<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-30927
PROSPECTUS SUPPLEMENT
(To Prospectus dated September 12, 1997)
[ANADARKO LOGO]
$100,000,000
7% Debentures due 2027
Interest payable May 15 and November 15
ISSUE PRICE: 100%
Interest on the Debentures is payable semi-annually on May 15 and November 15
commencing May 15, 1998. The Debentures are not redeemable at any time prior to
maturity and will not be subject to any sinking fund.
Debentures will be issued in book-entry form represented by a permanent global
Debenture registered in the name of The Depository Trust Company (the
"Depositary"), or a nominee of the Depositary. Interests in Debentures will only
be evidenced by, and transfers thereof will only be effected through, records
maintained by the Depositary and its participants. Except as described herein
and in the accompanying Prospectus, Debentures in definitive form will not be
issued.
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 SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) THE COMPANY(3)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture 100% .875% 99.125%
- ---------------------------------------------------------------------------------------------------------
Total $100,000,000 $875,000 $99,125,000
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from November 24, 1997.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $100,000.
The Debentures are being offered, subject to prior sale, when, as and if
accepted by the Underwriter, and subject to certain other conditions. It is
expected that delivery of the Debentures will be made through the facilities of
the Depositary on or about November 24, 1997, against payment therefor in
immediately available funds.
J.P. MORGAN & CO.
November 19, 1997
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
DEBENTURES. SPECIFICALLY, THE UNDERWRITER MAY OVERALLOT IN CONNECTION WITH THE
OFFERING, AND MAY BID FOR, AND PURCHASE, THE DEBENTURES IN THE OPEN MARKET. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH THEY RELATE OR ANY OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds............................................. S-3
Ratio of Earnings to Fixed Changes.......................... S-3
Certain Terms of the Debentures............................. S-3
Underwriting................................................ S-4
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
The Company................................................. 4
Use of Proceeds............................................. 4
Ratio of Earnings to Fixed Charges and Earnings to Combined
Fixed Charges and
Preferred Stock Dividends................................. 4
Description of Debt Securities.............................. 5
Description of Capital Stock, Rights Agreement and Restated
Certificate of Incorporation.............................. 13
Plan of Distribution........................................ 16
Validity of Securities...................................... 17
Experts..................................................... 17
</TABLE>
S-2
<PAGE> 3
USE OF PROCEEDS
It is anticipated that the net proceeds from the sale of the Debentures,
estimated to be approximately $99,025,000 after offering expenses, will be used
to reduce a portion of outstanding borrowings under non-committed lines of
credit and commercial paper. As of November 19, 1997, the average interest rate
on such outstanding indebtedness, which had original maturities ranging from
overnight to 33 days, was 5.72% per annum.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges for the periods shown.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
- -------------------------------- SEPTEMBER 30,
1992 1993 1994 1995 1996 1997
- ---- ---- ---- ---- ---- -------------
<C> <C> <C> <C> <C> <C>
1.81 2.68 2.11 1.24 3.34 2.72
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings include income before income taxes
and fixed charges. Fixed charges include interest and amortization of debt
expenses, and the estimated interest component of rentals.
CERTAIN TERMS OF THE DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to in the prospectus (the "Prospectus") that this Prospectus
Supplement accompanies as "Senior Debt Securities") supplements, and to the
extent inconsistent therewith replaces, the description of the general terms and
provisions of Senior Debt Securities set forth in the Prospectus, to which
description reference is hereby made. Capitalized terms not otherwise defined
herein have the meanings given to them in the Prospectus.
GENERAL
The Debentures offered hereby will be limited to $100,000,000 aggregate
principal amount and will mature on November 15, 2027. The Debentures will bear
interest from November 24, 1997 at the rate per annum shown on the front cover
of this Prospectus Supplement payable semi-annually on May 15 and November 15 of
each year, commencing May 15, 1998, to the person in whose name the Debenture
(or any predecessor) is registered at the close of business on the May 1 or
November 1, as the case may be, next preceding such interest payment date. The
Debentures are not entitled to any sinking fund.
REDEMPTION
The Debentures may not be redeemed at any time prior to maturity.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be issued in the form of fully registered Global Notes.
The Global Notes will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depositary") and registered in the name of the
Depositary's nominee.
The Depositary has advised the Company and the Underwriter as follows: The
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement
S-3
<PAGE> 4
of securities certificates. "Direct Participants" include securities brokers and
dealers (including the Underwriter), banks, trust companies, clearing
corporations and certain other organizations. The Depositary is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the Depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The rules applicable to the Depositary
and its Participants are on file with the Securities and Exchange Commission.
A further description of the Depositary's procedures with respect to Global
Notes representing the Debentures is set forth in the Prospectus under
"Description of Debt Securities -- General Provisions Applicable to Both
Indentures -- Global Notes."
SETTLEMENT AND PAYMENT
Settlement for the Debentures by the Underwriter and secondary market
trading activity will be made in immediately available funds. All payments of
principal and interest will be made by the Company in immediately available
funds.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to J.P. Morgan Securities Inc. (the
"Underwriter"), and the Underwriter has agreed to purchase from the Company
$100,000,000 principal amount of the Debentures.
The Underwriting Agreement provides that the obligations of the Underwriter
are subject to certain conditions and that the Underwriter will be obligated to
purchase all of the Debentures if any are purchased.
The Company has been advised by the Underwriter that it proposes to offer
the Debentures to the public initially at the offering price set forth on the
cover page of this Prospectus Supplement, and to certain dealers at that price
less a concession of 0.50% of the principal amount of the Debentures; that the
Underwriter and such dealers may reallow a discount not in excess of 0.25% of
such principal amount on sales to other dealers after the initial public
offering of the Debentures offered hereby; and that the public offering price
and concession and discount to dealers may be changed by the Underwriter.
The Company has agreed to indemnify the Underwriter against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended,
and to contribute to payments the Underwriter may be required to make in respect
thereof.
In the ordinary course of their respective businesses, J.P. Morgan
Securities Inc. and its affiliates have engaged and may in the future engage in
commercial banking and investment banking transactions with the Company.
