April 12, 1995
(incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K dated April 12,
1995, File No. 1-10695).
4.6* -- Form of Senior Debt Security.
4.7* -- Form of Subordinated Debt Security.
4.8* -- Form of Deposit Agreement.
4.9* -- Form of Depositary Receipt.
4.10* -- Form of Warrant Agreement.
4.11* -- Form of Warrant Certificate.
4.12 -- Form of 8 7/8% Senior Notes Due 2005 dated as of April
12, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate dated
April 12, 1995, establishing the terms of the 8 7/8%
Senior Notes Due 2005 pursuant to the Indenture
(incorporated by reference to Exhibit 4.2 to the
Company's Quarterly Report on Form 10-Q for the period
ended June 30, 1995, File No. 1-10695).
4.13 -- Form of 8 1/4% Senior Notes Due 2007 dated as of August
22, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate dated
August 22, 1995, establishing the terms of the 8 1/4%
Senior Notes Due 2007 pursuant to the Indenture
(incorporated by reference to Exhibit 1.2 to the
Company's Current Report on Form 8-K dated August 17,
1995, File No. 1-10695).
</TABLE>
<PAGE> 37
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
5** -- Opinion of Vinson & Elkins L.L.P. as to the legality of
the securities to be registered.
12** -- Computation of consolidated ratios of earnings to fixed
charges.
23.1** -- Consent of KPMG Peat Marwick.
23.2** -- Consent of Cawley, Gillespie & Associates, Inc.
23.3** -- Consent of Netherland, Sewell & Associates, Inc.
23.4 -- Consent of Vinson & Elkins L.L.P. (included in the
opinion filed as Exhibit 5 to this Registration
Statement).
25** -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of trustee.
</TABLE>
- ---------------
* To be filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 5.1
[VINSON & ELKINS LETTERHEAD]
February 6, 1997
Parker & Parsley Petroleum Company
303 West Wall, Suite 101
Midland, Texas 79701
Re: Parker & Parsley Petroleum Company
Registration Statement on Form S-3
Debt Securities
Preferred Stock, par value $.01 per share
Depositary Shares
Common Stock, par value $.01 per share
Warrants
Gentlemen:
We have acted as counsel for Parker & Parsley Petroleum Company, a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933 (the "Securities Act") on a Registration Statement
on Form S-3 (the "Registration Statement") of the offer and sale from time to
time pursuant to Rule 415 under the Securities Act of the following securities
for an aggregate initial offering price not to exceed $400,000,000, including
$127,910,000 previously registered on the Company's Registration Statement on
Form S-3 (Registration No. 33-79920) (i) unsecured debt securities of the
Company ("Debt Securities"); (ii) shares of preferred stock, par value $.01 per
share, of the Company ("Preferred Stock"); (iii) depositary shares representing
fractional interests in Preferred Stock ("Depositary Shares"); (iv) shares of
common stock, par value $.01 share, of the Company ("Common Stock"); and (v)
warrants ("Warrants") to purchase Debt Securities, Preferred Stock, or Common
Stock (the Debt Securities, Preferred Stock, Depositary Shares, Common Stock
and Warrants are collectively referred to as the "Securities").
In reaching the opinions set forth herein, we have reviewed those
agreements, certificates of public officials, officers of the Company and other
persons, records, documents, and matters of law that this firm deemed relevant,
including but not limited to (a) the Restated Certificate of Incorporation and
the Restated By-Laws of the Company, (b) resolutions adopted by the Board of
Directors of the Company, and (c) the Indenture incorporated by reference as
Exhibit 4.5 to the Registration Statement and executed by the Company and The
Chase Manhattan Bank (National Association) dated April 12, 1995 (together with
any other indenture that the Company and a trustee
<PAGE> 2
February 6, 1997
Page 2
may execute with respect to any Debt Securities, the "Indenture"), pursuant to
which Debt Securities may be issued.
Based upon and subject to the foregoing and subject further to the
assumptions, exceptions and qualifications hereinafter stated, we express the
following opinions:
1. With respect to shares of Common Stock, when both (A) the Board of
Directors of the Company or, to the extent permitted by Section 141(c) of the
General Corporation Law of the State of Delaware, a duly constituted and acting
committee thereof (such Board of Directors or committee being hereinafter
referred to as the "Board") has taken all necessary corporate action to approve
the issuance of and the terms of the offering of the shares of Common Stock and
related matters and (B) certificates representing the shares of Common Stock
have been duly executed, countersigned, registered and delivered either (i) in
accordance with the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor (not
less than the par value of the Common Stock) provided for therein or (ii) upon
conversion or exercise of any other Security, in accordance with the terms of
such Security or the instrument governing such Security providing for such
conversion or exercise as approved by the Board, for the consideration approved
by the Board (not less than the par value of the Common Stock), then the shares
of Common Stock will be legally issued, fully paid and nonassessable.
