<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 25, 1994
REGISTRATION NO. 33-52853
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NORAM ENERGY CORP.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
72-0120530
(I.R.S. Employer Identification No.)
1600 SMITH STREET
11TH FLOOR
HOUSTON, TEXAS 77002
(713) 654-5100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
HUBERT GENTRY, JR.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
1600 SMITH STREET
11TH FLOOR
HOUSTON, TEXAS 77002
(713) 654-5100
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------
Copies to:
GERRY D. OSTERLAND, ESQ.
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-3939
ARNOLD H. TRACY, ESQ.
MUDGE ROSE GUTHRIE ALEXANDER & FERDON
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
(212) 510-7000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following: / /
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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EXPLANATORY NOTE
This Registration Statement contains a Preliminary Prospectus relating to a
public offering in the United States and Canada (the "U.S. Offering") of an
aggregate of 11,050,000 shares of Common Stock, par value $.625 per share (the
"Common Stock"), of the Registrant, together with separate prospectus pages
relating to a concurrent offering outside the United States and Canada (the
"International Offering") of an aggregate of 1,950,000 shares of Common Stock.
The completed Preliminary Prospectus for the U.S. Offering follows immediately
after this Explanatory Note. After such Preliminary Prospectus are the alternate
pages for the International Offering: a front cover page, an "Underwriting"
section and a back cover page. All other pages of the Preliminary Prospectus for
the U.S. Offering are to be used for both the U.S. Offering and the
International Offering.
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* *
* 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
PRELIMINARY PROSPECTUS DATED MAY 25, 1994
PROSPECTUS
13,000,000 SHARES
{NORAM LOGO}
COMMON STOCK
------------------------
Of the 13,000,000 shares of Common Stock, par value $.625 per share (the
"Common Stock"), of NorAm Energy Corp., formerly known as Arkla, Inc. (the
"Company"), offered hereby, 11,050,000 shares are being offered in the United
States and Canada by the U.S. Underwriters (the "U.S. Offering") and 1,950,000
shares are concurrently being offered for sale outside the United States and
Canada by the International Managers (the "International Offering"). Such
offerings are collectively referred to as the "Offerings." The public offering
price and the aggregate underwriting discount per share of the U.S. Offering and
the International Offering are identical and the closings of the U.S. Offering
and the International Offering are conditioned upon each other. See
"Underwriting."
The Company's Common Stock is listed on the New York Stock Exchange under
the symbol "NAE." On May 23, 1994, the last reported sale price of the Common
Stock on the New York Stock Exchange Composite Tape was $6. See "Price Range of
Common Stock and Dividends."
------------------------
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.
<TABLE>
<CAPTION>
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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNT(1) COMPANY(2)
PUBLIC
<S> <C> <C> <C>
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Per Share............................. $ $ $
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Total(3).............................. $ $ $
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</TABLE>
(1) The Company has agreed to indemnify the several U.S. Underwriters and the
several International Managers against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $200,000.
(3) The Company has granted the U.S. Underwriters and the International Managers
30 day options to purchase up to 1,657,500 and 292,500 additional shares of
Common Stock, respectively, solely to cover over-allotments, if any. If
such options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to the Company will be $ , $ and
$ , respectively. See "Underwriting."
------------------------
The shares of Common Stock are offered hereby by the several U.S.
Underwriters, subject to prior sale, when, as and if issued to and accepted by
them, subject to certain conditions. The U.S. Underwriters reserve the right to
withdraw, cancel or modify such offer and to reject orders in whole or in part.
It is expected that delivery of shares of Common Stock will be made in New York,
New York on or about , 1994.
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MERRILL LYNCH & CO.
CS FIRST BOSTON
KIDDER, PEABODY & CO.
INCORPORATED
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The date of this Prospectus is June , 1994.
<PAGE> 4
IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. 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, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission, at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Company's Common Stock is listed on, and
reports, proxy statements and other information concerning the Company can be
inspected at the offices of, the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3, of which this Prospectus is a part, and
exhibits relating thereto which the Company has filed with the Commission under
the Securities Act of 1933, as amended (the "Act"). Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Common Stock. Statements
contained herein concerning the provisions of documents are necessarily
summaries of such documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 (the "Form 10-K") and its
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994 (the "Form
10-Q"), which have been filed previously with the Commission under File No.
1-3751.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus. The documents incorporated herein
by reference are sometimes hereinafter called the "Incorporated Documents." Any
statement contained herein or in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The information relating to the Company contained in this Prospectus does
not purport to be comprehensive and is based upon information contained in the
Incorporated Documents. Accordingly, the information contained herein should be
read together with the information contained in the Incorporated Documents.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any and all of the Incorporated Documents, other than the
exhibits to such documents (unless such exhibits are specifically incorporated
by reference in such documents). Requests should be directed to the Office of
the Secretary, NorAm Energy Corp., 1600 Smith Street, 11th Floor, Houston, Texas
77002, telephone number (713) 654-5100.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements included elsewhere in this Prospectus and
in the Incorporated Documents. Unless otherwise indicated, the information in
this Prospectus assumes that the U.S. Underwriters and the International
Managers do not exercise their over-allotment option. See "Underwriting." As
used herein, the term "Company" refers to NorAm Energy Corp. together with its
subsidiaries.
THE COMPANY
The Company is principally engaged in the distribution and transmission of
natural gas including gathering, storage and marketing. To reflect the natural
division of the Company's operations, the Company is organized into two
operating units, natural gas distribution and natural gas pipeline.
The Company operates its gas distribution business through its Arkansas
Louisiana Gas division ("ALG"), its Entex division ("Entex") and its Minnegasco
division ("Minnegasco"). ALG, Entex and Minnegasco provide service in seven
states to more than 1,300 communities and adjacent rural areas, serving
approximately 2.7 million customers. The largest cities served are the
metropolitan areas of Houston, Texas; Minneapolis, Minnesota; Little Rock,
Arkansas and Shreveport, Louisiana.
The gas transmission operations of the Company are conducted by NorAm Gas
Transmission Company ("NGT"), formerly known as Arkla Energy Resources Company
("AER Co."), Mississippi River Transmission Corporation ("MRT"), and NorAm
Energy Services, Inc. ("NES"), formerly known as Arkla Energy Marketing Company
("AEM"). NGT operates an interstate natural gas pipeline system located in
Arkansas, Louisiana, Mississippi, Missouri, Kansas, Oklahoma, Tennessee and
Texas consisting of approximately 3,500 miles of gathering lines and
approximately 6,600 miles of transmission lines. MRT operates an approximate
2,200 mile interstate natural gas pipeline system serving principally the
greater St. Louis area in Missouri and Illinois. NES serves as the Company's
principal natural gas supply aggregator and marketer.
The Company previously conducted operations in the intrastate pipeline
business and in the exploration and production business. On June 30, 1993, and
December 31, 1992, respectively, the Company completed the sale of its
intrastate transmission subsidiary, Louisiana Intrastate Gas Corporation ("LIG")
and its exploration and production subsidiary, Arkla Exploration Company
("AEC").
On May 10, 1994, the stockholders of the Company approved an amendment to
the Company's Restated Certificate of Incorporation to change the Company name
from Arkla, Inc. to NorAm Energy Corp. The purpose of the name change is to more
accurately describe the geographical area served by the Company.
The Company's principal executive offices are located at 1600 Smith Street,
11th Floor, Houston, Texas 77002, telephone number (713) 654-5100.
THE OFFERINGS
<TABLE>
<S> <C>
Common Stock offered:
U.S. Offering................................................ 11,050,000 shares
International Offering....................................... 1,950,000 shares
Total..................................................... 13,000,000 shares
Common Stock to be outstanding after the Offerings............. 135,409,129 shares
Use of proceeds by the Company................................. The net proceeds of
approximately $ from
the sale of the shares of
Common Stock will be used to
reduce the Company's
outstanding indebtedness as
described under "Use of
Proceeds."
New York Stock Exchange symbol................................. NAE
</TABLE>
3
<PAGE> 6
Page 4 of the Prospectus will contain a map of the Company's distribution
system and a map of its pipeline system. The distribution map displays each of
the seven states in which the Company has distribution operations. A gas flame
symbol is used to indicate a concentration of customers and the general location
of the concentration. The largest number of symbols appear on the areas
attributable to Houston, Texas, Minneapolis, Minnesota, Little Rock, Arkansas
and Shreveport, Louisiana.
The pipeline map displays the Company's interstate pipeline system located
in Arkansas, Louisiana, Mississippi, Missouri, Kansas, Oklahoma and Illinois.
Additional unaffiliated third party pipelines are also displayed. Generally,
these third party pipelines are "long-line" pipelines that provide the Company
with access to the markets in the Northeast.