In connection with the offering of the Debentures, the Underwriter may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Debentures. Specifically, the Underwriter may overallot in connection with
the offering of the Debentures, creating a short position. In addition, the
Underwriter may bid for, and purchase, Debentures in the open market to cover
shorts or to stabilize the price of the Debentures. Finally, the Underwriter may
reclaim selling concessions allowed for distributing the Debentures in the
offering of the Debentures, if the Underwriter repurchases previously
distributed Debentures in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the Debentures above
independent market levels. The Underwriter is not required to engage in any of
these activities, and may end any of them at any time.
Prior to the offering made hereby, there has been no public market for the
Debentures. The Company does not intend to list the Debentures on any securities
exchange. The Company has been advised by the Underwriter that the Underwriter
currently intends to make a market in the Debentures; however, the Underwriter
is not obligated to do so, and the Underwriter may discontinue any such market
making at any time without notice. Accordingly no assurance can be given as to
the liquidity of or trading market for Debentures.
S-4
<PAGE> 5
SEPTEMBER 2, 1997
[ANADARKO LOGO]
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
------------------------
Anadarko Petroleum Corporation (the "Company") from time to time may offer
its senior debt securities (the "Senior Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities") consisting of debentures, notes
and/or other unsecured evidences of indebtedness (the Senior Debt Securities and
the Subordinated Debt Securities, collectively referred to as the "Debt
Securities"). The Company may also from time to time offer shares of its
Preferred Stock, $1.00 par value (the "Preferred Stock") or Common Stock, $0.10
par value (the "Common Stock"). The aggregate offering price of the Debt
Securities, the Preferred Stock and the Common Stock offered hereby (the
"Securities") will not exceed $300,000,000. The Securities may be offered as
separate series in amounts, at prices and on terms to be determined at the time
of sale and to be set forth in supplements to this Prospectus.
The Company may sell Securities to or through underwriters or dealers
designated from time to time, and also may sell Securities directly to other
purchasers or through agents designated from time to time. See "Plan of
Distribution."
As used herein, Debt Securities shall include securities denominated in
U.S. dollars or, at the option of the Company if so specified in the applicable
Prospectus Supplement, in any other currency, including composite currencies
such as the European Currency Unit. Debt Securities of a series may be issuable
in registered definitive form ("Registered Notes") or in the form of one or more
global securities (each a "Global Note"). The Subordinated Debt Securities will
be subordinated in right of payment to all present and future Senior
Indebtedness (as defined) of the Company. See "Description of Debt Securities --
Subordination."
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, currencies, denominations, maturity,
rate (which may be fixed or variable) and time of payment of interest, if any,
terms for redemption at the option of the Company or the holder, terms for
sinking or purchase fund payments, the initial public offering price, the
conversion price (in the case of Subordinated Debt Securities that may be
convertible into shares of Common Stock of the Company), any listing or proposed
listing on a securities exchange, the names of any underwriters or agents, the
principal amounts, if any, to be purchased by underwriters and the compensation
of such underwriters or agents and the other terms in connection with the
offering and sale of the Debt Securities in respect of which this Prospectus is
being delivered, are set forth in the accompanying Prospectus Supplement
("Prospectus Supplement").
The Prospectus Supplement will also set forth the specific designation,
rights, preferences, privileges and restrictions, including dividend rate (or
manner of calculation thereof), time of payment of dividend, liquidation value,
terms for conversion (if any) into Common Stock, listing (if any) on a
securities exchange, terms for mandatory or optional redemption and any other
specific terms of the series of Preferred Stock in respect of which this
Prospectus is being delivered. If so specified in the Prospectus Supplement, the
Preferred Stock may be represented by Depositary Shares entitling the holder
proportionally to all rights and preferences of the Preferred Stock.
Shares of the Common Stock are listed on the New York Stock Exchange.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is September 12, 1997
<PAGE> 6
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED
HEREIN OR THEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN
THE SECURITIES OR AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY,
SECURITIES IN ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE
DATES.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a registration statement on Form S-3 (together
with all amendments and exhibits, referred to as the "Registration Statement")
under the Securities Act of 1933, as amended, with respect to the Securities.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information pertaining
to the Securities and the Company, reference is made to the Registration
Statement.
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 and other information with the Commission. Such reports
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. 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 Commission
maintains a Web site at http://www.sec.gov that contains reports, proxy and
other information regarding the Registrant. In addition, copies of such reports
and other information concerning the Company may also be inspected and copied at
the library of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act (File No. 1-8968) are incorporated herein by reference: (a)
Form 8-A, filed on September 4, 1986, for registration of Common Stock, (b) Form
8-A, filed on October 5, 1988, for registration of Series A Preferred Stock
Purchase Rights, (c) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (the "Form 10-K"), which contains the consolidated financial
statements of the Company and its subsidiaries by incorporation by reference to
the 1996 Annual Report, (d) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, (e) Form 10-K/A, dated June 25, 1997, which contains the Annual
Report of the Anadarko Employee Savings Plan on Form 11-K and (f) Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997. All other documents
filed by the Company pursuant to Sections 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 Securities shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents.
Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request, a copy of any or all of the foregoing documents
2
<PAGE> 7
incorporated herein by reference (other than exhibits unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
documents should be directed to Suzanne Suter, Corporate Secretary, Anadarko
Petroleum Corporation, 17001 Northchase Drive, Houston, Texas 77060-2141. The
Company's telephone number is (281) 875-1101.
3
<PAGE> 8
THE COMPANY
The Company is one of the world's largest independent oil and gas
exploration and production companies with 601 million energy equivalent barrels
of proved reserves as of December 31, 1996.
The Company's reserve mix has shifted dramatically in recent years,
primarily due to major crude oil discoveries both in Algeria and the U.S., which
have resulted in a larger and more balanced portfolio of energy reserves. As of
year-end 1996, crude oil, condensate and natural gas liquids reserves accounted
for 50 percent of the Company's total reserves compared to just six percent at
year-end 1986.
About 80 percent of the Company's proved reserves are located in the U.S.,
primarily in the mid-continent (Kansas, Oklahoma and Texas) area, offshore in
the Gulf of Mexico and in Alaska. Currently, all of the Company's production is
in the U.S. The Company also owns interests in 13 gas gathering systems and four
gas processing plants in the U.S.
