<PAGE> 1
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-76127
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 2, 2000
$600,000,000
[ANADARKO LOGO]
Zero Coupon Convertible Debentures due March 2020
------------------
The Debentures are senior unsecured obligations of Anadarko. The Debentures
will mature on March 7, 2020. Anadarko will not pay interest on the Debentures
prior to maturity. The Debentures are convertible at the option of the holder at
any time prior to maturity, unless previously redeemed, into common stock at a
conversion rate of 11.6288 shares of Anadarko common stock per Debenture subject
to adjustments in certain events.
The Debentures are redeemable in whole or in part at the option of Anadarko
after March 7, 2003. A holder has the right to require Anadarko to repurchase a
Debenture at a price per Debenture on March 7, 2003 of $554.41, on March 7, 2008
of $659.44 and on March 7, 2013 of $784.36.
The underwriter has an option to purchase a maximum of $90,000,000
additional principal amount of Debentures to cover any over-allotment of
Debentures.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNT AND PROCEEDS
PUBLIC (1) COMMISSIONS TO ANADARKO
---------- ------------ -----------
<S> <C> <C> <C>
Per Debenture........................................ $499.60 $11.24 $488.36
Total................................................ $299,760,000 $6,744,000 $293,016,000
</TABLE>
(1) Plus accrued value, if any, from March 7, 2000.
Delivery of the Debentures in book-entry form only will be made on or about
March 7, 2000.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
CREDIT SUISSE FIRST BOSTON
The date of this prospectus supplement is March 2, 2000.
<PAGE> 2
USE OF PROCEEDS
Anadarko expects the net proceeds from the sale of the Debentures to be
approximately $292,900,000 after the underwriting discount and commissions and
offering expenses, assuming no exercise of the underwriter's over-allotment
option. The proceeds will be used to pay down floating-rate debt. As of March 2,
2000, the average interest rate on total floating-rate debt, which had original
maturities ranging from overnight to 42 days, was 5.96% per annum.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Some of the statements included or incorporated by reference in the
accompanying prospectus constitute forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements include information
concerning future production and reserves, schedules, plans, timing of
development, contributions from Algerian properties, and those statements
preceded by, followed by or that otherwise include the words "believes",
"expects", "anticipates", "intends", "estimates", "projects", "target", "goal",
"plans", "objective", "should" or similar expressions or variations or such
expressions. For such statements, Anadarko claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Such statements are subject to various risks and
uncertainties, and actual results could differ materially from those expressed
or implied by such statements due to a number of factors in addition to those
discussed in Anadarko's other public filings, press releases and discussions
with Anadarko management, including: volatility of crude oil and natural gas
prices and demand; operating risks associated with the exploration for and
production for oil and gas; uncertainties involved in large development projects
affecting the timing and outcome of such projects; domestic political
developments and federal, state and local laws and regulations; uncertainties
arising out of foreign government sovereignty with respect to Anadarko's
international operations; and the highly competitive nature of Anadarko's
exploration activities and the gathering and marketing of oil and gas
production.
COMMON STOCK PRICE RANGES AND DIVIDENDS
The common stock of Anadarko is traded on the New York Stock Exchange. The
ticker symbol for Anadarko is APC and daily stock reports published in local
newspapers carry trading summaries for Anadarko under the headings ANADRK or
ANADRKPETE.
The following shows information regarding the closing market price of and
dividends paid on Anadarko's common stock by quarter for 1998 and 1999 and for
2000 through March 2.
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
1998
Market Price
High...................................................... $ 34.63 $37.91 $43.19 $40.94
Low....................................................... $ 26.44 $30.31 $28.75 $25.69
Dividends................................................... $0.0375 $ 0.05 $ 0.05 $ 0.05
1999
Market Price
High...................................................... $ 39.88 $40.50 $38.19 $35.44
Low....................................................... $ 26.56 $35.69 $29.00 $27.19
Dividends................................................... $ 0.05 $ 0.05 $ 0.05 $ 0.05
2000 (through March 2)
Market Price
High...................................................... $ 36.44
Low....................................................... $ 28.44
</TABLE>
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<PAGE> 3
In April 1998, the Board of Directors approved a two-for-one stock split.
The stock split was effected by way of a stock dividend. The distribution date
was July 1, 1998, to stockholders of record on June 15, 1998. All amounts shown
above have been restated to reflect the stock split.
Anadarko's Board of Directors has declared a dividend of $0.05 per share
payable March 22, 2000 to holders of record on March 8, 2000.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth Anadarko's consolidated ratios of earnings
to fixed charges and earnings to combined fixed charges and preferred stock
dividends for the periods shown.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to:
Fixed Charges............................................... 1.24 3.34 3.04 0.05 1.77
Combined Fixed Charges and Preferred Stock Dividends........ 1.24 3.34 3.04 0.05 1.53
</TABLE>
Anadarko issued preferred stock in May 1998. No shares of preferred stock
were outstanding during any of the periods prior to May 1998.
As a result of Anadarko's net loss in 1998, Anadarko's earnings did not
cover fixed charges by $90 million and did not cover combined fixed charges and
preferred stock dividends by $101 million in 1998. The ratios were computed by
dividing earnings by either fixed charges or combined fixed charges and
preferred stock dividends. 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. Preferred
stock dividends are adjusted to reflect the amount of pretax earnings required
for payment.
DESCRIPTION OF THE DEBENTURES
GENERAL
The Debentures will be issued under the senior indenture referred to in the
accompanying prospectus, as supplemented as of March 7, 2000. The Debentures are
offered and sold at a discount from their value at maturity. Anadarko initially
issued the Debentures at a price of $499.60 per Debenture. Over time, the amount
payable on each Debenture will increase in value until it reaches its maturity
value of $1,000 on March 7, 2020. The Debentures will be issued only in
denominations of $1,000 and integral multiples of $1,000.
You have the option to convert your Debentures into Anadarko common stock
at any time prior to maturity, unless the Debentures have been previously
redeemed or purchased. The conversion rate is 11.6288 shares of common stock per
Debenture. The conversion rate is subject to adjustment if certain events occur.
Upon conversion, you will receive only common stock. You will not receive any
cash payment for the accrued original issue discount to the conversion date.
REDEMPTION RIGHTS
After March 7, 2003, Anadarko can redeem all or part of the Debentures at
any time, upon not less than 15 nor more than 60 days' notice by mail to holders
of Debentures, for a price equal to $499.60 per Debenture plus accrued original
issue discount at a rate of 3.50% per annum compounded semi-annually to the date
of redemption, on the basis of a 360 day year consisting of
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twelve 30-day months. Anadarko can also convert the Debentures to
interest-bearing debentures upon the occurrence of certain tax events described
below.
The table below shows redemption prices of Debentures at March 7, 2003, at
each following March 7 prior to maturity, and at maturity on March 7, 2020. The
prices reflect the accrued original issue discount calculated through each date.
The redemption price of a Debenture redeemed between these dates would include
an additional amount reflecting the additional original issue discount accrued
since the immediately preceding date in the table to the actual redemption date.
<TABLE>
<CAPTION>
(1) (2) (3)
----------- ---------------- ----------
DEBENTURE ACCRUED ORIGINAL REDEMPTION
----------- ---------------- ----------
ISSUE PRICE ISSUE DISCOUNT PRICE
----------- ---------------- ----------
REDEMPTION DATE AT 3.50% (1) + (2)
--------------- ---------------- ----------
<S> <C> <C> <C>
March 7, 2003............................... $499.60 $ 54.81 $ 554.41
March 7, 2004............................... 499.60 74.38 573.98
March 7, 2005............................... 499.60 94.65 594.25
March 7, 2006............................... 499.60 115.63 615.23
March 7, 2007............................... 499.60 137.35 636.95
March 7, 2008............................... 499.60 159.84 659.44
March 7, 2009............................... 499.60 183.12 682.72
March 7, 2010............................... 499.60 207.22 706.82
March 7, 2011............................... 499.60 232.18 731.78
March 7, 2012............................... 499.60 258.02 757.62
March 7, 2013............................... 499.60 284.76 784.36
March 7, 2014............................... 499.60 312.46 812.06
March 7, 2015............................... 499.60 341.13 840.73
March 7, 2016............................... 499.60 370.81 870.41
March 7, 2017............................... 499.60 401.54 901.14
March 7, 2018............................... 499.60 433.36 932.96
March 7, 2019............................... 499.60 466.30 965.90
At stated maturity.......................... 499.60 500.40 1,000.00
</TABLE>
From and after the date a tax event occurs and Anadarko elects to pay
interest at 3.50% per year on the Debentures instead of accruing original issue
discount, the principal amount for redemption will be restated, and will be
calculated by adding the issue price and the original issue discount which had
accrued up until the date on which Anadarko exercises the option.