[INSERT SYSTEM MAP]
4
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA
The following summary consolidated financial data concerning the Company
for each of the five years in the period ended December 31, 1993 and for the
three-month periods ended March 31, 1993 and 1994 should be read in conjunction
with the financial statements and the notes thereto incorporated by reference in
this Prospectus. Historical financial information as of and for the three-month
periods ended March 31, 1993 and 1994 is unaudited. Results for the three-month
period ended March 31, 1994 are not necessarily indicative of results for the
full year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
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1994 1993 1993 1992 1991 1990(1) 1989(1)
-------- -------- -------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT AS NOTED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues
Natural Gas Sales..................... $1,036.4 $ 944.4 $2,759.7 $2,518.0 $2,495.6 $2,106.0 $2,045.8
Gas Transportation.................... 42.3 39.8 108.4 119.5 139.9 138.3 102.7
Other................................. 13.6 26.9 81.5 106.3 88.9 105.7 74.3
-------- -------- -------- -------- -------- -------- --------
Total........................... 1,092.3 1,011.1 2,949.6 2,743.8 2,724.4 2,350.0 2,222.8
-------- -------- -------- -------- -------- -------- --------
Operating Expenses
Cost of Natural Gas Purchased, Net.... 747.1 666.7 1,900.9 1,758.4 1,730.4 1,439.0 1,379.9
Operation, Maintenance, Cost of Sales
and Other........................... 130.3 137.8 552.0 545.3 525.6 434.6 451.3
Depreciation and Amortization......... 37.7 38.3 151.0 150.7 145.7 107.0 95.8
Taxes Other Than Income Taxes......... 31.1 28.7 104.5 100.8 98.8 78.4 76.1
Contract Termination Charge........... -- -- 34.2 -- -- -- --
Regulatory Settlement................. -- -- -- -- 15.0 -- --
Special Charge........................ -- -- -- -- -- -- 269.0
-------- -------- -------- -------- -------- -------- --------
Total........................... 946.2 871.5 2,742.6 2,555.2 2,515.5 2,059.0 2,272.1
-------- -------- -------- -------- -------- -------- --------
Operating Income (Loss)................. 146.1 139.6 207.0 188.6 208.9 291.0 (49.3)
Interest Expense, Net................... 42.4 45.5 172.4 185.2 169.8 142.3 130.4
Income (Loss) From Continuing
Operations............................ 55.5 76.7(2) 39.9 6.2 16.5 100.8 (31.6)
Net Income (Loss)....................... $ 55.5 $ 73.3(2) $ 36.1 $ (228.5) $ (54.8) $ 99.7 $ (47.3)
Preferred Dividend Requirement.......... 2.0 2.0 7.8 7.8 7.8 7.8 7.8
Average Common Shares Outstanding....... 122.4 122.3 122.3 121.8 116.0 89.3 85.7
Income (Loss) From Continuing Operations
per Common Share...................... $ 0.44 $ 0.61(2) $ 0.26 $ (0.01) $ 0.08 $ 1.04 $ (0.46)
Earnings per Common Share............... 0.44 0.58(2) 0.23 (1.94) (0.54) 1.03 (0.64)
Dividends per Common Share.............. 0.07 0.07 0.28 0.48 1.08 1.08 1.08
BALANCE SHEET DATA:
Net Property, Plant and Equipment....... $2,268.1 $2,338.1 $2,357.1 $2,523.9 $2,668.1 $2,547.9 $1,928.0
Total Assets............................ 3,663.2 3,921.1 3,727.8 4,059.0 4,806.9 4,785.6 3,457.0
Short-term Debt, Including Current
Maturities............................ 97.4 122.0 192.4 120.0 772.6 712.4 602.3
Long-term Debt.......................... 1,622.6 1,698.9 1,629.4 1,783.1 1,551.5 1,450.2 1,162.3
Total Stockholders' Equity.............. 753.1 775.7 708.0 712.9 948.0 1,115.4 546.1
</TABLE>
(Table continued on following page)
5
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<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
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1994 1993 1993 1992 1991(1) 1990(1) 1989(1)
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<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Natural Gas Distribution (Billions of
cubic feet)
Residential Sales..................... 89.8 86.1 193.6 185.7 187.1 123.2 129.7
Commercial Sales...................... 50.4 51.2 126.7 123.9 124.2 77.2 75.8
Industrial Sales...................... 33.0 26.8 111.7 99.5 77.9 57.8 61.8
Sales for Resale...................... 4.1 2.5 10.2 3.6 12.8 13.5 --
-------- -------- -------- -------- -------- -------- --------
Total Sales..................... 177.3 166.6 442.2 412.7 402.0 271.7 267.3
Transportation........................ 19.1 22.6 75.8 79.0 72.1 57.2 53.4
-------- -------- -------- -------- -------- -------- --------
Total Throughput................ 196.4 189.2 518.0 491.7 474.1 328.9 320.7
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Average Number of Customers (000's)... 2,709.2 2,681.6 2,648.5 2,709.9 2,675.5 2,638.8 1,975.6
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Natural Gas Pipeline(3) (Millions of
MMBtu)
Sales to Distribution................. 25.2 41.4 71.2 73.5 91.9 77.2 68.5
Sales for Resale...................... 32.9 34.4 103.6 76.5 137.2 158.1 223.1
-------- -------- -------- -------- -------- -------- --------
Total Sales..................... 58.1 75.8 174.8 150.0 229.1 235.3 291.6
Transportation........................ 272.6 187.7 780.1 752.5 629.8 513.4 342.1
Less: Order 636 Elimination(4)........ (18.7) -- (24.2) -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total Throughput................ 312.0 263.5 930.7 902.5 858.9 748.7 633.7
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
</TABLE>
- ---------------
(1) In conjunction with the Company's December 31, 1992 sale of AEC, all prior
year financial statements were restated to reflect AEC's transactions and
balances as discontinued operations. Accordingly, certain amounts differ
from those previously reported in the Company's Annual Reports on Form 10-K
for fiscal years prior to 1992.
(2) Includes a $26.8 million pre-tax gain ($17.2 million after-tax or
$0.14/share) from the sale of the Company's Nebraska distribution
properties.
(3) Excludes LIG for all periods presented.
(4) Prior to the implementation of unbundled services pursuant to FERC Order 636
(in September and November 1993 for NGT and MRT, respectively), the sales
rate for Natural Gas Pipeline ("Pipeline") covered all related services,
including transportation to the customer's facility. After Order 636
implementation, when Pipeline acts as a merchant, the sales transaction is
independent of (and may not include) the transportation of the volume sold.
Therefore, when the sold volumes are also transported by Pipeline, the
throughput statistics will include the same physical volumes in both the
sales and transportation categories, requiring an elimination to prevent the
overstatement of actual total physical throughput.
6
<PAGE> 9
THE COMPANY
BACKGROUND AND STRATEGY
The Company is principally engaged in the distribution and transmission of
natural gas including gathering, storage and marketing of natural gas. On May
10, 1994, the stockholders of the Company approved an amendment to the Company's
Restated Certificate of Incorporation to change the Company name from Arkla,
Inc. to NorAm Energy Corp. The purpose of the name change is to more accurately
describe the geographical area served by the Company.
In 1992, the Company initiated a strategic action plan designed to narrow
the focus of its operations and increase long-term stockholder value. In this
regard, the Company has (1) significantly reduced its ongoing costs through
staff reductions and other cost control measures, (2) sold its exploration and
production operations which were conducted by AEC, (3) sold its intrastate
pipeline business as conducted by LIG and subsidiaries, (4) completed or is in
the process of completing the sale and exchange of several of its distribution
properties, and (5) disposed of certain other non-core businesses.
Further, the Company has set several objectives to improve future
profitability. These objectives include (1) increasing the profitability of its
natural gas pipeline operations through improved rate design, aggressive
marketing of its services and continued reduction of its overall costs, (2)
maintaining the profitability of its natural gas distribution operations through
timely and well designed rate filings, increasing its customer base through
aggressive marketing and controlling costs in order to remain competitive and
offset regulatory lag, (3) developing and expanding the Company's unregulated
natural gas marketing business through the acquisition of new markets and the
provision of services at a unit cost which will allow it to compete effectively
with industry leaders, and (4) reducing the Company's overall leverage and
related interest expense, thus increasing the Company's flexibility to pursue
future opportunities for attractive investment. The Company believes that the
proposed Offerings are an important element in its plan to achieve these
objectives.
NATURAL GAS DISTRIBUTION
The Company's natural gas distribution business is conducted through three
divisions, ALG, Entex and Minnegasco, and their affiliates. Through these
divisions and their affiliates, the Company engages in both the natural gas
sales and transportation businesses. In the aggregate, the Company owns and
operates approximately 53,500 miles of gas distribution mains which range in
size from one-half inch to 24 inches in diameter. The Company currently provides
gas distribution services to approximately 2.7 million customers in 1,330
communities. The following table summarizes the location, the number of
communities and the number of customers served by the Company as of December 31,
1993.
<TABLE>
<CAPTION>
NUMBER OF
SERVICE AREA LOCATIONS COMMUNITIES CUSTOMERS
--------------------------------------------------- ----------- ---------
<S> <C> <C>
Texas.............................................. 365 1,160,947
Minnesota.......................................... 204 599,067
Arkansas........................................... 383 422,187
Louisiana.......................................... 179 261,456
Oklahoma........................................... 94 115,523
Mississippi........................................ 91 115,841
Kansas............................................. 14 23,001
----- ---------
Total.................................... 1,330 2,698,022
----- ---------
----- ---------
</TABLE>
ALG. ALG provides distribution service in approximately 624 communities in
the states of Arkansas, Louisiana, Oklahoma, Texas and Kansas. The largest
communities served through ALG are the metropolitan areas of Little Rock,
Arkansas, and Shreveport, Louisiana. During 1993, approximately 71% of ALG's
total throughput was composed of retail gas sales and approximately 29% was
attributable to transportation services. In May of 1993, ALG, NGT and UtiliCorp
United Inc. ("UtiliCorp", an affiliate of Peoples Natural Gas
7
<PAGE> 10
Company) entered into a definitive agreement pursuant to which the Company
expects to sell to UtiliCorp, subject to Federal Energy Regulatory Commission
("FERC") approval, the Kansas distribution properties of ALG together with
certain related pipeline assets of NGT. Upon completion, this sale will
terminate substantially all of the Company's distribution and transmission
operations in Kansas.
ENTEX. Entex provides distribution service in approximately 502
communities in the states of Texas, Louisiana and Mississippi. The largest
community served by Entex is the metropolitan area of Houston, Texas. During
1993, approximately 87% of Entex's total throughput was composed of retail gas
sales and approximately 13% was attributable to transportation services.
MINNEGASCO. Minnegasco provided distribution service in approximately 285
communities in the states of Minnesota, Nebraska and South Dakota during 1993.
The largest communities served by Minnegasco in 1993 included Minneapolis,
Minnesota and its suburbs; Lincoln, Nebraska; and Sioux Falls, South Dakota. In
February 1993, Minnegasco completed the sale of its Nebraska distribution system
to UtiliCorp for $75.3 million in cash. In August of 1993, Minnegasco acquired
the Minnesota distribution properties of Midwest Gas, a division of Midwest
Power System, Inc. ("Midwest"), in exchange for all of the Company's
distribution properties located in South Dakota and $38 million in cash. The
UtiliCorp and Midwest transactions terminated Minnegasco's distribution
operations outside Minnesota. During 1993, approximately 95% of Minnegasco's
total throughput was composed of retail gas sales and approximately 5% was
attributable to transportation services.