Internationally, the Company is exploring for and developing crude oil
reserves in Algeria's Sahara Desert. As of December 31, 1996, the Company has
recorded 124.3 million barrels of proved crude oil and condensate reserves in
Algeria, which accounts for about 20 percent of Anadarko's total proved
reserves. Development operations are now underway. The Company is also
participating in other exploration projects in Eritrea, Jordan and Peru. The
Company's international projects are in the exploration or the exploration and
development stages and to date have not generated any revenue.
The Company's executive offices are located at 17001 Northchase Drive,
Houston, Texas 77060-2141, where the telephone number is (281) 875-1101.
USE OF PROCEEDS
Except as otherwise described in the Prospectus Supplement relating to an
offering of Securities, the net proceeds from the sale of the Securities will be
used for general corporate purposes, including the refinancing of outstanding
indebtedness and the financing of capital expenditures. Any specific allocation
of the net proceeds of an offering of Securities to a specific purpose will be
determined at the time of such offering and will be described in the related
Prospectus Supplement.
RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges for the periods shown.
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31 ENDED
- ----------------------------------------------------------------- JUNE 30,
1992 1993 1994 1995 1996 1997
- --------------------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
1.81 2.68 2.11 1.24 3.34 3.12
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings include income before income taxes
and fixed charges. Fixed charges include interest and amortization of debt
expenses, and the estimated interest component of rentals.
No shares of Preferred Stock were outstanding during any of the periods
presented. Accordingly, the ratio of earnings to fixed charges and preferred
stock dividends for each of the periods presented is the same as the ratio of
earnings to fixed charges.
4
<PAGE> 9
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities will be unsecured obligations of the Company. The
Senior Debt Securities are to be issued under the Indenture (the "Senior
Indenture") to be entered into by and between the Company and Harris Trust and
Savings Bank (the "Senior Trustee") and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated Debt
Securities are to be issued under the Indenture (the "Subordinated Indenture")
to be entered into by and between the Company and First Chicago NBD (the
"Subordinated Trustee").
The Senior Indenture and the Subordinated Indenture are sometimes
hereinafter collectively referred to as the "Indentures." The Senior Trustee and
the Subordinated Trustee are sometimes hereinafter collectively referred to as
the "Trustees." References set forth in the following description of Debt
Securities are to sections of both Indentures unless otherwise indicated.
The terms of the Debt Securities include those stated in the applicable
Indentures and those made part of such Indentures by reference to the Trust
Indenture Act of 1939, as amended. The Debt Securities are subject to all such
terms, and prospective purchasers of Debt Securities are referred to the
applicable Indentures and the Trust Indenture Act for a statement of those
terms. The statements under this caption relating to the Debt Securities and the
Indentures are summaries and do not purport to be complete. Such summaries use
certain terms which are defined in the Indentures and are qualified in their
entirety by express reference to the Indentures which have been filed as
exhibits to the Registration Statement of which this Prospectus is a part.
GENERAL PROVISIONS APPLICABLE TO BOTH INDENTURES
The Indentures do not limit the aggregate principal amount of debentures,
notes or other evidences of indebtedness which may be issued thereunder and
provide that Debt Securities may be issued thereunder from time to time in one
or more series.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby (the "Offered Debt Securities") for
the following terms of the Offered Debt Securities: (1) the title of the Offered
Debt Securities; (2) any limit on the aggregate principal amount of the Offered
Debt Securities; (3) the date or dates on which the Offered Debt Securities will
mature; (4) the rate or rates (which may be fixed or variable) per annum at
which the Offered Debt Securities will bear interest, if any, and the date from
which such interest will accrue; (5) the dates on which any such interest will
be payable and the Regular Record Dates for such Interest Payment Dates; (6) any
mandatory or optional sinking fund or purchase fund or analogous provisions; (7)
if applicable, the date after which and the price or prices at which the Offered
Debt Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed at the option of the Company or of the Holder thereof
and the other detailed terms and provisions of such optional or mandatory
redemption; (8) if applicable, any terms by which the Subordinated Securities
may be convertible into Common Stock; (9) any restrictive covenants included for
the benefit of Holders of the Offered Debt Securities; (10) any additional
Events of Default provided with respect to the Offered Debt Securities; (11) the
currency of payment of the principal of, premium, if any, and interest on the
Offered Debt Securities; (12) any index used to determine the amount of payments
of the principal of, premium, if any, and interest on the Offered Debt
Securities; (13) whether the Offered Debt Securities are to be issued in whole
or part in the form of a Global Note or Notes and, if so, the identity of the
Depositary for such Global Note or Notes; (14) the terms and conditions, if any,
upon which a Global Note or Notes may be exchanged in whole or in part for other
definitive Offered Debt Securities; and (15) any other terms of the Offered Debt
Securities. (Section 301)
5
<PAGE> 10
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of, premium, if any, and interest on the Offered Debt Securities
will be payable, and the Offered Debt Securities will be exchangeable and
transfers thereof will be registrable, at the applicable Corporate Trust Offices
of the Trustees, provided that at the option of the Company, payment of any
interest may be made by check mailed to the address of the Person entitled
thereto as it appears in the Security Register. (Sections 202, 305 and 1002)
The Prospectus Supplement relating to a series of Offered Debt Securities
will specify the currency or currencies in which the principal and interest are
to be paid, the denomination of the Offered Debt Securities and whether Global
Notes are to be issued. (Section 302) Special provisions relating to a series of
Offered Debt Securities denominated in or payable by reference to a currency
other than U.S. dollars, and any applicable currency exchange and tax
information, will be described in the Prospectus Supplement relating to such
series. No service charge will be made for any registration of transfer or
exchange of the Offered Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. (Section 305)
Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be offered and sold at a substantial discount from the
stated principal amount. Special federal income tax, accounting and other
considerations applicable to any such Original Issue Discount Securities will be
described in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Offered Debt Securities, the covenants applicable to the
Debt Securities would not necessarily afford holders protection in the event of
a highly leveraged or other transaction involving the Company or in the event of
a material adverse change in the Company's financial condition or results of
operations.