If Anadarko decides to redeem less than all of the outstanding Debentures,
the trustee will select the Debentures to be redeemed by the following methods:
- by lot;
- pro rata; or
- by another method the trustee considers fair and appropriate.
If the trustee selects a portion of your Debentures for partial redemption
and you convert a portion of the same Debentures, the converted portion will be
deemed to be from the portion selected for redemption. Each Debenture will be
redeemed in whole.
INTEREST
Anadarko will not pay cash interest on the Debentures unless it elects to
do so following a tax event. You should be aware that accrued original issue
discount must be included in your gross
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income for federal income tax purposes. Original issue discount is the
difference between the issue price of $499.60 and the $1,000 redemption price of
the Debenture at maturity.
CONVERSION RIGHTS
You have the right to convert the Debentures into common stock. You may
convert a Debenture into shares of common stock at any time until the close of
business on the last business day prior to March 7, 2020. If a Debenture has
been called for redemption, you will be entitled to convert the Debenture until
the close of business on the business day immediately preceding the date of
redemption. You may convert Debentures in part so long as the part is an
integral multiple of $1,000 principal amount.
The initial conversion rate is 11.6288 shares of common stock for each
Debenture. You will not receive any cash payment representing accrued original
issue discount upon conversion of a Debenture. Instead, upon conversion Anadarko
will deliver to you a fixed number of shares of common stock and any cash
payment to account for fractional shares. The cash payment for fractional shares
will be based on the closing price of the common stock on the trading day
immediately prior to the conversion date. Delivery of common stock will be
deemed to satisfy Anadarko's obligation to pay the principal amount of the
Debenture and accrued original issue discount. Accrued original issue discount
will be deemed paid in full rather than canceled, extinguished or forfeited.
Anadarko will not adjust the conversion ratio to account for the accrued
original issue discount.
The conversion rate will be subject to adjustment upon the following
events:
- issuance of shares of common stock as a dividend or distribution on the
common stock;
- subdivision or combination of the outstanding common stock;
- issuance to all common stockholders of rights or warrants that allow the
holders to purchase common stock at less than the current market price;
- distribution to all common stockholders of debt or other assets but
excluding all cash distributions and rights and warrants described above;
- the distribution to all or substantially all common stockholders of
all-cash distributions in an aggregate amount that together with (A) any
cash and the fair market value of any other consideration payable in
respect of any tender offer by Anadarko or any of Anadarko's subsidiaries
for common stock consummated within the preceding 12 months not
triggering a conversion price adjustment and (B) all other all-cash
distributions to all or substantially all common stockholders made within
the preceding 12 months not triggering a conversion price adjustment
exceeds an amount equal to 10% of Anadarko's market capitalization on the
business day immediately preceding the day on which Anadarko declares
such distribution; and
- the purchase of common stock pursuant to a tender offer made by Anadarko
or any of Anadarko's subsidiaries to the extent that the same involves
aggregate consideration that together with (A) any cash and the fair
market value of any other consideration payable in respect of any tender
offer by Anadarko or any of Anadarko's subsidiaries for common stock
consummated within the preceding 12 months not triggering a conversion
price adjustment and (B) all-cash distributions to all or substantially
all common stockholders made within the preceding 12 months not
triggering a conversion price adjustment exceeds an amount equal to 10%
of Anadarko's market capitalization on the expiration date of such tender
offer.
Anadarko may increase the conversion rate as permitted by law for at least
20 days, so long as the increase is irrevocable during the period. Anadarko is
not required to adjust the conversion rate until adjustments greater than 1%
have occurred.
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<PAGE> 6
If you submit your Debentures for conversion after Anadarko has elected to
exercise its option to pay interest instead of accruing original issue discount
between a record date and the opening of business on the next interest payment
date (except for Debentures or portions of Debentures called for redemption on a
redemption date occurring during the period from the close of business on a
record date and ending on the opening of business on the first business day
after the next interest payment date, or if this interest payment date is not a
business day, the second business day after the interest payment date), you must
pay funds equal to the interest payable on the converted principal amount.
REPURCHASE RIGHT
You have the right to require Anadarko to repurchase the Debentures on
March 7, 2003, March 7, 2008 and March 7, 2013. Anadarko will be required to
repurchase any outstanding Debenture for which you deliver a written repurchase
notice to the paying agent. This notice must be delivered during the period
beginning at any time from the opening of business on the date that is 20
business days prior to the repurchase date until the close of business on the
repurchase date. If the repurchase notice is given and withdrawn during the
period, Anadarko will not be obligated to repurchase the related Debentures.
Anadarko's repurchase obligation will be subject to certain additional
conditions.
Your repurchase notice must state:
(1) the Debenture certificate numbers;
(2) the portion of the principal amount at maturity of Debentures to be
purchased, in multiples of $1,000;
(3) that the Debentures are to be purchased by us pursuant to the
Debentures.
You may withdraw any repurchase notice by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the repurchase
date. The notice of withdrawal must state:
- the principal amount at maturity;
- the certificate numbers of the withdrawn debentures; and
- the principal amount at maturity, if any, which remains subject to the
repurchase notice.
The repurchase price payable will be equal to the issue price plus accrued
original issue discount through the repurchase date. The table below shows the
repurchase prices of a Debenture as of each of the repurchase dates.
<TABLE>
<CAPTION>
REPURCHASE
REPURCHASE DATE PRICE
--------------- ----------
<S> <C>
March 7, 2003............................................... $554.41
March 7, 2008............................................... $659.44
March 7, 2013............................................... $784.36
</TABLE>
If Anadarko has previously exercised its option to pay interest instead of
accruing original issue discount on the Debentures following a tax event, the
repurchase price will be equal to the restated principal amount plus the accrued
and unpaid interest that accrued from the date Anadarko exercised its option.
See Tax Events.
Anadarko's ability to repurchase Debentures with cash may be limited by the
terms of its then existing borrowing agreements. Anadarko may not repurchase
Debentures for cash at the option of holders exercising their right of
repurchase if an event of default has occurred and is continuing, except a
default in the payment of the repurchase price with respect to the Debentures.
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<PAGE> 7
A holder must either effect book-entry transfer or deliver the Debenture,
together with necessary endorsements, to the office of the paying agent after
delivery of the repurchase notice to receive payment of the repurchase price.
You will receive payment in cash on the repurchase date or the time of
book-entry transfer or the delivery of the Debenture. If the paying agent holds
money or securities sufficient to pay the repurchase price of the Debenture on
the business day following the repurchase date, then:
- the debenture will cease to be outstanding;
- original issue discount will cease to accrue; and
- all other rights of the holder will terminate.
This will be the case whether or not book-entry transfer of the Debenture
is made or whether or not the Debenture is delivered to the paying agent.
Anadarko will comply with the provisions of Rule 13e-4 and any other tender
offer rules under the Securities Exchange Act which may be applicable at the
time. Anadarko will file Schedule 13e-4 or any other schedule required in
connection with any offer by it to repurchase the Debentures at your option.
TAX EVENTS
Anadarko has the option to convert the Debentures to interest-bearing
debentures on a tax event. From and after the date a tax event occurs, Anadarko
may elect to pay interest at 3.50% per year on the Debentures instead of
accruing original issue discount. The principal amount, which will be restated,
will be calculated by adding the issue price and the original discount which had
accrued up until the date on which Anadarko exercises the option. This restated
principal amount will be the amount due at maturity. If Anadarko elects this
option, interest will be based on a 360-day year comprised of twelve 30-day
months. Interest will accrue from the option exercise date and will be payable
semi-annually on March 15 to holders of record on the immediately preceding
March 1 and on September 15 to holders of record on the immediately preceding
September 1.
A tax event occurs when Anadarko receives an opinion from an experienced
independent tax counsel stating that:
- any amendment, or change or announced prospective change in the laws or
regulations of the United States or any of its political subdivisions or
taxing authorities of the United States, or
- any amendment, change, interpretation or application of the laws or
regulations by any legislative body, court, government agency or
regulatory authority,
which, if enacted, presents more than an insubstantial risk that interest,
including original issue discount, payable on the Debentures either;
- would not be deductible on a current accrual basis, or
- would not be deductible under any other method,
in whole or in part, by Anadarko for United States federal income tax purposes.
The modification of the terms of the Debentures by Anadarko upon a tax
event as described above could alter the timing of income recognition by certain
holders of the Debentures.
AMOUNT PAYABLE ON ACCELERATION
If there is an Event of Default, the trustee or the holders of at least 25%
in principal amount of the Debentures then outstanding may declare the issue
price plus accrued original issue discount
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on the outstanding Debentures immediately due and payable. If Anadarko exercises
its option to pay interest instead of accruing original issue discount on the
Debentures following a tax event, the declaration of acceleration referred to
above will make the restated principal amount plus accrued and unpaid interest
immediately payable.