2. With respect to shares of Preferred Stock, when both (A) the Board
has taken all necessary corporate action to approve the issuance and terms of
the shares of Preferred Stock, the terms of the offering thereof, and related
matters, including the adoption of a Certificate of Designation relating to
such Preferred Stock (a "Certificate") and the filing of the Certificate with
the Secretary of State of the State of Delaware, and (B) certificates
representing the shares of Preferred Stock have been duly executed,
countersigned, registered and delivered either (i) in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor (not less than the par
value of the Preferred Stock) provided for therein or (ii) upon conversion or
exercise of any other Security, in accordance with the terms of such Security
or the instrument governing such Security providing for such conversion or
exercise as approved by the Board, for the consideration approved by the Board
(not less than the par value of the Preferred Stock), then the shares of
Preferred Stock will be legally issued, fully paid and nonassessable.
3. With respect to Depositary Shares, when (A) the Board has taken all
necessary corporate action to approve the issuance and terms of the Depositary
Shares, the terms of the offering thereof, and related matters, including the
adoption of a Certificate relating to the Preferred Stock underlying such
Depositary Shares and the filing of the Certificate with the Secretary of State
of the State of Delaware, (B) the Depositary Agreement or Agreements relating
to the Depositary Shares and the related Depositary Receipts have been duly
authorized and validly executed and delivered by the Company and the Depositary
appointed by the Company, (C) the shares of Preferred Stock underlying such
Depositary Shares have been deposited with a bank or trust company (which meets
the requirements for the Depositary set forth in the Registration Statement)
under the applicable
<PAGE> 3
February 6, 1997
Page 3
Depositary Agreements, and (D) the Depositary Receipts representing the
Depositary Shares have been duly executed, countersigned, registered and
delivered in accordance with the appropriate Depositary Agreement and the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor provided for therein, the
Depositary Shares will be legally issued.
4. With respect to Debt Securities to be issued under the Indenture,
when (A) the Indenture has been duly authorized and validly executed and
delivered by the Company to the trustee, (B) the Indenture has been duly
qualified under the Trust Indenture Act of 1939, (C) the Board has taken all
necessary corporate action to approve the issuance and terms of such Debt
Securities, the terms of the offering thereof and related matters, and (D) such
Debt Securities have been duly executed, authenticated, issued and delivered in
accordance with the provisions of the Indenture and the applicable definitive
purchase, underwriting or similar agreement approved by the Board upon payment
of the consideration therefor provided for therein, such Debt Securities will
be legally issued and will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as such enforcement is subject to (i) any applicable bankruptcy, insolvency,
reorganization or other law relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5. With respect to the Warrants, when (A) the Board has taken all
necessary corporate action to approve the creation of and the issuance and
terms of the Warrants, the terms of the offering thereof, and related matters,
(B) the Warrant Agreement or Agreements relating to the Warrants have been duly
authorized and validly executed and delivered by the Company and the Warrant
Agent appointed by the Company, and (C) the Warrants or certificates
representing the Warrants have been duly executed, countersigned, registered
and delivered in accordance with the appropriate Warrant Agreement or
Agreements and the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor
provided for therein, the Warrants will be legally issued.
The opinions expressed above are subject in all respects to the
following assumptions, exceptions and qualifications:
a. We have assumed that (i) all information contained in all documents
reviewed by us is true and correct, (ii) all signatures on all documents
reviewed by us are genuine, (iii) all documents submitted to us as originals
are true and complete, (iv) all documents submitted to us as copies are true
and complete copies of the originals thereof, (v) each natural person signing
any document reviewed by us had the legal capacity to do so, and (vi) each
person signing in a representative capacity any document reviewed by us had
authority to sign in such capacity.
b. We have assumed that (i) the Registration Statement and any
amendments thereto (including post-effective amendments) will have become
effective and comply with all applicable laws; (ii) the Registration Statement
will be effective and will comply with all applicable laws at the
<PAGE> 4
February 6, 1997
Page 4
time the Securities are offered or issued as contemplated by the Registration
Statement (if such offering or issuance requires the delivery of a prospectus
under the Securities Act or pursuant to any other law); (iii) a Prospectus
Supplement will have been prepared and filed with the Securities and Exchange
Commission describing the Securities offered thereby and will comply with all
applicable laws; (iv) all Securities will be issued and sold in compliance with
applicable federal and state securities laws and in the manner stated in the
Registration Statement and the appropriate Prospectus Supplement; (v) a
definitive purchase, underwriting or similar agreement with respect to any
Securities offered or issued will have been duly authorized and validly
executed and delivered by the Company and the other parties thereto; and (vi)
any Securities issuable upon conversion, exchange or exercise of any Security
being offered or issued will be duly authorized, created and, if appropriate,
reserved for issuance upon such conversion, exchange or exercise.