Global Notes
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Notes that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the Prospectus Supplement relating
to such series. The specific terms of the depositary arrangement with respect to
any Debt Securities of a series will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will apply to all depositary arrangements.
Upon the issuance of a Global Note, the Depositary for such Global Note
will credit, on its book- entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Note to the
accounts of institutions that have accounts with such Depositary (the
"participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities, or by the Company if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a Global Note will be limited to participants or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Note will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depositary for such Global Note
(with respect to interests of participants) or by participants or persons that
hold through participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Note.
So long as the Depositary for a Global Note, or its nominee, is the owner
of such Global Note, such Depositary or such nominee, as the case may be, will
be considered the sole owner or holder of the Debt Securities represented by
such Global Note for all purposes under the Senior Indenture. Except as set
forth below, owners of beneficial interests in a Global Note will not be
entitled to have Debt Securities of the series represented by such Global Notes
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Senior Indenture.
Accordingly, each person owning a beneficial interest in a Global Note must rely
on the procedures of the Depositary and, if such person is not a participant, on
the procedures of the participant through which such person owns its interest,
to exercise any rights of a Holder under the Senior
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Indenture. The Senior Indenture provides that the Depositary may grant proxies
and otherwise authorize participants to take any action which a Holder is
entitled to take under the Senior Indenture. The Company understands that under
existing industry practice, in the event that the Company requests any action of
Holders or a beneficial owner desires to take any action a Holder is entitled to
take, the Depositary would authorize the participants to take such action and
that the participants would take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of principal, premium, if any, and interest on Debt Securities
registered in the name of or held by a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner or
the holder of the Global Note representing such Debt Securities. None of the
Company, the Trustee, any Paying Agent or the Security Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Note for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium or interest in respect of a
Global Note, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Note as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Global Note held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of such participants.
A Global Note may not be transferred except as a whole by the Depositary
for such Global Note to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary. A Global
Note is exchangeable for Debt Securities registered in the names of persons
other than the Depositary with respect to such Global Note or its nominee only
if (x) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Note or if at any time such Depositary
ceases to be a clearing agency registered under the Exchange Act, (y) the
Company executes and delivers to the Trustee a Company Order that all such
Global Notes shall be exchangeable or (z) there shall have occurred and be
continuing an Event of Default or an event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default with respect to the
Debt Securities. Any Global Note that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Debt Securities registered in such names as
the Depositary with respect to such Global Note shall direct. (Section 305).
Events of Default
The following are Events of Default under each Indenture with respect to
Debt Securities of any series issued thereunder: (a) failure to pay any interest
on any Debt Security of that series when due, continued for 60 days; (b) failure
to pay the principal of (or premium, if any, on) any Debt Security of that
series when due; (c) failure to make sinking fund payments in respect of any
Debt Security of that series when due, continued for 60 days; (d) failure to
perform any other covenant of the Company in the applicable Indenture (other
than a covenant included in such Indenture solely for the benefit of a series of
Debt Securities other than that series), continued for 90 days after written
notice as provided in such Indenture; (e) default by the Company in payment of
any principal of any Funded Debt outstanding in an aggregate principal amount in
excess of $10,000,000 causing such Funded Debt to become, or to be declared, due
prior to its stated maturity and such acceleration is not cured within 30 days
after notice; (f) certain events in bankruptcy, insolvency or reorganization;
and (g) any other Event of Default provided with respect to Debt Securities of
that series. (Section 501) If an Event of Default provided with respect to Debt
Securities of any series at the time Outstanding shall occur and be continuing,
either the applicable Trustee or the Holders of at least 25% in principal amount
of the Outstanding Debt Securities of that series may declare the principal
amount (or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Debt Securities of that series to be due and
payable immediately. However, any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before
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judgment or decree based on such acceleration has been obtained, the Holders of
a majority in principal amount of Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration. (Section
502) For information as to waiver of defaults, see "Modification and Waiver".
Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provision relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
Each of the Indentures provides that, subject to the duties of the
applicable Trustee to act with the required standard of care if an Event of
Default shall occur and be continuing, such Trustee will be under no obligation
to exercise any of its rights or powers under the Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to such
Trustee reasonable security or indemnity. (Section 603) Subject to such
provisions for security or indemnification of the applicable Trustee, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to such Trustee or exercising
any trust or power conferred on such Trustee with respect to the Debt Securities
of that series. (Section 512)
The Company will be required to furnish to each Trustee annually a
statement as to any defaults in the performance of its obligations under the
applicable Indenture. (Section 1006)
Consolidation, Merger and Sale of Assets
The Company, without the consent of any Holders of Outstanding Debt
Securities, may consolidate with or merge into any other person, or convey,
transfer or lease its assets substantially as an entirety to, any Person,
provided that the person formed by such consolidation or into which the Company
is merged or the Person, which acquires by conveyance or transfer or leases the
assets of the Company substantially as an entirety, is organized under the laws
of any United States jurisdiction and assumes the Company's obligations on the
Debt Securities and under the Indentures, that after giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing, and that certain other conditions are met. (Article Eight)
Modification and Waiver
Modification and amendments of each Indenture may be made by the Company
and the applicable Trustee with the consent of the Holders of a majority in
principal amount of the Outstanding Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the Holder of each Outstanding Debt Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debt Security; (b) reduce the principal amount
of, or any premium or interest on, any Debt Security; (c) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof; (d) change the place or currency of payment of principal
of, or premium (if any) or interest on, any Debt Security; (e) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Debt Security; or (f) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of the Holders of which is required
for modification or amendment of the applicable Indenture or for waiver of
compliance with certain provisions of the applicable Indenture or for waiver of
certain defaults. (Section 902)
Without the consent of any Holder of Outstanding Debt Securities, the
Company may amend or supplement each of the Indentures and each series of Debt
Securities to cure any ambiguity or inconsistency or to provide for Debt
Securities in bearer form in addition to or in place of registered Debt
Securities or to make any other provisions that do not adversely affect the
rights of any Holder of Outstanding Debt Securities. (Section 901)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive any past default under the Indenture with respect to that
series, except a default in the payment of the principal of (or premium, if any)
or interest on
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any Debt Security of that series or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of that series affected. (Section 513)
Defeasance
The Indentures provide that the Company may elect to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for the obligations to register the transfer or exchange of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of the Debt Securities
and to hold moneys for payment in trust) ("defeasance"), upon the deposit with
the applicable Trustee (or other qualifying trustee), in trust for such purpose,
of money, and/or U.S. Government Obligations (as defined), which through the
payment of principal and interest in accordance with their terms will provide
money, in an amount sufficient to pay the principal of (and premium, if any) and
interest on such Debt Securities, and any mandatory sinking fund or analogous
payments thereon, on the scheduled due dates therefor. (Article Thirteen)
In the event of a defeasance as provided above with respect to any Debt
Securities, holders of such Debt Securities would be able to look only to the
trust fund established for payments of principal of (and premium, if any) and
interest on such Debt Securities until maturity. Further, under current federal
income tax laws, such a defeasance could be a taxable exchange of such Debt
Securities for interests in the trust. As a consequence, a holder may recognize
gain or loss equal to the difference between the holder's cost or other tax
basis for such Debt Securities and the value of the holder's interest in the
trust, and thereafter may be required to include in income a share of the
income, gain and loss of the trust.