NATURAL GAS PIPELINE
In March 1993, the Company transferred assets, liabilities and service
obligations of Arkla Energy Resources, a division of the Company, into a
newly-formed wholly-owned subsidiary of the Company, AER Co., now NGT, pursuant
to FERC approval. As a result, the Company's transmission activities are now
conducted by NGT, an interstate pipeline subsidiary of the Company, MRT, an
interstate pipeline subsidiary of the Company and NES, formerly known as AEM, a
subsidiary which serves as the Company's principal natural gas supply aggregator
and marketer, and affiliate companies associated with each. Through these
subsidiaries, the Company engages in both the transportation and sale of natural
gas, including gathering, storage and marketing.
NGT. NGT owns and operates an interstate natural gas pipeline system
located in portions of Arkansas, Louisiana, Mississippi, Missouri, Kansas,
Oklahoma, Tennessee and Texas. In May of 1993, NGT entered into a definitive
agreement pursuant to which it expects to sell to UtiliCorp its pipeline assets
in Kansas, including the Winfield, Kansas storage field described below, subject
to FERC approval. At December 31, 1993, the NGT system consisted of
approximately 6,600 miles of transmission lines and approximately 3,500 miles of
gathering lines. The NGT pipeline system extends generally in an easterly
direction from the Anadarko Basin area of the Texas Panhandle and western
Oklahoma through the Arkoma Basin area of eastern Oklahoma and Arkansas to the
Mississippi River. The system also extends from east Texas to north Louisiana
and central Arkansas, and from the mainline system in Oklahoma and Arkansas to
south central Kansas and southwest Missouri. The system has extensive gas
gathering facilities throughout the Anadarko and Arkoma Basins, and in east
Texas and north Louisiana and also operates various product extraction plants
and compressor facilities related to its gas transmission business. NGT's peak
day gas handled during the 1993-1994 heating season was approximately 2.4
billion cubic feet ("Bcf"). The system transports gas for third parties as an
"open access" transporter, makes sales of gas directly to end users located
along its system and delivers gas to the Company's distribution divisions for
retail sales. During 1993, NGT's total throughput consisted of 91%
transportation service and 9% sales service. Approximately 21% of total
throughput was attributable to services provided to ALG, 10% was attributable to
services provided to MRT and 27% was attributable to gas marketed by NES to
other parties. No other customer or supplier accounted for more than 10% of
NGT's throughput.
Four storage fields are associated with NGT's pipeline and have a combined
maximum deliverability of approximately 600 million cubic feet ("MMcf ") per day
and a working gas capacity of approximately 20.3 Bcf. NGT also owns a 10%
interest in Koch Gateway Pipeline Company's Bistineau storage field which
8
<PAGE> 11
provides an additional 100 MMcf per day of deliverability and additional working
gas capacity of approximately 8 Bcf. The two largest NGT storage fields are
located in Oklahoma: the Ada field -- capable of delivering approximately 330
MMcf per day, and the Chiles Dome field -- capable of delivering approximately
200 MMcf per day. The other two NGT storage fields are located near Ruston,
Louisiana and Winfield, Kansas.
In October 1993, the Company made a filing with FERC which, if approved,
would allow the Company to transfer the natural gas gathering assets of NGT into
a wholly-owned subsidiary to be called NorAm Gathering Services Company ("NorAm
Gathering"). NorAm Gathering, if authorized by FERC, will own and operate
approximately 3,500 miles of gathering pipelines which collect gas from more
than 200 separate systems in major producing fields in Arkansas, Oklahoma,
Louisiana and Texas. While the scope of FERC's jurisdiction over NorAm Gathering
is unclear, the Company believes that it would not generally be subject to
traditional cost-of-service rate regulation.
MRT. The MRT system consists of approximately 2,200 miles of pipeline
serving principally the greater St. Louis area in Missouri and Illinois. This
pipeline system includes the "Main Line System," the "East Line," and the "West
Line." The Main Line System includes three transmission lines extending
approximately 435 miles from Perryville, Louisiana, to the greater St. Louis
area. The East Line, also a main transmission line, extends approximately 94
miles from southwestern Illinois to St. Louis. The West Line extends
approximately 140 miles from east Texas to Perryville, Louisiana. The system
also includes various other branch, lateral, transmission and gathering lines
and compressor stations. During 1993, MRT's throughput totaled 317.6 Bcf which
consisted of 81% transportation service and 19% sales service. Approximately
half of MRT's total 1993 volumes were delivered to its traditional markets along
the system in Missouri, Illinois and Arkansas with the remaining volumes
delivered to off-system customers. MRT's peak day delivery during the 1993-1994
heating season was approximately 950,000 million British Thermal Units, which
was comprised entirely of transportation volumes. MRT's largest customer is
Laclede Gas Company, which serves metropolitan St. Louis and to which MRT
provides service under several long-term firm transportation and storage
agreements and an agency agreement. Three storage fields are associated with
MRT's pipeline and have a combined maximum aggregate deliverability of
approximately 750 MMcf per day and a working gas capacity of approximately 31
Bcf. The substantial portion of such capacity is located in two fields in north
central Louisiana, near Ruston. The other MRT storage field is located at St.
Jacob, Illinois.
NES. NES markets gas on both a short-term (spot) and long-term basis.
Sales prices may be market based or fixed. Fixed priced sales or purchases are
hedged using gas futures contracts or other derivative hedging tools. NES gas
supplies are purchased from third parties on both a short-term and long-term
basis, with most gas supplies purchased at market sensitive prices. Gas sales
for 1993 totaled 245 Bcf, of which approximately 72% was sold to unaffiliated
parties. Customers are located both in areas served by NGT and other pipelines.
Gas is transported to customers using both firm and interruptible
transportation.
LITIGATION
On October 15, 1992, the Resolution Trust Corporation filed a suit against
the Company, as a successor-in-interest to Entex, Inc., alleging harm resulting
from the failure of University Savings Association, a thrift institution in
Houston, Texas. For a discussion of this litigation, see Item 3 of the Form
10-K, and Part II, Item 1 of the Form 10-Q.
9
<PAGE> 12
USE OF PROCEEDS
The net proceeds of approximately $ (after underwriting discount and
offering expenses) from the sale of the shares of Common Stock offered hereby
will be used to retire a portion of the Company's long-term debt.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at March 31, 1994, and as adjusted to give effect to the sale of the
Common Stock offered hereby and the application of the net proceeds therefrom as
described in "Use of Proceeds."
<TABLE>
<CAPTION>
MARCH 31, 1994
----------------------
AS
ACTUAL ADJUSTED(1)
-------- --------
(IN MILLIONS)
<S> <C> <C>
Short-term Debt:
Notes Payable..................................................... $ -- $ --
Long-term Debt Due Within One Year................................ 97.4 97.4
-------- --------
Total Short-term Debt..................................... $ 97.4 $ 97.4
-------- --------
-------- --------
Long-term Debt ..................................................... $1,622.6 $1,553.5
-------- --------
Stockholders' Equity:
Preferred Stock................................................... 130.0 130.0
Common Stock...................................................... 76.5 84.6
Paid-in Capital................................................... 867.7 933.5
Accumulated Deficit............................................... (321.1) (324.0)
-------- --------
Total Stockholders' Equity................................ 753.1 824.1
-------- --------
Total Capitalization...................................... $2,375.7 $2,377.6
-------- --------
-------- --------
</TABLE>
- ---------------
(1) Reflects the proceeds from the sale of 13,000,000 shares of Common Stock at
an assumed market price of $6, less an underwriting discount of 5% and
reduced by expenses incurred in connection with the sale estimated to total
approximately $0.2 million. The net proceeds from the sale of the shares of
Common Stock will be used to retire $69.1 million of long-term debt (with
an estimated weighted average interest rate of 10%) outstanding at March
31, 1994, and fund the premium of $4.8 million (estimated at 7%) on the
retirement of the debt securities prior to their maturity.
10
<PAGE> 13
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is listed on the New York Stock Exchange under
the symbol "NAE". The following table sets forth for the periods indicated the
high and low sales prices on the New York Stock Exchange Composite Tape and the
amount of cash dividends paid per share of Common Stock.
<TABLE>
<CAPTION>
HIGH LOW DIVIDEND
---- --- --------
<S> <C> <C> <C>
1992
First Quarter.............................................. $12 3/8 $9 $ 0.27
Second Quarter............................................. 9 3/4 6 7/8 0.07
Third Quarter.............................................. 11 1/2 9 0.07
Fourth Quarter............................................. 10 3/4 7 1/2 0.07
1993
First Quarter.............................................. 9 7 3/8 0.07
Second Quarter............................................. 10 5/8 8 3/4 0.07
Third Quarter.............................................. 10 1/8 8 1/8 0.07
Fourth Quarter............................................. 8 7/8 7 3/8 0.07
1994
First Quarter.............................................. 9 6 3/4 0.07
Second Quarter (through May 23, 1994)...................... 6 7/8 5 5/8 0.07
</TABLE>
On May 23, 1994, the last reported sales price of the Common Stock on the
New York Stock Exchange Composite Tape was $6 per share.
The most recent quarterly dividend of $0.07 per share was declared by the
Board of Directors on May 10, 1994, and will be paid on June 15, 1994, to
stockholders of record on May 23, 1994. The payment of dividends in the future
and the amount of such payments, if any, will depend upon the Company's earnings
and such other factors as the Board of Directors deems relevant.
Under the provisions of the Company's revolving credit facility, the
Company's total debt capacity is limited and it is required to maintain a
minimum level of stockholders' equity, which requirements may limit the
Company's ability to pay dividends. See Note 14 of the Notes to Consolidated
Financial Statements incorporated by reference into Item 8 of the Form 10-K and
the Liquidity and Capital Resources section of the Form 10-Q.