CHANGE OF CONTROL
If Anadarko undergoes a change in control, you will have the option to
require Anadarko to purchase your Debentures 30 business days after the change
in control. Anadarko will pay a purchase price equal to the issue price plus
accrued original issue discount through the purchase date. You may require
Anadarko to purchase all or any part of the Debentures so long as the principal
amount at maturity of the Debentures being purchased is an integral multiple of
$1,000.
A change in control occurs in the following situations:
- any person or group becomes the beneficial owner of Anadarko's shares of
voting stock representing 50% or more of the total voting power of all
outstanding classes of Anadarko's voting stock or has the power, directly
or indirectly, to elect a majority of the members of Anadarko's board of
directors;
- Anadarko consolidates or merges with another person, Anadarko sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets, or any person consolidates with or
merges with Anadarko but these circumstances will not be a change in
control if the persons that beneficially own shares of Anadarko voting
stock immediately prior to a transaction beneficially own shares with a
majority of the total voting power of all outstanding classes of voting
stock of the surviving or transferee person; or
- Anadarko liquidates or dissolves its business.
You must deliver a written notice to the paying agent prior to the close of
business on the business day prior to the date on which the Debentures are to be
purchased to exercise the repurchase right upon a change in control. This notice
must specify the Debentures submitted for repurchase. You may withdraw the
notice by delivering a written notice of withdrawal to the paying agent before
the same date.
Within ten business days after a change in control, Anadarko will publish
and mail to the trustee and to each holder of the Debentures a written notice of
the change in control which specifies the terms and conditions and the
procedures required for exercise of a holder's right to require Anadarko to
purchase your Debentures.
If Anadarko had previously exercised its option to pay interest instead of
accruing original issue discount on the Debentures following a tax event,
Anadarko will purchase the Debentures at a cash price equal to the restated
principal amount plus accrued and unpaid interest which had accrued from the
date Anadarko exercised its option. See Tax Events.
For purposes of defining a change of control:
- the term person and the term group have the meanings given by Sections
13(d) and 14(d) of the Securities Exchange Act or any successor
provisions;
- the term group includes any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Securities Exchange Act or any successor provision;
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- the term beneficial owner is determined in accordance with Rule 13d-3
under the Securities Exchange Act, as in effect on March 7, 2000;
- the term beneficially owned means that which is owned by a beneficial
owner; and
- the term unissued shares means shares of voting stock not outstanding
that are subject to options, warrants, rights to purchase or conversion
privileges exercisable within 60 days of the date of a change in control.
BOOK-ENTRY SYSTEM
The Debentures will be represented by one or more Global Securities (each a
"Global Security"). Each Global Security will be deposited with, or on behalf
of, The Depository Trust Company ("DTC") and be registered in the name of a
nominee of DTC. Except under circumstances described below, the Debentures will
not be issued in definitive form.
Upon the issuance of a Global Security, DTC will credit on its book-entry
registration and transfer system the accounts of persons designated by the
underwriter with the respective principal amounts of the Debentures represented
by the Global Security. Ownership of beneficial interests in a Global Security
will be limited to persons that have accounts with DTC or its nominee
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in a Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
DTC or its nominee (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 Security.
So long as DTC or its nominee is the registered owner of a Global Security,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the Debentures represented by that Global Security for all purposes
under the Senior Indenture. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Debentures
represented by that Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debentures in definitive form and
will not be considered the owners or holders thereof under the Senior Indenture.
Principal and interest payments, if any, on Debentures registered in the
name of DTC or its nominee will be made to DTC or its nominee, as the case may
be, as the registered owner of the relevant Global Security. Neither Anadarko,
the Senior Trustee, any paying agent or the registrar for the Debentures will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial interests in a Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Anadarko expects that DTC or its nominee, upon receipt of any payment of
principal or interest, if any, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of the relevant Global Security as shown on the records
of DTC or its nominee. Anadarko also expects that payments by participants to
owners of beneficial interests in a Global Security held through such
participants will be governed by standing instructions and customary practices,
as is 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.
If DTC is at any time unwilling or unable to continue as a depositary and a
successor depositary is not appointed by Anadarko within 90 days, Anadarko will
issue Debentures in definitive form in exchange for the entire Global Security
for the Debentures. In addition, Anadarko may at any time and in its sole
discretion determine not to have Debentures represented by a Global Security
and, in such event, will issue Debentures in definitive form in exchange for the
entire Global Security relating to such Debentures. In any such instance, an
owner of a
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beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Debentures represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debentures
registered in its name. Debentures so issued in definitive form will be issued
as registered Debentures in denominations of $1,000 and integral multiples
thereof, unless otherwise specified by Anadarko.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax
considerations relating to the purchase, ownership and disposition of the
Debentures to initial purchasers of the Debentures who are U.S. holders (as
described below), and the material U.S. federal income and estate tax
consequences relating to the purchase, ownership and disposition of the
Debentures to initial purchasers who are non-U.S. holders (as described below).
It does not contain a complete analysis of all the potential tax considerations
relating thereto. In particular, this discussion does not address all tax
considerations that may be important to you in light of your particular
circumstances (such as the alternative minimum tax provisions) or under certain
special rules. Special rules may apply, for instance, to banks, tax-exempt
organizations, dealers in securities, persons who hold Debentures or common
stock as part of a hedge, conversion or constructive sale transaction, or
straddle or other risk reduction transaction, or to persons who have ceased to
be United States citizens or to be taxed as resident aliens. This discussion is
limited to holders of Debentures who purchase the Debentures at their "issue
price" and hold the Debentures and any common stock into which the Debentures
are converted as capital assets. For this purpose only, the "issue price" of the
Debentures is the first price at which a substantial portion of the Debentures
is sold to the public (not including sales to underwriters or placement agents).
This discussion also does not address the tax consequences arising under the
laws of any foreign, state or local jurisdiction.
This discussion is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), existing and proposed Treasury Regulations, and judicial decisions
and administrative interpretations thereunder, as of the date hereof, all of
which are subject to change or different interpretations, possibly with
retroactive effect. We cannot assure you that the Internal Revenue Service (the
"IRS") will not challenge one or more of the tax results described herein, and
Anadarko has not obtained, nor does it intend to obtain, a ruling from the IRS
with respect to the U.S. federal tax consequences of acquiring, holding or
disposing of the Debentures or common stock.
PLEASE CONSULT YOUR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES
TO YOU OF ACQUIRING, HOLDING, CONVERTING OR OTHERWISE DISPOSING OF THE
DEBENTURES AND COMMON STOCK, INCLUDING THE EFFECT AND APPLICABILITY OF STATE,
LOCAL OR FOREIGN TAX LAWS.
U.S. HOLDERS
You are a U.S. holder for purposes of this discussion if you are a holder
of a Debenture or common stock that is, for U.S. federal income tax law
purposes:
- a citizen or resident of the United States;
- a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof; or
- an estate or trust the income of which is subject to United States
federal income taxation regardless of its source.
Original Issue Discount on the Debentures. The Debentures are being issued
at a substantial discount from their principal amount. For federal income tax
purposes, the excess of the principal amount of each Debenture over its issue
price constitutes original issue discount ("OID"). You will
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be required to include OID in income as it accrues, in accordance with a
constant yield method, before receipt of the cash or stock attributable to such
income, regardless of your regular method of accounting for U.S. federal income
tax purposes. Under these rules, you will have to include in gross income
increasingly greater amounts of OID in each successive accrual period. Your
original tax basis for determining gain or loss on the sale or other disposition
of a Debenture will be increased by any accrued OID included in your gross
income.
Sale, Exchange or Retirement of the Debentures. Upon the sale, exchange or
retirement of a Debenture, you will recognize gain or loss equal to the
difference between the sale or redemption proceeds (other than in respect of
accrued OID not previously included in income, which will be taxable as ordinary
income) and your adjusted tax basis in the Debenture. Your adjusted tax basis in
a Debenture will generally equal your cost of the Debenture increased by any OID
previously included in income with respect to such Debenture. Gain or loss
realized on the sale, exchange or retirement of a Debenture will generally be
capital gain or loss and will be long-term capital gain or loss if the Debenture
is held for more than one year. You should consult your tax advisors regarding
the treatment of capital gains (which may be taxed at lower rates than ordinary
income for certain taxpayers who are individuals) and losses (the deductibility
of which is subject to limitations). Anadarko's election to pay interest on the
Debentures instead of accruing original issue discount will not constitute a
taxable exchange of the Debentures to the holders.