SENIOR INDENTURE PROVISIONS
Limitation on Liens
The Senior Indenture provides that if the Company or any Restricted
Subsidiary shall incur, assume or guarantee any Debt secured by a Mortgage on
any Principal Property, on any shares of stock of any Restricted Subsidiary or
on any Restricted Subsidiary Indebtedness, the Company will secure, or cause
such Restricted Subsidiary to secure, the Senior Securities equally and ratably
with (or prior to) such secured Debt, unless after giving effect thereto the
aggregate amount of all such Debt so secured would not exceed 10% of the
Consolidated Net Tangible Assets of the Company and its Restricted Subsidiaries.
This restriction will not apply to, and there shall be excluded in computing
secured Debt for the purpose of such restriction, Debt secured by (a) Mortgages
existing at the date of the Senior Indenture, (b) Mortgages on property, on
shares of stock or Restricted Subsidiary Indebtedness of any corporation
existing at the time such corporation becomes a Restricted Subsidiary, (c)
Mortgages in favor of the Company or any Restricted Subsidiary, (d) Mortgages on
property, shares of stock, or Restricted Subsidiary Indebtedness existing at the
time of acquisition thereof (including acquisition through merger, consolidation
or other reorganization) and certain purchase money Mortgages and construction
cost Mortgages, (e) certain Mortgages in favor of governmental bodies (including
Mortgages in connection with tax-exempt indebtedness), (f) certain Mortgages to
secure partial, progress, advance or other payments or any Debt incurred to
finance the purchase price or cost of construction, development or repair,
alteration or improvement of property, (g) Mortgages on oil, gas, coal or other
minerals in place or on geothermal resources in place and related interests
incurred to finance production, development or acquisition costs, (h) Mortgages
on certain equipment, (i) Mortgages arising in connection with certain
government contracts and (j) certain extensions, renewals or replacements of any
Debt secured by any Mortgage referred to in the foregoing clauses (a) through
(i), inclusive. (Section 1005) The Senior Indenture will not restrict the
incurrence of unsecured Debt by the Company or its Subsidiaries.
Certain Summary Definitions
"Consolidated Net Tangible Assets" means the aggregate amount of assets of
the Company and its Restricted Subsidiaries after deducting (a) all current
liabilities (excluding any Funded Debt) and (b) all goodwill, trade names and
trademarks, patents, unamortized debt discount and expense and other like
intangibles.
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"Principal Property" means any plant or real property interest located in
the United States or offshore the United States owned by the Company or any
Restricted Subsidiary, the gross book value of which exceeds 2% of Consolidated
Net Tangible Assets, unless the Board of Directors determines such property is
not of material importance to the total business of the Company. As of March 31,
1997, approximately 15% of Consolidated Net Tangible Assets would be within the
definition of Principal Properties.
"Restricted Subsidiary" means a subsidiary of the Company except a
subsidiary (a) which neither transacts any substantial portion of its business
nor regularly maintains any substantial portion of its fixed assets within the
United States or offshore the United States or (b) which is engaged primarily in
financing the operations of the Company or its Subsidiaries, or both.
Regarding the Senior Trustee
The Senior Trustee is an affiliate of the Bank of Montreal ("BOM"). The
Company has a $225,000,000 Revolving Credit Agreement and a $125,000,000 364-Day
Credit Agreement with a group of commercial banks, including BOM. Pursuant to
the terms of the Agreements, BOM has a commitment to loan the Company an
aggregate of $40,000,000.
SUBORDINATED INDENTURE PROVISIONS
Conversion Rights
The Prospectus Supplement will provide whether the Offered Debt Securities
will consist of convertible Subordinated Securities and, if so, the initial
conversion price per share at which such convertible Subordinated Securities
will be convertible into Common Stock. Subject to prior redemption of the
convertible Subordinated Securities, the holders of such Securities will be
entitled at any time on or before the close of business on the maturity date
thereof to convert such Securities (or, in the case of convertible Subordinated
Securities of denominations in excess of $1,000 any portion of which is $1,000
or an integral multiple of $1,000) into shares of Common Stock at the initial
conversion price set forth in the Prospectus Supplement. No adjustment will be
made on conversion of any convertible Subordinated Securities for interest
accrued thereon or, except as set forth below, for dividends on any securities
issued upon such conversion. Certificates for shares of Common Stock issued, on
or prior to the Expiration Date, hereinafter referred to, or Distribution Date,
as defined below under "Rights Agreement", upon conversion of convertible
Subordinated Securities shall also evidence one right (a "Right"), in respect of
each such share, pursuant to the Rights Agreement, dated as of October 4, 1988
(the "Rights Agreement") between the Company and Chemical Bank, as then in
effect. See "Description of Capital Stock, Rights Agreement and Restated
Certificate of Incorporation -- Rights Agreement" for a description of the
Rights and the Rights Agreement. "Expiration Date" means the earlier of (i)
October 20, 1998 or (ii) the redemption of the Rights.