c. In rendering the opinion in paragraph 4, we have assumed that the
trustee is or, at the time the Indenture is signed, will be qualified to act as
trustee under the Indenture and that the Trustee has or will have duly executed
and delivered the Indenture.
d. We express no opinion with respect to (i) the enforceability of
provisions in the Indenture or any other agreement or instrument with respect
to delay or omission of enforcement of rights or remedies, or waivers of
defenses, or waivers of benefits of stay, extension, moratorium, redemption,
statutes of limitation, or other nonwaivable benefits bestowed by operation of
law; or (ii) the enforceability of indemnification provisions to the extent
they purport to relate to liabilities resulting from or based upon negligence
or any violation of federal or state securities or blue sky laws.
e. We express no opinion as to the requirements of or compliance with
federal or state securities laws or regulations.
f. We note that the Indenture by its terms purports to be governed by
the laws of the State of New York and that the terms of Depositary Shares and
Warrants, when determined, may be governed by the laws of a jurisdiction other
than the State of Texas or other than the General Corporation Law of the State
of Delaware. While we express no opinion with respect to the laws of the State
of New York or such other jurisdictions in rendering these opinions, we have
assumed that the internal laws of the State of New York and such other
jurisdictions are the same as the internal laws of the State of Texas. We have
not conducted any analysis to determine whether that assumption is correct.
g. The opinions expressed in this letter are limited to the laws of
the State of Texas, the General Corporation Law of the State of Delaware, and
the federal laws of the United States of America. You should be aware that we
are not admitted to the practice of law in the State of Delaware.
We consent to the filing of this opinion of counsel as Exhibit 5 to
the Registration Statement. We also consent to the reference to us under the
heading "Legal Opinions" in the prospectus forming
<PAGE> 5
February 6, 1997
Page 5
a part of the Registration Statement. In giving this consent, we do not admit
that we are in the category of persons whose consent is required under Section
7 of the Securities Act or the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
We disclaim any duty to advise you regarding any changes in, or
otherwise communicate with you with respect to, the matters addressed herein.
Yours very truly,
VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 12
PARKER & PARSLEY PETROLEUM COMPANY
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio)
<TABLE>
<CAPTION>
Nine Months
ended Year ended December 31,
September 30, -------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Pretax earnings (loss) $ 163,031 $ (150,007) $ (20,491) $ 48,403 $ 30,146 $ 15,359
---------- ---------- ---------- ---------- ---------- ----------
Adjustments:
Add fixed charges:
Interest:
Expensed 36,105 65,449 50,552 23,338 14,708 7,759
Capitalized - - - - 733 2,079
Rental expense attributable
to interest (a) 725 1,200 500 567 367 333
---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges 36,830 66,649 51,052 23,905 15,808 10,171
---------- ---------- ---------- ---------- ---------- ----------
Deduct:
Interest capitalized - - - - 733 2,079
---------- ---------- ---------- ---------- ---------- ----------
Total deducts - - - - 733 2,079
---------- ---------- ---------- ---------- ---------- ----------
Adjusted earnings (loss) $ 199,861 $ (83,358) $ 30,561 $ 72,308 $ 45,221 $ 23,451
========== ========== ========== ========== ========== ==========
Ratio of earnings to fixed
charges (b) $ 5.43 (c) (c) $ 3.02 $ 2.86 $ 2.31
========== ========== ========== ========== ========== ==========
<CAPTION>
Pro Forma Combined
----------------------------
Nine Months
ended Year ended
September 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
Pretax earnings (loss) $ 72,287 $ (113,313)
---------- ----------
Adjustments:
Add fixed charges:
Interest:
Expensed 30,670 42,339
Capitalized - -
Rental expense attributable
to interest (a) 725 752
---------- ----------
Total fixed charges 31,395 43,091
---------- ----------
Deduct:
Interest capitalized - -
---------- ----------
Total deducts - -
---------- ----------
Adjusted earnings (loss) $ 103,682 $ (70,222)
========== ==========
Ratio of earnings to fixed
charges (b) $ 3.30 (c)
========== ==========
</TABLE>
- ----------
(a) Assumes the interest expense attributable to rental expense approximates
one-third of rental expense.