Conversion of Debentures. The conversion of a Debenture into common stock
will generally not be a taxable event (except to the extent the common stock is
considered attributable to OID not previously included in income (which is
taxable as ordinary income), or with respect to cash received in lieu of a
fractional share). Your basis in the common stock received on conversion of a
Debenture will be the same as your basis in the Debenture at the time of
conversion (exclusive of any tax basis allocable to a fractional share), and
your holding period for the common stock received on conversion should include
the holding period of the Debenture converted, unless the conversion is treated
as a recapitalization (in which case the holding period of a fractional interest
in each share will commence on the date of conversion). The receipt of cash in
lieu of a fractional share of common stock should generally result in capital
gain or loss (measured by the difference between the cash received for the
fractional share interest and your tax basis in the fractional share interest).
Adjustment of Conversion Rate. If at any time Anadarko makes a distribution
of property to shareholders that would be taxable to such shareholders as a
dividend for federal income tax purposes (for example, distributions of
evidences of indebtedness or assets of Anadarko, but generally not stock
dividends or rights to subscribe for common stock) and, pursuant to the anti-
dilution provisions of the Indenture, the conversion rate of the Debentures is
increased, such increase may be deemed to be the payment of a taxable dividend
to you. If the conversion rate is increased at the discretion of Anadarko or in
certain other circumstances, such increase also may be deemed to be the payment
of a taxable dividend to you.
Ownership and Disposition of Common Stock. Dividends, if any, paid on the
common stock generally will be includable in your income as ordinary income to
the extent of your ratable share of Anadarko's current or accumulated earnings
and profits. Upon the sale, exchange or other disposition of common stock, you
generally will recognize capital gain or capital loss equal to the difference
between the amount realized on such sale or exchange and your adjusted tax basis
in such shares. You should consult your tax advisors regarding the treatment of
capital gains (which may be taxed at lower rates than ordinary income for
taxpayers who are individuals) and losses (the deductibility of which is subject
to limitations).
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NON-U.S. HOLDERS
You are a Non-U.S. holder for purposes of this discussion if you are a
holder of a Debenture or common stock that is, for U.S. federal income tax law
purposes:
- a nonresident alien individual;
- a foreign corporation;
- a nonresident alien fiduciary of a foreign estate or trust; or
- a foreign partnership one or more of the members of which is a
nonresident alien individual, a foreign corporation or a nonresident
alien fiduciary of a foreign estate or trust.
Withholding Tax on Payments of Principal and Original Issue Discount on
Debentures. The payment of principal (including any OID included therein) on a
Debenture by Anadarko or any paying agent of Anadarko to you will not be subject
to United States federal withholding tax, provided that in the case of payment
in respect of OID:
- you do not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of Anadarko;
- you are not a controlled foreign corporation that is related to Anadarko
within the meaning of the Code; and
- either (A) the beneficial owner of the Debenture certifies to the
applicable payor or its agent, under penalties of perjury, that it is not
a U.S. holder and provides its name and address on United States Treasury
Form W-8 (or a suitable substitute form), or (B) a securities clearing
organization, bank or other financial institution, that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") and holds the Debenture, certifies under penalties of
perjury that such a Form W-8 (or suitable substitute form) has been
received from the beneficial owner by it or by a financial institution
between it and the beneficial owner and furnishes the payor with a copy
thereof.
Except to the extent otherwise provided under an applicable tax treaty, you
generally will be taxed in the same manner as a U.S. holder with respect to OID
on a Debenture if such OID is effectively connected with a U.S. trade or
business of yours. Effectively connected OID received by a corporate Non-U.S.
holder may also, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate (or, if applicable, a lower treaty rate),
subject to certain adjustments. Such effectively connected OID will not be
subject to withholding tax if the holder delivers the appropriate form
(currently IRS Form 4224 and, beginning January 1, 2001, a Form W-8) to the
payor.
Dividends. Dividends, if any, paid on the common stock to you (and, after
December 31, 2000, any deemed dividends resulting from an adjustment to the
Conversion Rate (see "Adjustment of Conversion Rate" above)) generally will be
subject to a 30% United States federal withholding tax, subject to reduction if
you are eligible for the benefits of an applicable income tax treaty. Currently,
for purposes of determining whether tax is to be withheld at the 30% rate or at
a reduced treaty rate, Anadarko will ordinarily presume that dividends paid to
an address in a foreign country are paid to a resident of such country absent
knowledge that such presumption is not warranted. Under Treasury Regulations
effective for payments after December 31, 2000, holders will be required to
satisfy certain applicable certification requirements to claim treaty benefits.
Except to the extent otherwise provided under an applicable tax treaty, you
generally will be taxed in the same manner as a U.S. holder on dividends paid
(or deemed paid) that are effectively connected with your conduct of a trade or
business in the United States. If you are a foreign corporation, you may also be
subject to a United States branch profits tax on such effectively connected
income at a
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30% rate or such lower rate as may be specified by an applicable income tax
treaty, subject to certain adjustments.
Gain on Disposition of the Debentures and Common Stock. Subject to the
discussion of the "FIRPTA" rules below, you generally will not be subject to
United States federal income tax on gain realized on the sale, exchange or
redemption of a Debenture, including the exchange of a Debenture for common
stock, or the sale or exchange of common stock unless:
- you are an individual present in the United States for 183 days or more
in the year of such sale, exchange or redemption and either (A) you have
a "tax home" in the United States and certain other requirements are met,
or (B) the gain from the disposition is attributable to an office or
other fixed place of business in the United States;
- the gain is effectively connected with your conduct of a United States
trade or business; or
- in the case of the disposition of the Debentures or the common stock,
Anadarko is a U.S. real property holding corporation under the "FIRPTA"
rules adopted in 1980.
Generally, a corporation is a U.S. real property holding corporation if the
fair market value of its U.S. real property interests, as defined in the Code
and applicable regulations, equals or exceeds 50% of the aggregate fair market
value of its worldwide real property interests and its other assets used or held
for use in a trade or business. Anadarko may now be, or may prior to your
disposition of common stock become, a U.S. real property holding corporation. If
Anadarko determines that it is a U.S. real property holding corporation, upon
conversion or redemption of any Debenture Anadarko may withhold 10% of cash,
common stock or other property that would otherwise be received by a holder
unless the holder complies with certain certification requirements. In addition,
if Anadarko is a U.S. real property holding corporation, then under certain
circumstances you may be subject to U.S. income tax on gain realized and to
withholding at the rate of 10% upon any sale or other disposition of Debentures
or common stock. You should consult your tax advisors as to the application of
these rules, especially if you hold or plan to acquire a substantial interest in
the Debentures, common stock, or any other class of Anadarko's securities (or a
combination thereof).
U.S. Federal Estate Tax. A Debenture held by an individual who at the time
of death is not a citizen or resident of the United States (as specially defined
for United States federal estate tax purposes) will not be subject to United
States federal estate tax if the individual did not actually or constructively
own 10% or more of the total combined voting power of all classes of stock of
Anadarko and, at the time of the individual's death, payments with respect to
such Debenture would not have been effectively connected with the conduct by
such individual of a trade or business in the United States. Common stock held
by an individual who at the time of death is not a citizen or resident of the
United States (as specially defined for United States federal estate tax
purposes) will be included in such individual's estate for U.S. federal estate
tax purposes, unless an applicable estate tax treaty otherwise applies.
BACKUP WITHHOLDING AND INFORMATION REPORTING
U.S. Holders. Information reporting will apply to payments of interest or
dividends made by Anadarko on, or the proceeds of the sale or other disposition
of, the Debentures or shares of common stock with respect to certain
noncorporate U.S. holders, and backup withholding at a rate of 31% may apply
unless the recipient of such payment supplies a taxpayer identification number,
certified under penalties of perjury, as well as certain other information or
otherwise establishes an exemption from backup withholding. Any amount withheld
under the backup withholding rules is allowable as a credit against the U.S.
holder's federal income tax, provided that the required information is provided
to the IRS.
Non-U.S. Holders. Anadarko must report annually to the IRS and to each
Non-U.S. holder the amount of any dividends paid to, and the tax withheld with
respect to, such holder, regardless of
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whether any tax was actually withheld. Copies of these information returns may
also be made available under the provisions of a specific treaty or agreement to
the tax authorities of the country in which the Non-U.S. holder resides.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments of principal, including cash payments in
respect of OID, on the Debentures by Anadarko or any agent thereof to a Non-U.S.
holder if the Non-U.S. holder certifies as to its Non-U.S. holder status under
penalties of perjury or otherwise establishes an exemption (provided that
neither Anadarko nor its agent has actual knowledge that the holder is a U.S.
person or that the conditions of any other exemptions are not in fact
satisfied). The payment of the proceeds on the disposition of Debentures or
shares of common stock to or through the United States office of a United States
or foreign broker will be subject to information reporting and backup
withholding unless the owner provides the certification described above or
otherwise establishes an exemption. The proceeds of the disposition by a
Non-U.S. holder of Debentures or shares of common stock to or through a foreign
office of a broker will not be subject to backup withholding or information
reporting. However, if such broker is a U.S. person, a controlled foreign
corporation for United States tax purposes, a foreign person, 50% or more of
whose gross income from all sources for certain periods is from activities that
are effectively connected with a U.S. trade or business, or, in the case of
payments made after December 31, 2000, a foreign partnership with certain
connections to the United States, information reporting requirements will apply
unless such broker has documentary evidence in its files of the holder's
Non-U.S. status and has no actual knowledge to the contrary or unless the holder
otherwise establishes an exemption. Any amount withheld under the backup
withholding rules is allowable as a credit against the Non-U.S. holder's federal
income tax, provided that the required information is provided to the IRS.