In order to exercise the right of conversion, the Holder of any such
convertible Subordinated Securities must surrender his convertible Subordinated
Securities to the Company at any office or agency of the Company maintained for
such purpose. The convertible Subordinated Securities to be surrendered must be
accompanied by written notice to the Company that the Holder elects to convert
such Securities.
If any convertible Subordinated Security, whether or not called for
redemption, is converted between a record date for the payment of interest and
the next succeeding interest payment date, such Security must be accompanied by
funds payable to the Company equal to the interest payable to the registered
holder on such interest payment date on the principal amount so converted. In
the case of any convertible Subordinated Security or portion thereof called for
redemption, conversion rights expire at the close of business on the Redemption
Date, even if such redemption occurs at a time when conversion of the
Subordinated Security portion thereof is in the best interests of the Holder.
(Sections 1501, 1502 and 1503)
Except where Subordinated Securities surrendered for conversion must be
accompanied by such payment, no interest on converted Subordinated Securities
will be payable by the Company on any interest payment date subsequent to the
date of conversion.
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No fractional shares of Common Stock will be issued upon conversion but, in
lieu thereof, an adjustment in cash will be made based on the market price at
the close of business on the date of conversion. (Section 1503)
The Conversion Price will be subject to adjustment in the event of: (i) the
payment of certain stock dividends on the Common Stock; (ii) the issuance of
certain rights or warrants to all holders of the Common Stock entitling them to
subscribe for or purchase Common Stock at a price less than the market price;
(iii) the subdivision of Common Stock into a greater number of shares of Common
Stock; (iv) the distribution by the Company to all holders of the Common Stock
of evidences of indebtedness or assets of the Company (excluding rights or
warrants and any dividends or distributions mentioned above); and (v) the
reclassification of Common Stock into other securities. (Section 1504) In case
of any consolidation or merger of the Company with or into any other corporation
(other than a consolidation or merger which does not result in any
reclassification, change or conversion of Common Stock), or in case of any sale
or transfer of substantially all the assets of the Company, any Holder of any
Subordinated Securities will be entitled, after the occurrence of any such
event, to receive on conversion the kind and amount of shares of capital stock
and other securities, cash or other property receivable upon such event by a
holder of the number of shares of Common Stock into which such Securities might
have been converted immediately prior to the occurrence of the event. (Section
1511) In addition to the foregoing adjustments, the Company will be permitted to
make such decreases in the Conversion Price as it considers to be necessary in
order that any event treated for federal income tax purposes as a dividend of
stock or stock rights will not be taxable to the holders of Common Stock.
(Section 1504) No adjustment for dividends other than certain stock dividends on
the Common Stock is to be made upon conversion. (Section 1502)
Subordination
The payment of the principal of (and premium, if any) and interest on the
Subordinated Securities is expressly subordinated, to the extent and in the
manner set forth in the Subordinated Indenture, in right of payment to the prior
payment in full of all present and future Senior Indebtedness of the Company.
(Section 1401) In the event of any insolvency or bankruptcy case or proceeding
or any receivership, liquidation, dissolution or other winding up of the
Company, the holders of Senior Indebtedness shall be entitled to receive payment
in full of all amounts due or to become due on or in respect of all Senior
Indebtedness before the Holders of the Subordinated Securities are entitled to
receive any payment on the Subordinated Securities (subject to the power of a
court of competent jurisdiction to make other equitable provision in a lawful
plan of reorganization under applicable bankruptcy laws), except that in any
such case or proceeding the Holders of the Subordinated Securities may be
entitled to receive securities of the Company which are subordinate and subject
to the prior payment in full of all Senior Indebtedness then outstanding. In the
event that the Subordinated Securities are declared due and payable before their
stated maturity because of the occurrence of an Event of Default, the holders of
Senior Indebtedness then outstanding shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior
Indebtedness before the Holders of the Subordinated Securities are entitled to
receive any payment on account of the Subordinated Securities. During the
continuation of any default in the payment of principal of (or premium, if any)
or interest on any Senior Indebtedness beyond any applicable period of grace,
unless and until such default in payment shall have been cured or waived or
shall have ceased to exist, or in the event any judicial proceeding shall be
pending with respect to any such default, no payments may be made on the
Subordinated Securities by the Company. (Article Fourteen) By reason of such
subordination, in the event of insolvency or other specified eventualities, the
Holders of the Subordinated Securities may recover less, ratably, and the
holders of Senior Indebtedness may recover more, ratably, than other creditors
of the Company.
"Senior Indebtedness" means principal of (and premium, if any) and unpaid
interest on (a) indebtedness (secured or unsecured) incurred, assumed or
guaranteed, directly or indirectly, by the Company either before, on or after
the date of the Subordinated Indenture and which is for money borrowed
(including any obligation to pay or reimburse any bank in respect of letter of
credit drawings, payment of drafts or similar transactions), or which is
evidenced by notes, debentures, bonds or other similar securities whether or not
for money borrowed and (b) renewals, extensions or refundings of any such
indebtedness, unless it is provided by the
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instrument creating, evidencing, renewing, extending or refunding the same or
pursuant to which the same is outstanding, that such indebtedness is not senior
in right of payment to the Subordinated Securities. (Section 101)
As of July 3, 1997, the Company had $809,200,000 aggregate principal amount
of Senior Indebtedness outstanding. The Subordinated Indenture does not restrict
the amount of additional Senior Indebtedness which may be incurred by the
Company.
Regarding the Subordinated Trustee
The Company has a $225,000,000 Revolving Credit Agreement and a
$125,000,000 364-Day Credit Agreement with a group of commercial banks,
including the Subordinated Trustee. Pursuant to the terms of the Agreements, the
Subordinated Trustee has a commitment to loan the Company an aggregate of
$40,000,000.
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DESCRIPTION OF CAPITAL STOCK, RIGHTS AGREEMENT AND
RESTATED CERTIFICATE OF INCORPORATION
The following summaries of the Company's Preferred Stock, Common Stock and
the Rights Agreement are qualified in their entirety by reference to the
Restated Certificate of Incorporation of the Company and the Rights Agreement.