11
<PAGE> 14
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS OF COMMON STOCK
GENERAL
The following is a general discussion of certain United States federal
income and estate tax consequences of the acquisition, ownership and disposition
of Common Stock by a holder who is not a United States person (a "Non-U.S.
Holder"). For this purpose, the term "Non-U.S. Holder" means any corporation,
individual or partnership that is, as to the United States, a foreign
corporation, a non-resident alien individual or a foreign partnership, or an
estate or trust other than one the income of which is subject to United States
federal income tax. This discussion does not address all aspects of United
States federal income and estate taxes and does not deal with foreign, state and
local consequences that may be relevant to Non-U.S. Holders in light of their
specific circumstances. Furthermore, this discussion is based on provisions of
the United States Internal Revenue Code of 1986, as amended, existing and
proposed regulations promulgated thereunder and administrative and judicial
interpretations thereof as of the date hereof, all of which are subject to
change. EACH PROSPECTIVE PURCHASER OF COMMON STOCK IS URGED TO CONSULT A TAX
ADVISOR WITH RESPECT TO CURRENT AND POSSIBLE FUTURE UNITED STATES FEDERAL,
STATE, LOCAL AND NON-UNITED STATES INCOME AND OTHER TAX CONSEQUENCES OF
ACQUIRING, HOLDING AND DISPOSING OF COMMON STOCK.
DIVIDENDS
In the event that dividends are paid on shares of the Common Stock, such
dividends paid to a Non-U.S. Holder of Common Stock will be subject to
withholding of United States federal income tax at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty, unless the dividends are
effectively connected with the conduct of a trade or business of the Non-U.S.
Holder within the United States. Dividends that are effectively connected with
the conduct of a trade or business within the United States are subject to
United States federal income tax on a net income basis at applicable graduated
individual or corporate rates. Any such effectively connected dividends received
by a foreign corporation may, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.
Under current United States Treasury regulations, dividends paid to an
address outside the United States are presumed to be paid to a resident of such
country for purposes of the withholding discussed above and, under the current
interpretation of United States Treasury regulations, for purposes of
determining the applicability of a tax treaty rate. However, under proposed
United States Treasury regulations not currently in effect, a Non-U.S. Holder of
Common Stock who wishes to claim the benefit of an applicable treaty rate would
be required to satisfy applicable certification and other requirements. Certain
certification and disclosure requirements must be complied with in order to be
exempt from withholding under the effectively connected income exemption.
A Non-U.S. Holder of Common Stock eligible for a reduced rate of United
States withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
Internal Revenue Service (the "IRS").
GAIN ON DISPOSITION OF COMMON STOCK
A Non-U.S. Holder will generally not be subject to United States federal
income tax with respect to a gain recognized on a sale or other disposition of
Common Stock unless (i) the gain is effectively connected with a trade or
business carried on by the Non-U.S. Holder within the United States or is
attributable to an office or other fixed place of business maintained by the
Non-U.S. Holder within the United States, (ii) in the case of a Non-U.S. Holder
who is an individual and holds the Common Stock as a capital asset, such holder
is present in the United States for 183 or more days in the taxable year of the
sale or other disposition and certain other conditions are met, (iii) the
Non-U.S. Holder is subject to tax pursuant to the provisions of the United
States federal tax law applicable to certain United States expatriates, or (iv)
the Company is or has been a "U.S. real property holding corporation" for United
States federal income tax purposes and either the
12
<PAGE> 15
Non-U.S. Holder held, directly or indirectly, at any time during the five-year
period ending on the date of disposition, more than 5 percent of the Common
Stock or the Common Stock is not regularly traded on an established securities
market. The Company believes that it is at present, and is likely to remain, a
"U.S. real property holding corporation" for United States federal income tax
purposes.
FEDERAL ESTATE TAX
Common Stock owned or treated as owned by an individual Non-U.S. Holder at
the time of death will be included in such holder's gross estate for United
States federal estate tax purposes and may be subject to United States estate
tax, unless an applicable estate tax treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
Under current United States Treasury regulations, the Company must report
annually to the IRS and to each Non-U.S. Holder the amount of dividends paid to
such holder and the tax withheld with respect to such dividends. These
information reporting requirements apply even if withholding was not required
because the dividends were effectively connected with a trade or business in the
United States of the Non-U.S. Holder or withholding was reduced or eliminated by
an applicable income tax treaty. Copies of the information returns reporting
such dividends and withholding may also be made available to the tax authorities
in the country in which the Non-U.S. Holder resides under the provisions of an
applicable income tax treaty.
United States information reporting and backup withholding (which generally
is a withholding tax imposed at the rate of 31% on certain payments to persons
that fail to furnish certain information under the United States information
reporting requirements) will generally not apply to dividends paid to Non-U.S.
Holders outside the United States that are either subject to the 30% withholding
discussed above or that are not so subject because a tax treaty applies that
reduces or eliminates such 30% withholding. In that regard, under temporary
United States Treasury regulations, backup withholding will not apply to
dividends paid on Common Stock to a Non-U.S. Holder at an address outside the
United States unless the payer has knowledge that the payee is a United States
person. Backup withholding and information reporting generally will apply to
dividends paid to addresses inside the United States on shares of Common Stock
to beneficial owners that are not "exempt recipients" and that fail to provide
certain identifying information in the manner required.
In general, backup withholding and information reporting will not apply to
a payment of the proceeds of a sale of Common Stock by or through a foreign
office of a broker. If, however, such broker is, for United States federal
income tax purposes a United States person, a controlled foreign corporation, or
a foreign person that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States, such
payments will not be subject to backup withholding but will be subject to
information reporting, unless (1) such broker has documentary evidence in its
records that the beneficial owner is a Non-U.S. Holder and certain other
conditions are met, or (2) the beneficial owner otherwise establishes an
exemption. Temporary United States Treasury regulations provide that the United
States Treasury Department is considering whether backup withholding will apply
with respect to such payments that are not currently subject to backup
withholding under the current regulations. Under proposed United States Treasury
regulations not currently in effect, backup withholding will not apply to such
payments absent actual knowledge that the payee is a United States person.
Payment by a United States office of a broker of the proceeds of a sale of
Common Stock is subject to both backup withholding and information reporting
unless the beneficial owner certifies under penalties of perjury that it is a
Non-U.S. Holder or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's United States federal income tax
liability provided the required information is furnished to the IRS.
The backup withholding and information reporting rules are currently under
review by the United States Treasury Department and their application to shares
of Common Stock is subject to change.
13
<PAGE> 16
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of (i) 150,000,000
shares of Common Stock, and (ii) 10,000,000 shares of Preferred Stock, $.10 par
value ("Preferred Stock"), of which 122,409,129 shares of Common Stock and
2,600,000 shares of $3.00 Convertible Exchangeable Preferred Stock, Series A
("Series A Preferred"), were issued and outstanding at May 23, 1994. The
following summary description of these securities is qualified in its entirety
by reference to the Restated Certificate of Incorporation of the Company which
is filed as an exhibit to the Registration Statement of which this Prospectus is
a part.
COMMON STOCK
Holders of the Common Stock are entitled to one vote for each share held of
record. The Company's Restated Certificate of Incorporation provides for
cumulative voting in the election of directors. Subject to the preferential
rights of the holders of Preferred Stock, the holders of Common Stock are
entitled to receive any dividends which may be declared by the Company's Board
of Directors out of funds legally available therefor and to share pro rata in
the net assets of the Company upon liquidation. Holders of Common Stock have no
preemptive rights and have no rights to convert their Common Stock into any
other securities and there are no redemption provisions with respect to such
shares. All outstanding shares of Common Stock are fully paid and not subject to
further calls or assessments.
PREFERRED STOCK
Holders of Preferred Stock are entitled to such dividends, liquidation
preferences, redemption rights, voting rights, conversion and exchange
privileges, and other rights and preferences as the Board of Directors of the
Company may determine in each resolution authorizing a series of Preferred
Stock. The Preferred Stock ranks prior to the Common Stock with respect to both
dividends and distribution of assets on liquidation, dissolution or winding up.
At the date hereof, the only shares of Preferred Stock issued and outstanding
are the shares of Series A Preferred which have a liquidation value of $50 per
share, are entitled to cumulative quarterly dividends when and as declared by
the Company's Board of Directors at an annual rate of $3.00 per share and are
convertible at the option of the holder at any time into shares of Common Stock
at a conversion price of $28 5/8 per share of Common Stock, subject to certain
adjustments. The holders of Series A Preferred do not have voting rights.
However, in the event that the Company fails to pay dividends on shares of
Series A Preferred for six consecutive quarters, the holders thereof have the
right to elect two directors to the Company's Board. Holders of Series A
Preferred have no preemptive rights.
14
<PAGE> 17
UNDERWRITING
Subject to the terms and conditions set forth in the U.S. Purchase
Agreement (the "U.S. Purchase Agreement") among the Company and each of the
underwriters named below (the "U.S. Underwriters"), the Company has agreed to
sell to each of the U.S. Underwriters, and each of the U.S. Underwriters for
whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston
Corporation and Kidder, Peabody & Co. Incorporated are acting as representatives
(the "U.S. Representatives"), has severally agreed to purchase from the Company
the number of shares of Common Stock set forth below opposite their respective
names. Under certain circumstances, the commitments of non-defaulting U.S.
Underwriters may be increased as set forth in the U.S. Purchase Agreement.
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................
CS First Boston Corporation......................................
Kidder, Peabody & Co. Incorporated...............................
----------
Total............................................ 11,050,000
----------
----------
</TABLE>
The Company has also entered into an International Purchase Agreement (the
"International Purchase Agreement") with certain underwriters outside the United
States and Canada (the "International Managers"), for whom Merrill Lynch
International Limited, CS First Boston Limited, Kidder, Peabody International
Limited and UBS Limited are acting as representatives (the "Lead Managers").