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement with respect to the Debentures, Anadarko has agreed to sell to Credit
Suisse First Boston Corporation all of the Zero Coupon Convertible Debentures
due March 2020.
The underwriting agreement provides that the underwriter is obligated to
purchase all of the Debentures if any are purchased other than those Debentures
covered by the over-allotment option described below.
Anadarko has granted to the underwriter a 30-day option to purchase up to
$90,000,000 additional principal amount of Debentures at the initial public
offering price less the underwriting discounts and commissions. The option may
be exercised only to cover any over-allotments in the sale of the Debentures.
Anadarko estimates that its out of pocket expenses for this offering will
be approximately $100,000.
The underwriter proposes to offer the Debentures initially at the public
offering price on the cover page of this prospectus supplement and to selling
group members at that price less a concession of $6.74 per Debenture.
The Debentures are a new issue of securities with no established trading
market. The underwriter intends to make a secondary market for the Debentures.
However, it is not obligated to do so and may discontinue making a secondary
market for the Debentures at any time without notice. No assurance can be given
as to how liquid the trading market for the Debentures will be.
Anadarko has agreed to indemnify the underwriter against liabilities under
the Securities Act, or contribute to payments which the underwriter may be
required to make in respect thereof.
The underwriter may engage in over-allotment and stabilizing transactions
in accordance with Regulation M under the Securities Exchange Act of 1934.
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- Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position.
- Stabilizing transactions permit bids to purchase the securities or the
underlying common stock so long as the stabilizing bids do not exceed a
specified maximum.
Such stabilizing transactions may cause the price of the Debentures to be
higher than it would otherwise be in the absence of such transactions. These
transactions, if commenced, may be discontinued at any time.
From time to time Credit Suisse First Boston Corporation provides
investment banking and financial advisory services to Anadarko for which it
receives customary fees.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Debentures in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of Debentures are effected. Accordingly, any resale of the Debentures in
Canada must be made in accordance with applicable securities laws which will
vary depending on the relevant jurisdictions, and which may require resales to
be made in accordance with available statutory exemptions or pursuant to a
discretionary exemption granted by the applicable Canadian securities regulatory
authority. Purchasers are advised to seek legal advice prior to any resale of
the Debentures.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Debentures in Canada who receives a purchase confirmation
will be deemed to represent to us and the dealer from whom such purchase
confirmation is received that (i) such purchaser is entitled under applicable
provincial securities laws to purchase such Debentures without the benefit of a
prospectus qualified under such securities laws, (ii) where required by law,
that such purchaser is purchasing as principal and not as agent, and (iii) such
purchaser has reviewed the text above under "Resale Restrictions".
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Debentures to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report
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within ten days of the sale of any Debentures acquired by such purchasers
pursuant to this offering. Such report must be in the form attached to British
Columbia Securities Commission Blanket Order BOR #95/17, a copy of which may be
obtained from us. Only one such report must be filed in respect of Debentures
acquired on the same date and under the same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of Debentures should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the Debentures
in their particular circumstances and with respect to the eligibility of the
Debentures for investment by the purchaser under relevant Canadian legislation.
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PROSPECTUS
[ANADARKO LOGO]
$1,000,000,000
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
------------------------
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------------
This prospectus is dated March 2, 2000
<PAGE> 18
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf " registration process.
Under this shelf process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $1,000,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the additional
information described under the heading "Where You Can Find More Information
About Anadarko".
ANADARKO PETROLEUM CORPORATION
Anadarko is one of the world's largest independent oil and gas exploration
and production companies with 935.1 million energy equivalent barrels of proved
reserves as of December 31, 1998.
Anadarko's reserve mix shifted in 1998, primarily due to recent discoveries
in the Gulf of Mexico's sub-salt trend and continued development activity
onshore in the U.S., which resulted in a significant increase in natural gas
reserves. As of year-end 1998, natural gas reserves accounted for 47% of
Anadarko's total proved reserves compared to 41% at year-end 1997.
About 74% of Anadarko's total 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. During 1998, 97% of Anadarko's production was
located in the U.S. Anadarko also owns and operates gas gathering systems in its
U.S. core producing areas.
Overseas, Anadarko is developing crude oil reserves in Algeria's Sahara
Desert and has commenced oil production. At year-end 1998, Anadarko had 245
million barrels of proved crude oil reserves in Algeria, which accounts for 26%
of Anadarko's total proved reserves. First oil production from the Hassi Berkine
South Field began in May 1998. Development of other commercial fields in Algeria
is underway and production is expected to increase substantially over the next
several years. Anadarko also participates in other international exploration
projects in Eritrea, the North Atlantic Margin and Tunisia.
WHERE YOU CAN FIND MORE INFORMATION ABOUT ANADARKO
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus.
Information filed after the date of this prospectus with the SEC will update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Section 13(a), 13(c), 14,
or 15(d) of the Securities Exchange Act of 1934 until our offering is completed:
(a) Annual Report on Form 10-K for the year ended December 31, 1998;
(b) The description of our common stock set forth in the registration
statement on Form 8-A, filed with the SEC on October 5, 1998; and,
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(c) The description of our Series C Junior Participating Preferred
Stock, set forth in the registration statement on Form 8-A dated October
30, 1998.
You may request a copy of these filings, at no cost, by writing to or
telephoning us at the following address:
Corporate Secretary
Anadarko Petroleum Corporation
17001 Northchase Dr.
Houston, TX 77060
(281) 875-1101
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have authorized no
one to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or the prospectus supplement is
accurate as of any date other than the date on the front of the document.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth Anadarko's consolidated ratios of earnings
to fixed charges and earnings to combined fixed charges and preferred stock
dividends for the periods shown:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Fixed Charges....................................... 2.11 1.24 3.34 3.04 0.05
Combined Fixed Charges and Preferred Stock
Dividends......................................... 2.11 1.24 3.34 3.04 0.05
</TABLE>
Anadarko issued preferred stock in May 1998. No shares of preferred stock
were outstanding during any of the periods prior to May 1998.
As a result of Anadarko's net loss in 1998, Anadarko's earnings did not
cover fixed charges by $90 million and did not cover combined fixed charges and
preferred stock dividends by $101 million in 1998. The ratios were computed by
dividing earnings by either fixed charges or combined fixed charges and
preferred stock dividends. 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.
USE OF PROCEEDS
We will use the net proceeds we receive from the sale of the securities
offered by this prospectus and the accompanying prospectus supplement for
general corporate purposes, unless we specify otherwise in the applicable
prospectus supplement. General corporate purposes may include additions to
working capital, capital expenditures, repayment of debt or the financing of
possible acquisitions.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth the general terms and provisions that
could apply to the debt securities. Each prospectus supplement will state the
particular terms that actually will apply to the debt securities included in the
supplement.
The debt securities will be either our senior debt securities or our
subordinated securities. We have issued to date an aggregate of $1.1 billion of
senior securities. We do not have any subordinated securities outstanding at
this time.
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In addition to the following summary, you should refer to the applicable
provisions of the following documents for more detailed information:
- the senior indenture, which is incorporated by reference to Exhibit 4(j)
to the Form 10-K for year ended December 31, 1997, and
- the subordinated indenture, which is incorporated by reference to Exhibit
4(c) to Registration Statement No. 333-30927, filed with the SEC on July
7, 1997.