The Restated Certificate of Incorporation and the Rights Agreement are filed as
exhibits to the Registration Statement of which this Prospectus is a part.
GENERAL
Under the Company's Restated Certificate of Incorporation, the Company is
authorized to issue (i) 200,000,000 shares of Common Stock, of which 60,618,034
shares were issued and outstanding at March 31, 1997 and (ii) 2,000,000 shares
of Preferred Stock, none of which are issued and outstanding as of the date of
this Prospectus.
COMMON STOCK
Holders of the Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders and are entitled, subject to any
preferential rights of holders of preferred stock, to receive such dividends, if
any, as may be declared from time to time by the Board in its discretion out of
funds legally available therefor. Upon any liquidation or dissolution of the
Company, the holders of the Common Stock are entitled, subject to any
preferential rights of holders of preferred stock, to receive pro rata all
assets remaining available for distribution to stockholders after payment of all
liabilities. The Common Stock has no preemptive or other subscriptive rights,
and there are no conversion rights or redemption or sinking fund provisions with
respect to the Common Stock. The vote of the holders of a majority of the Common
Stock is required for any action by the stockholders of the Company, except as
described under "Restated Certificate of Incorporation" below. The Company's
board of directors is divided into three classes of directors serving staggered
three-year terms. Class I has three directors and Class II and Class III each
have two directors. The Company's Common Stock is listed on the New York Stock
Exchange under the symbol "APC".
PREFERRED STOCK
The Board, without further action by the stockholders, is authorized to
issue shares of preferred stock in one or more series, and to determine
preference as to dividends and in liquidation and voting, conversion, redemption
and other rights more favorable with respect to dividends and liquidation than
those of the holders of the Common Stock. The particular rights, preferences and
privileges of any series of Preferred Stock will be set forth in the Prospectus
Supplement. Such preferences and rights as may be established could have the
effect of impeding the acquisition of control of the Company. No such Preferred
Stock is outstanding as of the date of this Prospectus. Pursuant to the Rights
Agreement the Board has designated the Series A Junior Participating Preferred
Stock. If so specified in the Prospectus Supplement, the Preferred Stock may be
represented by Depositary Shares entitling the holder proportionally to all
rights and preferences of the Preferred Stock.
RIGHTS AGREEMENT
On October 4, 1988, the Board of Directors of the Company adopted the
Rights Agreement and declared a dividend of one Right for each outstanding share
of Common Stock. At the same time, the Board of Directors of the Company
redeemed rights which had been issued pursuant to the rights agreement adopted
on September 10, 1986.
Pursuant to the Rights Agreement, the Company will have outstanding one
Right for each share of Common Stock which is issued and outstanding prior to
the date the Rights become exercisable. Until the Rights become exercisable,
they will be evidenced by certificates for shares of Common Stock and will
automatically trade with such stock. If and when the Rights become exercisable,
Rights certificates will be distributed and the Rights will become separately
transferable.
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Each Right will entitle the registered holder to purchase from the Company
one two-hundredth of a share (a "Unit") of Series A Junior Participating
Preferred Stock of the Company, at a price of $80.00 per Unit (the "Purchase
Price"), subject to adjustment. In general, the Rights become exercisable (and
transferable apart from the Common Stock) on the earlier of (i) ten days
following a public announcement that a person or group (an "Acquiring Person")
has acquired beneficial ownership of 20% or more of the Common Stock (the "Stock
Acquisition Date"), (ii) ten business days following the commencement of an
offer to acquire beneficial ownership of 25% or more of the Common Stock or
(iii) ten days after a person has acquired at least 15% of the Common Stock and
the Company's Board of Directors determines that (x) beneficial ownership by
such person of such shares is intended to cause the Company to repurchase the
Common Stock owned by such person or to pressure the Company into taking action
intended to provide such person with short-term financial gains under
circumstances where the best long-term interests of the Company and its
stockholders would not be served or (y) such person's beneficial ownership of
the Company's Common Stock is causing or reasonably likely to cause a material
adverse impact on the business or prospects of the Company (any such person
being referred to herein as an "Adverse Person"). The date on which the Rights
become exercisable is referred to as the "Distribution Date".
In the event that (i) a Person becomes the beneficial owner of 25% or more
of the then outstanding shares of Common Stock (except pursuant to an offer for
all outstanding shares of Common Stock which a majority of the independent
directors on the Board of Directors determines to be fair to and otherwise in
the best interest of the Company and its stockholders), or (ii) the Board of
Directors determines that a person is an Adverse Person, each holder of a Right
will thereafter have the right to receive, upon exercise, Common Stock (or other
consideration) having a value equal to two times the Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were beneficially owned by any
Acquiring Person or Adverse Person will be null and void. However, Rights are
not exercisable following the occurrence of either of the events set forth above
until such time as the Rights are no longer redeemable by the Company.
In general, in the event that, following the Stock Acquisition Date, (i)
the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (ii) any
Person (other than a Subsidiary of the Company) shall consolidate with, or merge
with or into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock
of such Person having a value equal to two times the Purchase Price of the
Right.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Plan may be amended by the Board of
Directors of the Company prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Plan may be amended by the Board of Directors
in order to cure any ambiguity, to make changes which do not adversely affect
the interests of holders of Rights, or to shorten or lengthen any time period
under the Rights Plan; provided, however, that no amendment to adjust the time
period governing redemption shall be made at such time as the Rights are not
redeemable.
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The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner which causes the Rights to become exercisable for shares of Common
Stock at less than fair market value unless the offer is conditioned on a
substantial number of Rights being acquired. The Rights, however, should not
affect any prospective offeror willing to make an offer at a fair price and
otherwise in the best interests of the Company and its stockholders, as
determined by a majority of the Directors who are not officers of the Company
and who are not affiliated with an Acquiring Person, or willing to negotiate
with the Board of Directors. The Rights should not interfere with any merger or
other business combination approved by the Board of Directors since the Board of
Directors may, at its option, at any time until ten days following the Stock
Acquisition Date redeem all but not less than all the then outstanding Rights at
the Redemption Price.