Subject to the terms and conditions set forth in the International Purchase
Agreement, and concurrently with the sale of 11,050,000 shares of Common Stock
to the U.S. Underwriters, the Company has agreed to sell to the International
Managers, and the International Managers have severally agreed to purchase from
the Company, an aggregate of 1,950,000 shares of Common Stock. Under certain
circumstances as set forth in the International Purchase Agreement, the
commitments of non-defaulting International Managers may be increased. The
initial public offering price per share and the total underwriting discount per
share are identical under the U.S. Purchase Agreement and the International
Purchase Agreement.
In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers
(collectively, the "Underwriters"), respectively, have agreed, subject to the
terms and conditions set forth therein, to purchase all of the shares of Common
Stock being sold pursuant to each such Purchase Agreement if any of such shares
of Common Stock being sold pursuant to each such Purchase Agreement are
purchased. The closing with respect to the sale of the shares of Common Stock
sold pursuant to each Purchase Agreement is a condition to the closing with
respect to the sale of the Common Stock pursuant to the other Purchase
Agreement.
15
<PAGE> 18
The U.S. Underwriters and the International Managers have entered into an
Intersyndicate Agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Under the terms of the Intersyndicate
Agreement, the Underwriters are permitted to sell shares of Common Stock to each
other for purposes of resale.
The U.S. Representatives have advised the Company that the U.S.
Underwriters propose to offer the shares of Common Stock to the public initially
at the public offering price set forth on the cover page of this Prospectus, and
to certain selected dealers at such price less a concession not in excess of
$ per share. The U.S. Underwriters may allow, and such dealers may
re-allow, a discount not in excess of $ per share on sales to certain
other dealers. After the initial public offering, the public offering price,
concession, reallowance and discount may be changed.
The Company has granted the U.S. Underwriters an option, exercisable by the
U.S. Representatives, to purchase up to 1,657,500 additional shares of Common
Stock at the public offering price, less the underwriting discount. In addition,
the Company has granted the International Managers an option, exercisable by the
Lead Managers, to purchase up to 292,500 additional shares of Common Stock at
the initial public offering price, less the underwriting discount. Such options,
which expire 30 days after the date of this Prospectus, may be exercised solely
to cover over-allotments. To the extent that the U.S. Representatives and the
Lead Managers exercise such options, each of the U.S. Underwriters and the
International Managers, as the case may be, will be obligated, subject to
certain conditions, to purchase approximately the same percentage of the option
shares that the number of shares of Common Stock to be purchased initially by
that Underwriter bears to the total number of shares of Common Stock to be
purchased initially by the U.S. Underwriters or the International Managers,
respectively.
The Company has agreed that, for a period of 120 days from the date of this
Prospectus, they will not offer, sell, grant any option for sale of, or
otherwise dispose of any shares of Common Stock or securities convertible into
or exchangeable or exercisable for, or any rights to purchase or acquire, any
shares of Common Stock, except for issuances pursuant to the Company's employee
benefit plans or pursuant to executive compensation arrangements, without the
prior written consent of the U.S. Representatives and the Lead Managers.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Act, or to contribute to payments
that the Underwriters may be required to make in respect thereof.
The Company has been informed that, under the terms of the Intersyndicate
Agreement, and subject to certain exceptions, the U.S. Underwriters and any
dealer to whom they sell shares of Common Stock will not offer to sell or sell
shares of Common Stock to non-United States or non-Canadian persons or to
persons they believe intend to resell to non-United States or non-Canadian
persons, and the International Managers and any bank, broker or dealer to whom
they sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to United States or Canadian persons or to persons they believe intend to
resell to United States or Canadian persons, except in each case for
transactions pursuant to the Intersyndicate Agreement, which, among other
things, permits the Underwriters to purchase from each other and offer for
resale such number of shares of Common Stock as the selling Underwriter or
Underwriters and the purchasing Underwriter or Underwriters may agree.
From time to time, the U.S. Representatives have performed financial
advisory and other investment banking services for the Company.
LEGAL OPINIONS
The validity of the Common Stock will be passed upon for the Company by
Hubert Gentry, Jr., Senior Vice President, General Counsel and Secretary of the
Company, 1600 Smith Street, 11th Floor, Houston, Texas 77002 and for the
Underwriters by Mudge Rose Guthrie Alexander & Ferdon, 180 Maiden Lane, New
York, New York 10038. Mudge Rose Guthrie Alexander & Ferdon will rely upon the
opinion of Mr. Gentry as to all matters involving state regulatory consents and
approvals. As of May 10, 1994, Mr. Gentry
16
<PAGE> 19
beneficially owned 23,138 shares of Common Stock acquired pursuant to various
employee benefit plans of the Company.
EXPERTS
The consolidated financial statements and related financial statement
schedules of the Company as of December 31, 1993 and 1992, and for the years
ended December 31, 1993, 1992 and 1991, included or incorporated by reference in
the Form 10-K, which is incorporated by reference in this Prospectus, have been
so included in reliance on the reports of Coopers & Lybrand, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
17
<PAGE> 20
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information................ 2
Incorporation of Certain Documents
by Reference....................... 2
Prospectus Summary................... 3
The Company.......................... 7
Use of Proceeds...................... 10
Capitalization....................... 10
Price Range of Common Stock and
Dividends.......................... 11
Certain United States Federal Tax
Consequences to Non-United States
Holders of Common Stock............ 12
Description of Capital Stock......... 14
Underwriting......................... 15
Legal Opinions....................... 16
Experts.............................. 17
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
13,000,000 SHARES
{NORAM LOGO}
COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
KIDDER, PEABODY & CO.
INCORPORATED
JUNE , 1994
------------------------------------------------------
------------------------------------------------------
<PAGE> 21
***************************************************************************
* *
* 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. *
* *
***************************************************************************
[ALTERNATE COVER PAGE FOR INTERNATIONAL PROSPECTUS]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 25, 1994
PROSPECTUS
13,000,000 SHARES
{NORAM LOGO}
COMMON STOCK
------------------------
Of the 13,000,000 shares of Common Stock, par value $.625 per share (the
"Common Stock"), of NorAm Energy Corp., formerly known as Arkla, Inc. (the
"Company"), offered hereby, 1,950,000 shares are being offered outside the
United States and Canada by the International Managers (the "International
Offering") and 11,050,000 shares are concurrently being offered for sale in the
United States and Canada by the U.S. Underwriters (the "U.S. Offering"). Such
offerings are collectively referred to as the "Offerings." The public offering
price and the aggregate underwriting discount per share of the International
Offering and the U.S. Offering are identical and the closings of the
International Offering and the U.S. Offering are conditioned upon each other.
See "Underwriting."
The Company's Common Stock is listed on the New York Stock Exchange under
the symbol "NAE." On May 23, 1994, the last reported sale price of the Common
Stock on the New York Stock Exchange Composite Tape was $6. See "Price Range of
Common Stock and Dividends."
------------------------
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.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNT(1) COMPANY(2)
PUBLIC
<S> <C <C> <C>
- -----------------------------------------------------------------------------------------------------------
Per Share............................. $ $ $
- -----------------------------------------------------------------------------------------------------------
Total(3).............................. $ $ $
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Company has agreed to indemnify the several International Managers and
the several U.S. Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $200,000.
(3) The Company has granted the International Managers and the U.S. Underwriters
30 day options to purchase up to 292,500 and 1,657,500 additional shares of
Common Stock, respectively, solely to cover over-allotments, if any. If
such options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to the Company will be $ , $ and
$ , respectively. See "Underwriting."
------------------------
The shares of Common Stock are offered hereby by the several International
Managers, subject to prior sale, when, as and if issued to and accepted by them,
subject to certain conditions. The International Managers reserve the right to
withdraw, cancel or modify such offer and to reject orders in whole or in part.
It is expected that delivery of shares of Common Stock will be made in New York,
New York on or about , 1994.
------------------------
MERRILL LYNCH INTERNATIONAL LIMITED
CS FIRST BOSTON
KIDDER, PEABODY INTERNATIONAL
LIMITED
UBS LIMITED
------------------------
The date of this Prospectus is June , 1994.
<PAGE> 22
[ALTERNATE UNDERWRITING SECTION FOR INTERNATIONAL PROSPECTUS]
UNDERWRITING
Subject to the terms and conditions set forth in the International Purchase
Agreement (the "International Purchase Agreement") among the Company and each of
the underwriters named below (the "International Managers"), the Company has
agreed to sell to each of the International Managers, and each of the
International Managers for whom Merrill Lynch International Limited, CS First
Boston Limited, Kidder, Peabody International Limited and UBS Limited are acting
as representatives (the "Lead Managers"), has severally agreed to purchase from
the Company the number of shares of Common Stock set forth below opposite their
respective names. Under certain circumstances, the commitments of non-defaulting
International Managers may be increased as set forth in the International
Purchase Agreement.
<TABLE>
<CAPTION>
NUMBER
INTERNATIONAL MANAGERS OF SHARES
----------------------------------------------------------------- ---------
<S> <C>
Merrill Lynch International Limited..............................
CS First Boston Limited..........................................
Kidder, Peabody International Limited............................
UBS Limited......................................................
---------
Total.................................................. 1,950,000
---------
---------
</TABLE>
The Company has also entered into a U.S. Purchase Agreement (the "U.S.
Purchase Agreement") with certain underwriters in the United States and Canada
(the "U.S. Underwriters"), for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, CS First Boston Corporation and Kidder, Peabody & Co. Incorporated
are acting as representatives (the "U.S. Representatives"). Subject to the terms
and conditions set forth in the U.S. Purchase Agreement, and concurrently with
the sale of 1,950,000 shares of Common Stock to the International Managers, the
Company has agreed to sell to the U.S. Underwriters, and the U.S. Underwriters
have severally agreed to purchase from the Company, an aggregate of 11,050,000
shares of Common Stock. Under certain circumstances as set forth in the
International Purchase Agreement, the commitments of non-defaulting U.S.
Underwriters may be increased. The initial public offering price per share and
the total underwriting discount per share are identical under the International
Purchase Agreement and the U.S Purchase Agreement.