Neither indenture limits the aggregate principal amount of debt securities
that we may issue under that indenture. The debt securities may be issued in one
or more series as we may authorize at various times. All debt securities will be
unsecured. The senior securities will have the same rank as all of our other
unsecured and unsubordinated debt. The subordinated securities will be
subordinated to senior indebtedness as described in the "Subordinated
Securities" section on page 10. The prospectus supplement relating to the
particular series of debt securities being offered will specify the amounts,
prices and terms of those debt securities. These terms may include:
- whether the debt securities are senior securities or subordinated
securities;
- the title and the limit on the aggregate principal amount of the debt
securities;
- the dates on which the debt securities will mature;
- any annual rates (which may be fixed or variable), or the method of
determining any rates, at which the debt securities will bear interest;
- the dates from which interest shall accrue and the dates on which
interest will be payable;
- the currencies in which the debt securities are denominated and principal
and interest may be payable;
- any redemption or sinking fund terms;
- any event of default or covenant with respect to the debt securities of a
particular series, if not set forth in this prospectus;
- whether the debt securities are to be issued, in whole or in part, in the
form of one or more global securities and the depositary for the global
securities;
- whether the securities are convertible into Anadarko common stock; and,
- any other terms of the series, which will not conflict with the terms of
the applicable indenture.
We may issue debt securities of any series at various times and we may
reopen any series for further issuances from time to time without notice to, or
consent of, existing holders.
We will issue the debt securities in fully registered form without coupons.
Unless we specify otherwise in the applicable prospectus supplement, we will
issue debt securities denominated in U.S. dollars in denominations of $1,000 or
multiples of $1,000 for debt securities.
We will describe special Federal income tax and other considerations
relating to debt securities denominated in foreign currencies or units of two or
more foreign currencies in the applicable prospectus supplement.
Unless we specify otherwise in the applicable prospectus supplement, the
covenants contained in the indentures and the debt securities will not provide
special protection to holders of debt securities if we enter into a highly
leveraged transaction, recapitalization or restructuring.
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EXCHANGE, REGISTRATION AND TRANSFER
Debt securities of any series that are not global securities will be
exchangeable for other debt securities of the same series and of like aggregate
principal amount and tenor in different authorized denominations. In addition,
you may present debt securities for registration of transfer, together with a
duly executed form of transfer, at the office of the security registrar or at
the office of any transfer agent designated by us for that purpose with respect
to any series of debt securities and referred to in the applicable prospectus
supplement. No service charge is required for any transfer or exchange of debt
securities but we may require payment of any taxes and other governmental
charges. The security registrar or the transfer agent will effect the transfer
or exchange upon being satisfied with the documents of title and identity of the
person making the request. We have appointed the applicable trustee as security
registrar for the applicable indenture. We may at any time designate additional
transfer agents with respect to any series of debt securities.
In the event of any redemption in part, we will not be required to:
- issue, register the transfer of or exchange debt securities of any series
during a period beginning at the opening of business 15 days before the
mailing of notice of redemption of debt securities of that series to be
redeemed and ending at the close of business on the mailing date;
- register the transfer of or exchange any debt security, or portion
thereof, called for redemption, except the unredeemed portion of any
registered security being redeemed in part.
For a discussion of restriction on the exchange, registration and transfer
of global securities, see "Global Securities."
PAYMENT AND PAYING AGENTS
Unless we specify otherwise in the applicable prospectus supplement,
payment of principal, any premium and any interest on debt securities will be
made at the office of the paying agents that we designate at various times.
However, at our option, we may make interest payments by check mailed to the
address, as it appears in the security register, of the person entitled to the
payments. Unless we specify otherwise in the applicable prospectus supplement,
we will make payment of any installment of interest on debt securities to the
person in whose name that registered security is registered at the close of
business on the regular record date for such interest.
Unless we specify otherwise in the applicable prospectus supplement, the
Corporate Trust Office of the trustee in the Borough of Manhattan, The City of
New York, will be designated as our sole paying agent for payments with respect
to debt securities that are issued solely as debt securities.
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that we will deposit with a depositary
identified in the applicable prospectus supplement. Unless and until it is
exchanged in whole or in part for the individual debt securities it represents,
a global security may not be transferred except as a whole:
- by the applicable depositary to a nominee of the depositary,
- by any nominee to the depositary itself or another nominee, or
- by the depositary or any nominee to a successor depositary or any nominee
of the successor.
We will describe the specific terms of the depositary arrangement with
respect to a series of debt securities in the applicable prospectus supplement.
We anticipate that the following provisions will generally apply to depositary
arrangements.
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When we issue a global security in registered form, the depositary for the
global security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual debt
securities represented by that global security to the accounts of persons that
have accounts with the depositary ("participants"). Those accounts will be
designated by the dealers, underwriters or agents with respect to the underlying
debt securities or by us if those debt securities are offered and sold directly
by us. Ownership of beneficial interests in a global security will be limited to
participants or persons that may hold interests through participants. For
interests of participants, ownership of beneficial interests in the global
security will be shown on records maintained by the applicable depositary or its
nominee. For interests of persons other than participants, that ownership
information will be shown on the records of participants. Transfer of that
ownership will be effected only through those records. The laws of some states
require that certain purchasers of securities take physical delivery of
securities in definitive form. These limits and laws may impair our ability to
transfer beneficial interests in a global security.
As long as the depositary for a global security, or its nominee, is the
registered owner of that global security, the depositary or nominee will be
considered the sole owner or holder of the debt securities represented by the
global security for all purposes under the applicable indenture. Except as
provided below, owners of beneficial interests in a global security:
- will not be entitled to have any of the underlying debt securities
registered in their names,
- will not receive or be entitled to receive physical delivery of any of
the underlying debt securities in definitive form, and
- will not be considered the owners or holders under the indenture relating
to those debt securities.
Payments of principal of, any premium on and any interest on individual
debt securities represented by a global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee as the
registered owner of the global security representing such debt securities.
Neither we, the trustee for the debt securities, any paying agent nor the
registrar for the debt securities will be responsible for any aspect of the
records relating to or payments made by the depositary or any participants on
account of beneficial interests in the global security.
We expect that the depositary or its nominee, upon receipt of any payment
of principal, any premium or interest relating to a global security representing
any series of debt securities, immediately will credit participants' accounts
with the payments. Those payments will be credited in amounts proportional to
the respective beneficial interests of the participants in the principal amount
of the global security as shown on the records of the depositary or its nominee.
We also expect that payments by participants to owners of beneficial interests
in the global security held through those participants will be governed by
standing instructions and customary practices. This is now the case with
securities held for the accounts of customers registered in "street name." Those
payments will be the sole responsibility of those participants.
If the depositary for a series of debt securities is at any time unwilling,
unable or ineligible to continue as depositary and we do not appoint a successor
depositary within 90 days, we will issue individual debt securities of that
series in exchange for the global security or securities representing that
series. In addition, we may at any time in our sole discretion determine not to
have any debt securities of a series represented by one or more global
securities. In that event, we will issue individual debt securities of that
series in exchange for the global security or securities. Further, if we
specify, an owner of a beneficial interest in a global security may, on terms
acceptable to us, the trustee and the applicable depositary, receive individual
debt securities of that series in exchange for those beneficial interests. The
foregoing is subject to any limitations described in the applicable prospectus
supplement. In any such instance, the owner of the beneficial interest will be
entitled to physical delivery of individual debt securities equal in principal
amount to the beneficial interest and
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to have the debt securities registered in its name. Those individual debt
securities will be issued in any authorized denominations.
MODIFICATION OF THE INDENTURES
Under each indenture our rights and obligations and the rights of the
holders may be modified with the consent of the holders of at least a majority
in principal amount of the then outstanding debt securities of each series
affected by the modification. None of the following modifications, however, is
effective against any holder without the consent of the holders of all of the
affected outstanding debt securities:
- changing the maturity, installment or interest rate of any of the debt
securities;
- reduce the principal amount of (or premium, if any) or interest on any
debt security;
- reduce the amount of principal of an original issue discount security
payable upon acceleration of maturity;
- changing the subordination provisions of the subordinated indenture in a
manner adverse to the holders;
- changing the conversion provisions of any debt security;
- change the place or currency of payment of (or premium, if any) or
interest on any debt security;
- reducing the percentage required for modifications or waivers of
compliance with the indentures;
- impair the right of a holder to institute suit for the enforcement of any
payment on or with respect to any debt security; or
- with some exceptions, modifying the provisions for the waiver of
covenants and defaults and any of the foregoing provisions.
Any actions we or the trustee may take toward adding to our covenants,
adding events of default or establishing the structure or terms of the debt
securities as permitted by the indentures will not require the approval of any
holder of debt securities. In addition, we or the trustee may cure ambiguities
or inconsistencies in the indentures or make other provisions without the
approval of any holder as long as no holder's interests are materially and
adversely affected.