The Rights will also adversely affect a person who desires to obtain
control of the Company without acquiring 100% ownership and then to engage in
specified self-dealing transactions. The Rights will have no effect, however, on
a person who is willing to acquire control of the Company and wait until the
Rights expire, without engaging in any self-dealing transactions, before
acquiring 100% ownership. The Rights will not affect a transaction approved by
the Board of Directors of the Company prior to the acquisition by any person or
group of 20% of the Common Stock, because the Rights can be redeemed before the
consummation of such transaction.
The Rights will expire at the close of business on October 20, 1998, unless
redeemed earlier by the Company. In general, the Company may redeem the Rights,
at a price of $0.01 per Right, at any time until ten days following the Stock
Acquisition Date, but Rights may not be redeemed if the Board of Directors has
previously declared a person to be an Adverse Person although the redemption
right may be reinstated under certain conditions.
RESTATED CERTIFICATE OF INCORPORATION
The Certificate contains a "fair price" provision, the purpose of which is
to give greater assurance to the holders of the Company's capital stock that
they will receive fair and equitable treatment in the event of certain "Business
Combinations" with an "Interested Stockholder" or certain related parties (or in
which an "Interested Stockholder" or any such related party has an interest
other than proportionately as a stockholder) by requiring that the Business
Combination satisfy certain procedural safeguards, or that the transaction be
approved by the affirmative vote of not less than 80% of all of the capital
stock which by its terms may be voted on all matters submitted to the
stockholders of the Company generally ("Voting Stock").
The term "Interested Stockholder" is defined to include beneficial owners
of 5% or more of the Voting Stock. The term "Business Combination" is defined to
include, among other things, (a) a merger or consolidation of the Company or any
Subsidiary or adoption of a plan of liquidation of the Company, (b) a sale,
other disposition, loan or other arrangement (or a series of such transactions)
involving assets with a Fair Market Value (as defined) of $25,000,000 or more or
constituting more than 5% of total assets or, in the case of capital stock,
stockholders' equity of the entity in question, and (c) any amendment of the
By-Laws of the Company.
In addition to any affirmative stockholder vote otherwise applicable, a
Business Combination with an Interested Stockholder or certain related parties
(or in which an Interested Stockholder or any such related party has an interest
except proportionately as a stockholder) requires (1) the 80% vote referred to
above, (2) approval by a majority of the Continuing Directors (as defined) or
(3) satisfaction of, among others, the following requirements:
(a) The consideration per share to be received in the Business
Combination by stockholders of each class shall be in cash or in the form
used to acquire beneficial ownership of the largest number of shares
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of such class previously acquired by the Interested Stockholder. Such
consideration shall equal at least the highest of:
(i) the highest per share price offered or paid by the Interested
Stockholder for shares of such class within the three-year period prior
to the date of announcement of the Business Combination or in the
transaction in which the Interested Stockholder became such;
(ii) the Fair Market Value per share of such class on the date of
announcement of the Business Combination or the date on which the
Interested Stockholder became such, whichever is higher; or
(iii) the highest preferential amount per share (if any) to which
holders of shares of such class are entitled in the event of a
liquidation, dissolution or winding up of the Company;
(b) After the date on which the Interested Stockholder becomes such,
dividends shall not have been reduced (except as approved by a majority of
the Continuing Directors) and the Interested Stockholder shall not have
acquired additional shares of stock, except in certain limited
circumstances; and
(c) The Interested Stockholder shall not have made any major change in
the Company's business or equity capital structure without the approval of
a majority of the Continuing Directors.
The Certificate further provides that stockholders shall be entitled to
cumulative voting at any time during which there shall be a 30% Stockholder
(defined generally to include any beneficial owner of 30% or more of the Voting
Stock).
The existence of these provisions may make a merger or takeover of the
Company more difficult or discourage a merger or takeover of the Company, or the
acquisition of control of the Company, by another person or entity, and, as a
consequence, will make the removal of incumbent management more difficult.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell offered Securities to or through one or more
underwriters or dealers, and also may sell offered Securities directly to other
purchasers or through agents or through a combination of any such methods of
sale. Any such underwriter or agent involved in the offer and sale of the
offered Securities will be named in the Prospectus Supplement. The distribution
of the offered Securities may be effected from time to time in one or more
transactions at a fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices.
The Company may from time to time authorize underwriters or dealers acting
as the Company's agents to offer and sell the offered Securities upon the terms
and conditions as set forth in any Prospectus Supplement. In connection with the
sale of offered Securities, underwriters or dealers may receive compensation
from the Company or from purchasers of offered Securities for whom they may act
as agents in the form of discounts, concessions or commissions. Underwriters,
dealers and agents that participate in the distribution of offered Securities
may be deemed to be underwriters, and any discounts or commissions received by
them from the Company and any profit on the resale of offered Securities by them
may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933 (the "1933 Act"). Any such person who may be deemed to be an
underwriter will be identified, and any such compensation received from the
Company will be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of offered Securities may
be entitled to indemnification or contribution by the Company against certain
liabilities, including liabilities under the 1933 Act, and to reimbursement by
the Company for certain expenses.
Certain of the underwriters, dealers or agents may engage in transactions
with and perform services for the Company in the ordinary course of business.
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The specific terms and manner of sale of offered Securities are set forth
or summarized in the Prospectus Supplement.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Offered Debt Securities from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases will be
subject to acceptance by the Company. The obligations of any purchaser under any
such contract will be subject to the condition that the purchase of Offered Debt
Securities shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such other
persons will not have any responsibility in respect of the validity or
performance of such contracts.
VALIDITY OF SECURITIES
The validity of the offered Securities will be passed upon for the Company
by Davis Polk & Wardwell and for any underwriters, dealers or agents by Hughes
Hubbard & Reed LLP, New York, New York.
EXPERTS
The consolidated financial statements of Anadarko Petroleum Corporation and
subsidiaries as of December 31, 1996 and 1995 and for each of the years in the
three-year period ended December 31, 1996 incorporated by reference in the
Registration Statement have been incorporated herein in reliance upon the report
of KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
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