In the International Purchase Agreement and the U.S. Purchase Agreement,
the several International Managers and the several U.S. Underwriters
(collectively, the "Underwriters"), respectively, have agreed, subject to the
terms and conditions set forth therein, to purchase all of the shares of Common
Stock being sold pursuant to each such Purchase Agreement if any such shares of
Common Stock being sold pursuant to each such Purchase Agreement are purchased.
The closing with respect to the sale of the shares of Common Stock
<PAGE> 23
sold pursuant to each Purchase Agreement is a condition to the closing with
respect to the sale of the Common Stock pursuant to the other Purchase
Agreement.
The International Managers and the U.S. Underwriters have entered into an
Intersyndicate Agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Under the terms of the Intersyndicate
Agreement, the Underwriters are permitted to sell shares of Common Stock to each
other for purposes of resale.
The Lead Managers have advised the Company that the International Managers
propose to offer the shares of Common Stock to the public initially at the
public offering price set forth on the cover page of this Prospectus, and to
certain selected dealers at such price less a concession not in excess of
$ per share. The International Managers may allow, and such dealers may
re-allow, a discount not in excess of $ per share on sales to certain
other dealers. After the initial public offering, the public offering price,
concession, reallowance and discount may be changed.
The Company has granted the International Managers an option, exercisable
by the Lead Managers, to purchase up to 292,500 additional shares of Common
Stock at the public offering price, less the underwriting discount. In addition,
the Company has granted the U.S. Underwriters an option, exercisable by the U.S.
Representatives, to purchase up to 1,657,500 additional shares of Common Stock
at the initial public offering price, less the underwriting discount. Such
options, which expire 30 days after the date of this Prospectus, may be
exercised solely to cover over-allotments. To the extent that the Lead Managers
and the U.S. Representatives exercise such options, each of the International
Managers and the U.S. Underwriters, as the case may be, will be obligated,
subject to certain conditions, to purchase approximately the same percentage of
the option shares that the number of shares of Common Stock to be purchased
initially by that Underwriter bears to the total number of shares of Common
Stock to be purchased initially by the International Managers or the U.S.
Underwriters.
The Company has agreed that, for a period of 120 days from the date of this
Prospectus, they will not offer, sell, grant any option for sale of, or
otherwise dispose of any shares of Common Stock or securities convertible into
or exchangeable or exercisable for, or any rights to purchase or acquire, any
shares of Common Stock, except for issuances pursuant to the Company's employee
benefit plans or pursuant to executive compensation arrangements, without the
prior written consent of the U.S. Representatives and the Lead Managers.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Act, or to contribute to payments
that the Underwriters may be required to make in respect thereof.
Purchasers of the shares of Common Stock offered hereby may be required to
pay stamp taxes and other charges in accordance with the laws and practices of
the country of purchase, in addition to the offering price set forth on the
cover page of this Prospectus.
The Company has been informed that, under the terms of the Intersyndicate
Agreement, and subject to certain exceptions, the International Managers and any
bank, broker or dealer to whom they sell shares of Common Stock will not offer
to sell or sell shares of Common Stock to United States or Canadian persons or
to persons they believe intend to resell to United States or Canadian persons,
and the U.S. Underwriters and any dealer to whom they sell shares of Common
Stock will not offer to sell or sell shares of Common Stock to non-United States
or non-Canadian persons or to persons they believe intend to resell to
non-United States or non-Canadian persons, except in each case for transactions
pursuant to the Intersyndicate Agreement, which, among other things, permits the
Underwriters to purchase from each other and offer for resale such number of
shares of Common Stock as the selling Underwriter or Underwriters and the
purchasing Underwriter or Underwriters may agree.
Each International Manager has represented and agreed that as part of the
distribution of the shares of Common Stock offered hereby (i) it has not sold
and will not, for so long as Part III of the Companies Act of 1985 remains in
force in relation to the Common Stock, offer or sell any shares of Common Stock
in the United Kingdom by means of any document, other than to persons whose
ordinary business is to buy or sell shares or debentures (whether as principal
or agent) or in circumstances which do not constitute an offer to
<PAGE> 24
the public within the meaning of the Companies Act of 1985; (ii) it has complied
and will comply with all applicable provisions of the Financial Services Act of
1986 with respect to anything done by it in relation to the Common Stock in,
from or otherwise involving the United Kingdom; (iii) it has only issued or
passed on and will only issue or pass on to any person in the United Kingdom any
document received by it in connection with the issue of the Common Stock if that
person is of the kind described in Article 9(3) of the Financial Services Act of
1986 (Investment Advertisements) (Exemptions) Order 1988; and (iv) once the
provisions of Part V of the Financial Services Act of 1986 come into force in
relation to the Common Stock, it will not, directly or indirectly, issue or
cause to be issued in the United Kingdom any advertisement offering the Common
Stock in circumstances which would require (for the avoidance of any
contravention of those provisions) a prospectus to have been delivered to the
Register of Companies.
<PAGE> 25
[ALTERNATE BACK PAGE FOR INTERNATIONAL PROSPECTUS]
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information................ 2
Incorporation of Certain Documents
by Reference....................... 2
Prospectus Summary................... 3
The Company.......................... 7
Use of Proceeds...................... 10
Capitalization....................... 10
Price Range of Common Stock and
Dividends.......................... 11
Certain United States Federal Tax
Consequences to Non-United States
Holders of Common Stock............ 12
Description of Capital Stock......... 14
Underwriting......................... 15
Legal Opinions....................... 17
Experts.............................. 17
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
13,000,000 SHARES
{NORAM LOGO}
COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH INTERNATIONAL
LIMITED
CS FIRST BOSTON
KIDDER, PEABODY INTERNATIONAL
LIMITED
UBS LIMITED
JUNE , 1994
------------------------------------------------------
------------------------------------------------------
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be paid by the
registrant in connection with the sale and distribution of the securities being
registered hereby, other than underwriting discounts and commissions. All
amounts are estimated except for the Securities and Exchange Commission
registration fee.
<TABLE>
<CAPTION>
AMOUNT
---------
<S> <C>
Securities and Exchange Commission Registration Fee...................... $38,342.00
Transfer Agent Fees and Expenses......................................... *
Printing and Engraving Fees.............................................. *
Accountant's Fees and Expenses........................................... *
Legal Fees and Expenses.................................................. *
Blue Sky Fees and Expenses............................................... *
Miscellaneous............................................................ *
---------
Total.......................................................... *
---------
---------
</TABLE>
- ---------------
* To be filed by Amendment.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- --------------------- ----------------------------------------------------------------------
<S> <C>
* 1.1 -- Form of U.S. Purchase Agreement, to be dated , 1994, among
the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
CS First Boston Corporation and Kidder, Peabody & Co. Incorporated
relating to the Common Stock.
* 1.2 -- Form of International Purchase Agreement, to be dated ,
1994, among the Company and Merrill Lynch International Limited, CS
First Boston Limited, Kidder, Peabody International Limited and UBS
Limited relating to the Common Stock.
4.1 -- Restated Certificate of Incorporation of the Company, as amended.
**4.2 -- By-Laws of the Company (incorporated by reference to Exhibit 3.2 of
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993).
* 5 -- Opinion of Hubert Gentry, Jr., Senior Vice President, General
Counsel and Secretary of the Company as to the legality of the
shares of Common Stock being offered.
23.1 -- Consent of Coopers & Lybrand.
*23.2 -- Consent of Hubert Gentry, Jr., Senior Vice President, General
Counsel and Secretary of the Company (included in Exhibit 5).
**24.1 -- Powers of Attorney of each of the directors and officers of the
Company whose name appears on the signature pages hereof.
</TABLE>
- ---------------
* To be filed by Amendment.
** Previously filed.
II-1
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused Amendment No. 1 to this
Registration Statement No. 33-52853 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on this 25th day of May, 1994.
NORAM ENERGY CORP
(Registrant)
By /s/ MICHAEL B. BRACY
----------------------------------
(Michael B. Bracy)
Executive Vice President and
Principal Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C> <C>
T. MILTON HONEA* Principal executive
----------------------------------- officer and Director
(T. Milton Honea)
Chairman of the Board and
Chief Executive Officer
/s/ MICHAEL B. BRACY Principal financial
----------------------------------- officer and Director
(Michael B. Bracy)
Executive Vice President and
Principal Financial Officer
JACK W. ELLIS, II* Principal accounting
----------------------------------- officer
(Jack W. Ellis, II)
Vice President and
Corporate Controller
JOE E. CHENOWETH* Director
-----------------------------------
(Joe E. Chenoweth)
O. HOLCOMBE CROSSWELL* Director
-----------------------------------
(O. Holcombe Crosswell)
WALTER A. DeROECK* Director
-----------------------------------
(Walter A. DeRoeck)
May 25, 1994
DONALD H. FLANDERS* Director
-----------------------------------
(Donald H. Flanders)
JAMES O. FOGLEMAN* Director
-----------------------------------
(James O. Fogleman)
JOHN P. GOVER* Director
-----------------------------------
(John P. Gover)
ROBERT C. HANNA* Director
-----------------------------------
(Robert C. Hanna)
MYRA JONES* Director
-----------------------------------
(Myra Jones)
SIDNEY MONCRIEF* Director
-----------------------------------
(Sidney Moncrief)
LARRY C. WALLACE* Director
-----------------------------------
(Larry C. Wallace)
D. W. WEIR, SR.* Director
-----------------------------------
(D. W. Weir, Sr.)
*By /s/ MICHAEL B. BRACY
-----------------------------------
(Michael B. Bracy
Attorney-in-Fact)
</TABLE>
II-2
<PAGE> 28
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION OF EXHIBIT PAGE
- --------------------- ------------------------------------------------------------ ------------
<S> <C> <C>
* 1.1 -- Form of U.S. Purchase Agreement, to be dated ,
1994, among the Company and Merrill Lynch, Pierce, Fenner
& Smith Incorporated, CS First Boston Corporation and
Kidder, Peabody & Co. Incorporated relating to the Common
Stock.
* 1.2 -- Form of International Purchase Agreement, to be dated
, 1994, among the Company and Merrill Lynch
International Limited, CS First Boston Limited, Kidder,
Peabody International Limited and UBS Limited relating to
the Common Stock.