EVENTS OF DEFAULT, NOTICE AND WAIVER
"Event of default" when used in an indenture, will mean any of the
following in relation to a series of debt securities:
- failure to pay interest on any debt security for 60 days after the
interest becomes due;
- failure to pay the principal or any premium on any debt security when
due;
- failure to deposit any sinking fund payment for 60 days after such
payment becomes due;
- failure to perform or breach of any other covenant or warranty in the
indenture that continues for 90 days after our being given notice from
the trustee or the holders of at least 25% in principal amount of the
outstanding debt securities of the series;
- default in the payment when due of other indebtedness in an aggregate
principal amount in excess of $10,000,000, causing such indebtedness to
become due prior to its stated maturity, and such default is not cured
within 30 days after notice from the trustee or the holders of at least
5% in principal amount of the outstanding debt securities of the series;
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- a creditor commences involuntary bankruptcy, insolvency or similar
proceedings against us and we are unable to obtain a stay or dismissal of
that proceeding within 90 days;
- we voluntarily seek relief under bankruptcy, insolvency or similar laws
or we consent to a court entering an order for relief against us under
those laws; or
- any other event of default provided for debt securities of that series.
If any event of default relating to outstanding debt securities of any
series occurs and is continuing, either the trustee or the holders of at least
25% in principal amount of the outstanding debt securities of that series may
declare the principal of all of the outstanding debt securities of such series
to be due and immediately payable.
The indentures provide that the holders of at least a majority in principal
amount of the outstanding debt securities of any series may direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee, or of exercising any trust or power conferred on the trustee, with
respect to the debt securities of that series. The trustee may act in any way
that is consistent with those directions and may decline to act if any of the
directions is contrary to law or to the indentures or would involve the trustee
in personal liability.
The indentures provide that the holders of at least a majority in principal
amount of the outstanding debt securities of any series may on behalf of the
holders of all of the outstanding debt securities of the series waive any past
default (and its consequences) under the indentures relating to the series,
except a default (a) in the payment of the principal of or any premium on or
interest on any of the debt securities of the series, or (b) with respect to a
covenant or provision of such indentures which, under the terms of such
indentures, cannot be modified or amended without the consent of the holders of
all of the outstanding debt securities of the series affected.
The indentures contain provisions entitling the trustee, subject to the
duty of the trustee during an event of default to act with the required standard
of care, to be indemnified by the holders of the debt securities of the relevant
series before proceeding to exercise any right or power under the indentures at
the request of those holders.
The indentures require the trustee to, within 90 days after the occurrence
of a default known to it with respect to any series of outstanding debt
securities, give the holders of that series notice of the default if uncured and
unwaived. However, the trustee may withhold this notice if it in good faith
determines that the withholding of this notice is in the interest of those
holders. However, the trustee may not withhold this notice in the case of a
default in payment of principal, premium, interest or sinking fund installment
with respect to any debt securities of the series. The above notice shall not be
given until at least 60 days after the occurrence of a default in the
performance or a breach of a covenant or warranty in the applicable indenture
other than a covenant to make payment. The term "default" for the purpose of
this provision means any event that is, or after notice or lapse of time, or
both, would become, an event of default with respect to the debt securities of
that series.
Each indenture requires us to file annually with the trustee a certificate,
executed by one of our officers, indicating whether the officer has knowledge of
any default under the indenture.
CONSOLIDATION, MERGER OR SALE
We shall not consolidate with or merge into any other person or transfer or
lease our properties and assets substantially as an entirety to any person
unless the person formed by such consolidation or into which we are merged or
the person which acquires or leases our properties and assets shall be a United
States entity which assumes our obligations under the securities and the
indentures and immediately after giving effect to the transaction, no Event of
Default, or event which would become an Event of Default, shall be continuing.
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REPLACEMENT OF SECURITIES
We will replace any mutilated debt security at the expense of the holder
upon surrender of the mutilated debt security to the appropriate trustee. We
will replace debt securities that are destroyed, stolen or lost at the expense
of the holder upon delivery to the appropriate trustee of evidence of the
destruction, loss or theft of the debt securities satisfactory to us and to the
trustee. In the case of a destroyed, lost or stolen debt security, an indemnity
satisfactory to the appropriate trustee and us may be required at the expense of
the holder of the debt security before a replacement debt security will be
issued.
DEFEASANCE
The indentures contain a provision that permits us to elect to defease and
be discharged from all of our obligations (subject to limited exceptions) with
respect to any series of debt securities then outstanding provided the following
conditions have been satisfied:
- Anadarko has deposited in trust with the trustee (a) money, (b) U.S.
government obligations, or (c) a combination thereof in an amount
sufficient to pay and discharge the (i) principal, premium and interest
of the outstanding debt securities of any issue and (ii) sinking fund
payments, if any;
- no event of default has occurred or is continuing with respect to the
securities of any series being defeased;
- defeasance will not result in a breach or violation of, or constitute a
default under any agreement to which we are a party; and,
- Anadarko has delivered to the trustee an officer's certificate and
opinion of counsel that all conditions precedent relating to the
defeasance have been complied with.
CONVERSION RIGHTS
The prospectus supplement will describe whether a series of securities is
convertible into Anadarko stock and the initial conversion price per share at
which the securities may be converted.
If a convertible security has not been redeemed, the holder of the
convertible security may convert the security, or any portion of the principal
amount in integral multiples of $1,000, at the conversion price in effect at the
time of conversion into shares of Anadarko stock. Conversion rights expire at
the close of business on the date specified in the prospectus supplement for a
series of convertible securities. Conversion rights expire at the close of
business on the redemption date in the case of any convertible securities called
for redemption.
In order to exercise the conversion privilege, the person entitled to
convert the convertible security must surrender to Anadarko, at any office or
agency of Anadarko maintained for that purpose, the security with a written
notice of the election to convert the security, and if less than the entire
principal amount of the security is being converted, the amount of security to
be converted. In addition, if the convertible security is converted during the
period between a record date for the payment of interest and the related
interest payment date the person entitled to convert the security must pay to
Anadarko an amount equal to the interest payable on the principal amount being
converted.
No interest on converted securities will be paid by Anadarko on any
interest payment date after the date of conversion except for those securities
surrendered during the period between a record date for the payment of interest
and the related interest payment date.
Convertible securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of the security. No
fractional shares of stock will be issued upon
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conversion, but an adjustment in cash will be made based on the market price at
the close of business on the date of conversion.
The conversion price will be subject to adjustment in the event of:
- payment of stock dividends or other distributions on Anadarko stock;
- issuance of rights or warrants to all Anadarko stockholders entitling
them to subscribe for or purchase Anadarko stock at a price less than the
market price of Anadarko stock;
- the subdivision of Anadarko stock into a greater or lesser number of
shares of stock;
- the distribution to all stockholders of evidences of indebtedness or
assets of Anadarko, excluding stock dividends or other distributions and
rights or warrants; or,
- the reclassification of Anadarko stock into other securities.
Anadarko may also decrease the conversion price as it considers 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 Anadarko stock.
Anadarko will pay any and all transfer taxes that may be payable in respect
of the issue or delivery of shares of stock on conversion of the securities.
Anadarko is not required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares in a name other than that
of the holder of the security to be converted and no issue and delivery shall be
made unless and until the person requesting the issue has paid the amount of any
such tax or established to the satisfaction of Anadarko that such tax has been
paid.
After the occurrence of:
- consolidation with or merger of Anadarko into any other corporation;
- any merger of another corporation into Anadarko; or
- any sale or transfer of substantially all of the assets of Anadarko
which results in any reclassification, change or conversion of the stock, the
holders of any convertible securities will be entitled to receive on conversion
the kind and amount of shares of stock or other securities, cash or other
property receivable upon such event by a holder of Anadarko stock immediately
prior to the occurrence of the event.
GOVERNING LAW
The indentures and the debt securities will be governed by, and construed
in accordance with, the laws of the State of New York.
SENIOR SECURITIES LIMITATIONS ON LIENS
Neither we nor any domestic subsidiary of ours will issue, assume or
guarantee any debt secured by a mortgage, lien, pledge or other encumbrance upon
real or personal property of ours or of any of our domestic subsidiaries that is
located in the continental U.S. without providing that the senior securities
will be secured equally and ratably or prior to the debt. However, this
provision shall not apply to the following:
- Mortgages existing on the date of the senior indenture;
- Mortgages existing at the time a corporation becomes a domestic
subsidiary of ours or at the time it is merged into or consolidated with
us or a domestic subsidiary of ours;
- Mortgages in favor of Anadarko or any domestic subsidiary of ours;
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- Mortgages on property (a) existing at the time of the property's
acquisition, (b) to secure payment of all or part of the property's
purchase price, or (c) to secure debt incurred prior to, at the time of
or within 180 days after the acquisition, the completion of construction
or the commencement of full operation of the property or for the purpose
of financing all or part of the property's purchase price;
- Mortgages in favor of the United States of America, any state, any other
country or any political subdivision required by contract or statute;
- Mortgages on property to secure all or part of the cost of construction,
development or repair, alteration or improvement of the property not
later than one year after the completion of or the placing into operation
the property;
- Mortgages on minerals or geothermal resources in place, or on related
leasehold or other property interests which are incurred to finance
development, production or acquisition costs;
- Mortgages on equipment used or usable for drilling, servicing or
operation of oil, gas, coal or other mineral properties or of geothermal
properties;
- Mortgages required by any contract or statute in order to permit us or a
subsidiary of ours to perform any contract or subcontract made with or at
the request of the U S., any state or any department, agency or
instrumentality of either; or
- Any extension, renewal or replacement of any mortgage referred to in the
preceding items or of any debt secured by those mortgages as long as the
extension, renewal or replacement will be limited to substantially the
same property (plus improvements) which secured the mortgage.