(b) For purposes of computing such ratio, earnings consist of income (loss)
before income taxes, extraordinary item and cumulative effect of accounting
change plus fixed charges net of interest capitalized. Fixed charges
consist of interest expense, interest capitalized and the portion of
rental expense attributable to interest.
(c) The Company's 1995 earnings (computed for purposes of this ratio), on both
a historical and pro forma basis, and the 1994 earnings on a historical
basis were inadequate to cover its fixed charges. The amount of such
deficiency was $150 million and $20.5 million, respectively, on a
historical basis and $113.3 million for 1995 on a pro forma basis.
12
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Parker & Parsley Petroleum Company
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the prospectus.
Our report refers to changes in the methods of accounting for income taxes and
for the impairment of long-lived assets and for long-lived assets to be
disposed of.
KPMG PEAT MARWICK LLP
Midland, Texas
February 6, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
As independent oil and gas consultants, Cawley, Gillespie & Associates,
Inc. hereby consent to (a) the use of our audit letter prepared for Parker &
Parsley Petroleum Company ("Parker & Parsley") effective December 31, 1995, (b)
all references to our firm included in or made a part of Parker & Parsley's
Annual Report on Form 10-K for the year ended December 31, 1995 (the "1995 Form
10-K") and (c) the incorporation by reference into Parker & Parsley's
Registration Statement on Form S-3 of all references to our firm included in or
made a part of the 1995 Form 10-K.
CAWLEY, GILLESPIE & ASSOCIATES, INC.
Fort Worth, Texas
February 5, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
As independent oil and gas consultants, Netherland, Sewell & Associates,
Inc. hereby consents to (a) the use of our audit letter prepared for Parker &
Parsley Petroleum Company ("Parker & Parsley") effective December 31, 1995, (b)
all references to our firm included in or made a part of Parker & Parsley's
Annual Report on Form 10-K for the year ended December 31, 1995 (the "1995 Form
10-K") and (c) the incorporation by reference into Parker & Parsley's
Registration Statement on Form S-3 of all references to our firm included in or
made a part of the 1995 Form 10-K.
NETHERLAND, SEWELL & ASSOCIATES, INC.
/s/ FREDERIC D. SEWELL
-------------------------------------------
Frederic D. Sewell
President
Dallas, Texas
February 5, 1997
<PAGE> 1
EXHIBIT 25
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
PARKER & PARSLEY PETROLEUM COMPANY
(Exact name of obligor as specified in its charter)
(See table for additional registrants)
DELAWARE 74-2570602
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
303 WEST WALL, SUITE 101
MIDLAND, TEXAS 79701
(Address of principal executive offices) (Zip Code)
-------------------------
DEBT SECURITIES
(Title of Indenture securities)
--------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-06249, which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority. (On July 14, 1996, in connection with the merger of Chemical Bank
and The Chase Manhattan Bank (National Association), Chemical Bank, the
surviving corporation, was renamed The Chase Manhattan Bank).
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York, on the 4th day
of February, 1997.
THE CHASE MANHATTAN BANK
By /s/ VALERIE DUNBAR
----------------------------
Valerie Dunbar
Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,095
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,998
Securities:
Held to maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,231
Available for sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,078
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,018
Securities purchased under agreements to resell . . . . . . . . . . . . . . . . 731
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . $ 130,513
Less: Allowance for loan and lease losses . . . . . . . . 2,938
Less: Allocated transfer risk reserve . . . . . . . . . . 27
---------
Loans and leases, net of unearned income,
allowance, and reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,548
Trading Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,576
Premises and fixed assets (including capitalized
leases) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,850
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Investments in unconsolidated subsidiaries and
associated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Customer's liability to this bank on acceptances
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,777
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,361
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,204
-----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 261,859
===========
</TABLE>
-4-
<PAGE> 5
<TABLE>
<S> <C> <C>
LIABILITIES
Deposits
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,163
Noninterest-bearing . . . . . . . . . . . . . . . . . . . $ 30,596
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 49,567
---------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,173
Noninterest-bearing . . . . . . . . . . . . . . . . . . . $ 3,616
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 61,557
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,594
Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . . 14,110
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . 2,200
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,136
Other Borrowed money:
With a remaining maturity of one year or less . . . . . . . . . . . . . . . . . 16,895
With a remaining maturity of more than one year . . . . . . . . . . . . . . . . 449
Mortgage indebtedness and obligations under capitalized
leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . 2,764
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . . . 5,471
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,997
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,001
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Limited-Life Preferred stock and related surplus . . . . . . . . . . . . . . . . . . 550
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,209
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,176
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . 4,385
Net unrealized holding gains (Losses)
on available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . (481)
Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . . . 19
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,308
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TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 261,859
===========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER ) DIRECTORS
THOMAS G. LABRECQUE )
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