4.1 -- Restated Certificate of Incorporation of the Company, as
amended.
**4.2 -- By-Laws of the Company (incorporated by reference to
Exhibit 3.2 of the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993).
* 5 -- Opinion of Hubert Gentry, Jr., Senior Vice President,
General Counsel and Secretary of the Company as to the
legality of the shares of Common Stock being offered.
23.1 -- Consent of Coopers & Lybrand.
*23.2 -- Consent of Hubert Gentry, Jr., Senior Vice President,
General Counsel and Secretary of the Company (included in
Exhibit 5).
**24.1 -- Powers of Attorney of each of the directors and officers
of the Company whose name appears on the signature pages
hereof.
</TABLE>
- ---------------
* To be filed by Amendment.
** Previously filed.
<PAGE> 1
EXHIBIT 4.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
NORAM ENERGY CORP.
EFFECTIVE MAY 22, 1986
AS AMENDED THROUGH MAY 11, 1994
<PAGE> 2
RESTATED CERTIFICATE
OF INCORPORATION
OF NORAM ENERGY CORP.
Duly Adopted In Accordance With The Provisions Of Sections 242 and 245 Of
The General Corporation Law Of The State Of Delaware
(NorAm Energy Corp. Was Originally Incorporated Under The Name Of Southern
Cities Distributing Company By Certificate Of Incorporation Filed With The
Secretary Of State Of Delaware On March 9, 1928.)
FIRST: The name of the Corporation is NorAm Energy Corp.
SECOND: The principal office of the Corporation within the State of
Delaware is located at 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of its resident agent is THE CORPORATION TRUST COMPANY.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The capital stock of the Corporation shall consist of ten million
(10,000,000) shares of Preferred Stock of the par value of Ten Cents ($0.10)
per share (herein called "Preferred Stock") and one hundred fifty million
(150,000,000) shares of Common Stock of the par value of Sixty-two and one-half
Cents ($0.625) per share (herein called "Common Stock").
The designations and the powers, preferences and rights and the
qualifications, limitations and/or restrictions thereof, of the classes of
stock of the Corporation and the authority thereto expressly vested in the
Board of Directors of the Corporation shall be as follows:
VOTING RIGHTS. Each holder in person or by proxy, of record of Common
Stock shall be entitled to one vote, for each share of such stock standing in
such stockholder's name on the books of the Corporation and each holder of
record of Preferred Stock shall have such voting rights as may be stated and
expressed in a resolution or resolutions adopted by the Board of Directors
providing for the issuance of any series thereof included in a certificate
filed pursuant to the applicable law of the State of Delaware (herein called a
"Certificate of Designations"); provided, however, that in elections of
directors there shall be cumulative voting so that each such stockholder, in
person or by proxy, shall have as many votes as shall equal the number of votes
appertaining to the shares of such stock standing in his name as set forth
above multiplied by the number of directors to be elected, and such stockholder
may cast all such votes for a single director or may distribute them among the
number to be voted for, or for any two or more of them as he may see fit.
<PAGE> 3
The provisions of this Article FOURTH granting cumulative voting
privileges in the election of directors shall not be amended without the
affirmative vote of the holders of at least two-thirds of the outstanding stock
of the Corporation.
The provisions of Article SIXTH granting conditional preemptive rights
shall not be amended without the affirmative vote of the holders of at least
two-thirds of the outstanding Common Stock of the corporation.
The holders of a majority of the voting power of the shares entitled to
vote, and in case of a class vote a majority of the shares of the class
entitled to vote as a class, present in person or represented by proxy, shall
constitute a quorum at any meeting of stockholders. If, for any reason, such
quorum shall not be represented at any meeting, the meeting may be adjourned
from time to time by the stockholders represented at such meeting. At any
adjourned meeting at which the requisite number of shares shall be present in
person or represented by proxy, any business may be transacted which might have
been transacted at the meeting as originally called.
DIVIDENDS AND RESTRICTIONS ON ACQUISITION OF STOCK. Any and all right,
title, interest and claim in or to any dividends declared, or other
distributions made, by the Corporation, whether in cash, stock or otherwise,
which are unclaimed by the stockholder entitled thereto for a period of six
years after the close of business on the payment date, shall be and be deemed
to be extinguished and abandoned; and such unclaimed dividends or other
distributions in the possession of the Corporation, its transfer agents or
other agents or depositories, shall at such time become the absolute property
of the Corporation, free and clear of any and all claims of any persons
whatsoever.
LIQUIDATION AND DISSOLUTION. The holders of any series of the Preferred
Stock shall be entitled in the event of the liquidation, dissolution or winding
up of the Corporation, whether voluntary or otherwise, to such amounts and in
such priority of payment among series of Preferred Stock as shall be set forth
in the Certificate of Designations with respect to such series. After the
payment in full to the holders of the Preferred Stock and to any other class of
stock to which the Common Stock ranks junior of all amounts so payable to them
upon such liquidation, dissolution or winding up, the remaining assets shall be
divided and paid to the holders of the Common Stock in equal amounts per share,
according to their respective rights. If upon any such liquidation,
dissolution or winding up, and after distribution to each series of Preferred
Stock having priority in distribution of assets upon liquidation, if any, the
assets available for distribution to holders of shares of Preferred Stock of
any series shall be insufficient to pay such holders and the holders of any
other shares ranking on a parity with such shares as to the distribution of
assets on liquidation the full preferential amount to which they are
respectively entitled, then such assets shall be distributed pro rata among the
holders of shares of such series of Preferred Stock and such other shares
according to the amounts of their respective rights. The sale of all or
substantially all the property of the Corporation to, or the merger or
consolidation of the
-2-
<PAGE> 4
Corporation into or with, any other corporation, shall not be deemed to be a
distribution of assets or a liquidation, dissolution or winding up for the
purposes of this paragraph.
ISSUANCE OF PREFERRED STOCK IN SERIES. The Board of Directors, or a
designated committee thereof, is expressly authorized, subject to limitations
prescribed by law and the provisions of this Article FOURTH to provide by
resolu- tion for the issuance of shares of Preferred Stock in series, and by
filing a Certificate of Designations with respect to such series, to establish
from time to time the number of shares to be included in each such series, and
to fix the designations, powers, preferences and relative, participating,
optional or other rights, if any, of the shares of each such series and the
qualifications, limitations or restrictions thereof, if any. Except in respect
of series particulars fixed by the Board of Directors or its committee as
permitted hereby, all shares of Preferred Stock shall be of equal rank and
shall be identical. All shares of any one series of Preferred Stock so
designated by the Board of Directors shall be alike in every particular, except
that shares of any one series issued at different times may differ as to the
dates from which dividends thereon shall be cumulative.
The authority of the Board of Directors, or a designated committee
thereof, with respect to each series shall include, but not be limited to,
determination of the following to be set forth in the Certificate of
Designations creating each such series:
(a) The number of shares constituting that series and the distinctive
designation of that series;
(b) Whether that series shall pay dividends, and, if so, the dividend rate
on the shares of that series, the payment date for dividends, whether dividends
shall be cumulative, and, if so, the date or dates (or the method of
determining the date or dates) from which dividends payable on such shares
shall cumulate, and the priority, if any, of payment of dividends on shares of
that series;
(c) Whether holders of that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such voting
rights;
(d) Whether that series shall be convertible into or exchangeable for
other securities, and, if so, the terms and conditions of such conversion or
exchange, including provision for adjustment of the conversion or exchange rate
in such events as the Board of Directors, or a designated committee thereof,
shall determine;
(e) Whether that series shall be redeemable, and, if so, the terms and
conditions of such redemption, including the time or date upon or after which
they shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and at different
redemption dates;
-3-
<PAGE> 5
(f) Whether that series shall have a sinking fund or make other provision
for the redemption or purchase of shares of that series, and, if so, the terms
and amount governing the operation of such sinking fund;
(g) The rights of holders of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of shares
of that series;
(h) The conditions or restrictions upon the creation of indebtedness of
the Corporation or upon the issuance of additional Preferred Stock or other
capital stock ranking on a parity therewith or prior thereto, with respect to
dividends or distribution of assets;
(i) The conditions or restrictions with respect to the payment of
dividends upon, or the making of other distributions to, or the acquisition or
redemption of, shares ranking junior to the Preferred Stock or any series
thereof with respect to dividends or distribution of assets; and
(j) Any other relative rights, preferences and limitations of that series.
Any of the terms, including voting rights, of any series may be made
dependent upon facts ascertainable outside the Certificate of Incorporation and
the Certificate of Designations, provided that the manner in which such facts
shall operate upon such terms is clearly and expressly set forth in the
Certificate of Incorporation or in the Certificate of Designations.
Unless otherwise provided in a Certificate of Designations with respect to
any series, the Preferred Stock, with respect to both dividends and
distribution of assets, shall rank prior to the Common Stock. Whenever
reference is made in this Article FOURTH to shares ranking "prior to" another
class or series of shares or "on a parity with" another class or series of
shares, such reference shall mean and include all other shares of the
Corporation in respect of which the rights of the holders thereof as to payment
of dividends and distribution of assets are given preference over, or rank
equally with, as the case may be, the rights of the holders of such class or
series of shares. The terms "junior" and "junior stock" when used with respect
to the Preferred Stock, shall mean shares of the Corporation ranking junior to
the Preferred Stock as to dividends and distribution of assets. The phrase
"distribution of assets" shall mean the distribution of assets on liquidation,
dissolution or winding up.
Any shares of Preferred Stock which are redeemed or purchased by the
Corporation and retired, or which are converted into or exchanged for other
securities, shall be restored to the status of authorized but unissued shares
of Preferred Stock and may be reissued as shares of another series.
-4-
<PAGE> 6
FIFTH: The affirmative vote of the holders of not less than 75% of the
outstanding shares of "Voting Stock" (as hereinafter defined) held by
stockholders other than a "Substantial Stockholder" (as hereinafter defined)
shall be required for the approval or authorization of any "Business
Combination" (as hereinafter defined) of the Corporation with any Substantial
Stockholder; provided, however, that the 75% voting requirement shall not be
applicable if either:
(i) The "Continuing Directors" (as hereinafter defined) of the Corporation
by at least a two-thirds vote (a) have expressly approved in advance the
acquisition of the outstanding shares of Voting Stock that caused such
Substantial Stockholder to become a Substantial Stockholder, or (b) have
expressly approved such Business Combination either in advance of or subsequent
to such Substantial Stockholder having become a Substantial Stockholder; or
(ii) The cash or fair market value (as determined by at least two-thirds
of the Continuing Directors) of the property, securities or other consideration
to be received per share by holders of Voting Stock of the Corporation in the
Business Combination is not less than the "Highest Per Share Price" or the
"Highest Equivalent Price" (as these terms are hereinafter defined) paid by the
Substantial Stockholder in acquiring any of its holdings of the Corporation's
Voting Stock.
For purposes of this Article:
(i) The term "Business Combination" shall include, without limitation, (a)
any merger or consolidation of the Corporation, or any entity controlled by or
under common control with the Corporation, with or into any Substantial
Stockholder, or any entity controlled by or under common control with the
Substantial Stockholder, (b) any merger or consolidation of a Substantial
Stockholder, or any entity controlled by or under common control with the
Substantial Stockholder, with or into the Corporation or any entity controlled
by or under common control with the Corporation, (c) any sale, lease, exchange,
transfer, or other disposition of all or substantially all of the property and
assets of the Corporation to a Substantial Stockholder, or any entity
controlled by or under common control with the Substantial Stockholder, (d) any
purchase, lease, exchange, transfer or other acquisition of all or
substantially all of the property and assets of a Substantial Stockholder, or
any entity controlled by or under common control with the Substantial
Stockholder, by the Corporation, (e) any recapitalization that would have the
effect of increasing the voting power of a Substantial Stockholder, and (f) any
agreement, contract or other arrangement providing for any of the transactions
described in this definition of Business Combination.
(ii) The term "Substantial Stockholder" shall mean and include any
individual, corporation, partnership or other person or entity which, together
with its "Affiliates" and "Associates" (as defined in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934 as in effect at
the date of the adoption of this Article by the stockholders of the
Corporation) (collectively, and as so in effect, the "Exchange Act"),
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"Beneficially Owns" (as defined in Rule 13d-3 of the Exchange Act) in the
aggregate 10 percent or more of the outstanding Voting Stock of the
Corporation, and any Affiliate or Associate of any such individual,
corporation, partnership or other person or entity.
(iii) Without limitation, any share of Voting Stock of the Corporation
that any Substantial Stockholder has the right to acquire at any time
(notwithstanding that Rule 13d-3 of the Exchange Act deems such shares to be
beneficially owned only if such right may be exercised within 60 days) pursuant
to any agreement, or upon exercise of conversion rights, warrants or options,
or otherwise, shall be deemed to be Beneficially Owned by the Substantial
Stockholder and to be outstanding for purposes of clause (ii) above.
(iv) For the purposes of subparagraph (ii) of the first paragraph of this
Article, the term "other consideration to be received" shall include, without
limitation, Common Stock or other capital stock of the Corporation retained by
its existing stockholders other than Substantial Stockholders or other parties
to such Business Combination in the event of a Business Combination in which
the Corporation is the surviving corporation.
(v) The term "Voting Stock" shall mean all of the outstanding shares of
Common Stock and the outstanding shares of Preference Stock entitled to vote on
each matter on which the holders of record of Common Stock shall be entitled to
vote, and each reference to a proportion of shares of Voting Stock shall refer
to such proportion of the votes entitled to be cast by such shares.
(vi) The term "Continuing Director" shall mean a Director who was a member
of the Board of Directors of the Corporation immediately prior to the time that
the Substantial Stockholder involved in a Business Combination became a
Substantial Stockholder.
(vii) A Substantial Stockholder shall be deemed to have acquired a share
of the Voting Stock of the Corporation at the time when such Substantial
Stockholder became the Beneficial Owner thereof. With respect to the shares
owned by Affiliates, Associates or other persons whose ownership is attributed
to a Substantial Stockholder under the foregoing definition of Substantial
Stockholder, if the price paid by such Substantial Stockholder for such shares
is not determinable by two-thirds of the Continuing Directors, the price so
paid shall be deemed to be the higher of (a) the price paid upon the
acquisition thereof by the Affiliate, Associate or other person or (b) the
market price of the shares in question at the time when the Substantial
Stockholder became the Beneficial Owner thereof.
(viii) The terms "Highest Per Share Price" and "Highest Equivalent Price"
as used in this Article shall mean the following: If there is only one class
of capital stock of the Corporation issued and outstanding, the Highest Per
Share Price shall mean the highest price that can be determined to have been
paid at any time by the Substantial Stockholder for any share or shares of that
class of capital stock. If there is more than one class of capital stock of
the Corporation issued and outstanding, the Highest Equivalent Price shall
mean, with respect to each class and series of capital stock of the
Corporation, the amount
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determined by two-thirds of the Continuing Directors, on whatever basis they
believe is appropriate, to be the highest per share price equivalent of the
highest price that can be determined to have been paid at any time by the
Substantial Stockholder for any share or shares of any class or series of
capital stock of the Corporation. In determining the Highest Per Share Price
and the Highest Equivalent Price, all purchases by the Substantial Stockholder
shall be taken into account regardless of whether the shares were purchased
before or after the Substantial Stockholder became a Substantial Stockholder.
Also, the Highest Per Share Price and the Highest Equivalent Price shall
include any brokerage commissions, transfer taxes and soliciting dealers' fees
or other value paid by the Substantial Stockholder with respect to the shares
of capital stock of the Corporation acquired by the Substantial Stockholder.
In the case of any Business Combination with a Substantial Stockholder, the
Continuing Directors shall determine the Highest Equivalent Price for each
class and series of the capital stock of the Corporation.
The provisions set forth in this Article may not be amended, altered,
changed or repealed in any respect unless such action is approved by the
affirmative vote of the holders of not less than 75 percent of the outstanding
shares of Voting Stock (as defined in this Article) of the Corporation at a
meeting of the stockholders duly called for the consideration of such
amendment, alterations, change or repeal; provided, however, that if there is a
Substantial Stockholder (as defined in this Article), such action must also be
approved by the affirmative vote of the holders of not less than 75 percent of
the outstanding shares of Voting Stock held by the stockholders other than the
Substantial Stockholder.
SIXTH: The provisions inserted herein for the management of the business
and for the conduct of the affairs of the Corporation and creating, defining,
limiting and regulating the powers thereof and of the directors and
stockholders, the same being in furtherance of and in addition to and not in
limitation of the powers now or hereafter conferred by the present or any
future law or laws of the State of Delaware, are as follows:
The number of directors of the Corporation shall be such as from time to
time shall be fixed by, or in the manner provided in, the By-laws, but shall
not be less than three.
No holder of stock of this Corporation shall be entitled to any preemptive
right to subscribe for or purchase any stock or other securities of this
Corporation.
The Corporation shall have power, acting through its Board of Directors,
except that in cases where the action of the stockholders shall be required by
statute such action shall also be obtained, to do the following:
(a) The Board of Directors shall have power to make, alter, amend, and
repeal the By-laws of the Corporation subject to the power of the stockholders
to amend, alter or repeal any By-laws thus adopted by the Board of Directors;
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(b) To guarantee the payment of the principal, interest or dividends on
the stocks, bonds, debentures or other securities issued by or the performance
of any other contract or obligation of any other person, corporation or
partnership whatsoever, so far as the same is not contrary to law, whenever in
the judgment of the Board of Directors or executive committee it shall be
necessary, proper or convenient for the business of the Corporation or in
furtherance of its interest so to do; and in connection with any such guaranty
to mortgage, pledge or convey in trust all or part of the Corporation's
properties and assets as security for the obligation thus incurred;
(c) The Board of Directors shall have power from time to time to appoint
an executive committee consisting of two or more of their number, which
committee shall for the time being, as may be provided in a resolution of the
Board of Directors, or in the By- laws of this Corporation, have or exercise
any and all of the powers of the Board of Directors in the management of the
business and affairs of this Corporation;
(d) The Board of Directors shall have power to determine from time to
time whether and to what extent and under what conditions and regulations the
accounts, books and records of this Corporation, other than as may be required
by the laws of Delaware, or any of them, shall be open to the inspection of the
stockholders; and no stockholder shall have any right to inspect any account or
book or document of this Corporation except as conferred by the Statutes of the
State of Delaware, unless and until
SEVENTH: A director of the Corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, as the same exists or hereafter may be amended, or (iv) for
any transaction from which the director derived an improper personal benefit.
This Article shall not eliminate or limit the liability of a director for any
act or omission occurring prior to the effective date of the Amendment adding
this Article to the Restated Certificate of Incorporation. Any repeal or
amendment of this Article by the stockholders of the corporation shall be
prospective only, and shall not adversely affect any limitations on the
personal liability of a director of the corporation existing at the time of
such repeal or amendment. In addition to the circumstances in which a director
of the corporation is not personally liable as set forth in the proceeding
sentence, a director shall not be liable to the fullest extent permitted by any
Amendment to the Delaware General Corporation law hereafter enacted that
further limits the liability of a director.
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 1 to this
registration statement on Form S-3 (File No. 33-52853) of our reports, which
include explanatory paragraphs concerning (1) the Company being named as a
defendant in a lawsuit filed by the Resolution Trust Corporation for which the
ultimate outcome of the litigation cannot presently be determined and (2) the
Company's changes in accounting methods for postemployment benefits and
postretirement benefits, dated March 24, 1994, on our audits of the consolidated
financial statements and financial statement schedules of Arkla, Inc. and
Subsidiaries (since renamed NorAm Energy Corp. and Subsidiaries) as of December
31, 1993 and 1992, and for the years ended December 31, 1993, 1992 and 1991. We
also consent to the reference to our firm under the caption "Experts."
/s/ COOPERS & LYBRAND
Houston, Texas
May 25, 1994