Notwithstanding anything mentioned above, we and any one or more of our
domestic subsidiaries may issue, assume or guarantee debt secured by mortgages
that would otherwise be subject to the foregoing restrictions in an aggregate
principal amount which, together with the aggregate outstanding principal amount
of all other debt of ours and our domestic subsidiaries that would otherwise be
subject to the foregoing restrictions, does not at any one time exceed 10% of
the aggregate amount of assets of Anadarko and its domestic subsidiaries after
deducting therefrom all current liabilities, unamortized debt discount, expense
and other like intangibles as calculated on our consolidated balance sheet as of
a date within 150 days prior to the date of determination.
The following types of transactions, among others, shall not be deemed to
create debt secured by mortgages: (1) the sale or other transfer of oil, gas or
other minerals in place for a period of time until, or in an amount such that,
the transferee will realize from the sale or transfer a specified amount
(however determined) of money or such minerals, or the sale or other transfer of
any other interest in property of the character commonly referred to as an oil
payment or a production payment, and (2) the sale or transfer by Anadarko or a
domestic subsidiary of properties to a partnership, joint venture or other
entity in which we or our domestic subsidiary would retain partial ownership of
the properties.
THE TRUSTEE
Harris Trust and Savings Bank is trustee under the senior indenture. The
trustee or its affiliates have other customary banking relationships with us and
our affiliates.
SUBORDINATED SECURITIES
Under the subordinated indenture, payment of the principal, interest and
any premium on the subordinated securities will generally be subordinated in
right of payment to the prior payment in full of all of our senior indebtedness.
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"Senior indebtedness" is defined as the principal of, any premium and
accrued and unpaid interest on the following items, whether outstanding on or
created, incurred or assumed after the date of execution of the subordinated
indenture:
- our indebtedness for money borrowed (other than the subordinated
securities);
- guarantees by us of indebtedness for money borrowed of any other person;
and,
- indebtedness evidenced by notes, debentures, bonds or other instruments
of indebtedness for the payment of which we are responsible or liable, by
guarantees or otherwise.
Senior indebtedness shall also be deemed to include modifications,
renewals, extensions and refundings of any of the types of indebtedness,
liability, obligations or guarantee listed above, unless the relevant instrument
provides that such indebtedness, liability, obligation or guarantee, or such
modification, renewal, extension or refunding, is not senior in right of payment
to the subordinated securities.
No payment by us on account of principal of, any premium or interest on the
subordinated securities except for sinking fund payments as described below may
be made if:
- any default or event of default with respect to any senior indebtedness
occurs and is continuing, or
- any judicial proceeding is pending with respect to any default in payment
of senior indebtedness.
Sinking fund payments may be made during a suspension of principal or
interest payments on subordinated debt provided the sinking fund payments are
made by securities redeemed or acquired prior to the default or by means of
conversion of the securities.
In the event that any subordinated security is declared due and payable
before its specified date, or upon any payment or distribution of assets by us
to creditors upon our dissolution, winding up, liquidation or reorganization,
all principal of, any premium and interest due or to become due on all senior
indebtedness must be paid in full before the holders of subordinated securities
are entitled to receive or take any payment. Subject to the payment in full of
all senior indebtedness, the holders of the subordinated securities are to be
subrogated to the rights of the holders of senior indebtedness to receive
payments or distribution of our assets applicable to senior indebtedness until
the subordinated securities are paid in full.
By reason of this subordination, in the event of insolvency, our creditors
who are holders of senior indebtedness, as well as some of our general
creditors, may recover more, ratably, than the holders of the subordinated
securities.
The subordinated indenture will not limit the amount of senior indebtedness
or debt securities which may be issued by us or any of our subsidiaries.
DESCRIPTION OF PREFERRED STOCK
Our Restated Articles of Incorporation authorize the board of directors of
Anadarko, without further stockholder action, to provide for the issuance of up
to 2,000,000 shares of preferred stock, in one or more series, and to fix the
designations, terms, and relative rights and preferences, including the dividend
rate, voting rights, conversion rights, redemption and sinking fund provisions
and liquidation values of each of these series. We may amend from time to time
our restated articles to increase the number of authorized shares of preferred
stock. Any amendment like this would require the approval of the holders of a
majority of the outstanding shares. As of the date of this prospectus, we have
200,000 shares of 5.46% Series B Cumulative Preferred Stock outstanding.
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The particular terms of any series of preferred stock being offered by us
under this shelf registration will be described in the prospectus supplement
relating to that series of preferred stock. Those terms may include:
- the title and liquidation preference per share of the preferred stock and
the number of shares offered;
- the purchase price of the preferred stock;
- the dividend rate (or method of calculation), the dates on which
dividends will be paid and the date from which dividends will begin to
accumulate;
- any redemption or sinking fund provisions of the preferred stock;
- any conversion provisions of the preferred stock;
- the voting rights, if any, of the preferred stock; and,
- any additional dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions of the
preferred stock.
If the terms of any series of preferred stock being offered differ from the
terms set forth in this prospectus, those terms will also be disclosed in the
prospectus supplement relating to that series of preferred stock. You should
also refer to the certificate of designation establishing a particular series of
preferred stock that will be filed with the Secretary of State of the State of
Delaware and the SEC in connection with any offering of preferred stock.
The preferred stock will, when issued, be fully paid and nonassessable.
DIVIDEND RIGHTS
The preferred stock will be preferred over the common stock as to payment
of dividends. Before any dividends or distributions (other than dividends or
distributions payable in common stock) on the common stock shall be declared and
set apart for payment or paid, the holders of shares of each series of preferred
stock will be entitled to receive dividends when, as and if declared by the
board of directors of Anadarko. We will pay those dividends either in cash,
shares of common stock or preferred stock or otherwise, at the rate and on the
date or dates set forth in the prospectus supplement. With respect to each
series of preferred stock, the dividends on each share of the series will be
cumulative from the date of issue of the share unless some other date is set
forth in the prospectus supplement relating to the series. Accruals of dividends
will not bear interest.
RIGHTS UPON LIQUIDATION
The preferred stock will be preferred over the common stock as to asset
distributions so that the holders of each series of preferred stock will be
entitled to be paid, upon our voluntary or involuntary liquidation, dissolution
or winding up and before any distribution is made to the holders of common
stock, the amount set forth in the applicable prospectus supplement. However, in
this case the holders of preferred stock will not be entitled to any other or
further payment. If upon any liquidation, dissolution or winding up our net
assets are insufficient to permit the payment in full of the respective amounts
to which the holders of all outstanding preferred stock are entitled, our entire
remaining net assets will be distributed among the holders of each series of
preferred stock in amounts proportional to the full amounts to which the holders
of each series are entitled.
REDEMPTION
All shares of any series of preferred stock will be redeemable to the
extent set forth in the prospectus supplement relating to the series. All shares
of any series of preferred stock will be
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convertible into shares of common stock or into shares of any other series of
preferred stock to the extent set forth in the applicable prospectus supplement.
PREFERRED STOCK PURCHASE RIGHTS
On October 30, 1998, we entered into a rights agreement with The Chase
Manhattan Bank, as rights agent, providing for a dividend of one preferred stock
purchase right for each outstanding share of our common stock. We issued the
dividend to stockholders of record on November 10, 1998, and holders of shares
of common stock issued since that date are issued rights with their shares. The
rights trade automatically with shares of common stock and become exercisable
only under the circumstances described below. The rights are designed to protect
the interests of Anadarko and our stockholders against coercive takeover
tactics. The purpose of the rights is to encourage potential acquirers to
negotiate with the board of directors of Anadarko prior to attempting a takeover
and to provide the board with leverage in negotiating on behalf of all
stockholders the terms of any proposed takeover. The rights may have
anti-takeover effects. The rights should not, however, interfere with any merger
or other business combination approved by the board of directors of Anadarko.
Until a right is exercised, the right will not entitle the holder to
additional rights as an Anadarko stockholder, including, without limitation, the
right to vote or to receive dividends. Upon becoming exercisable, each right
will entitle its holder to purchase from us one one-thousandth of a share of
Series C Junior Participating Preferred Stock at a purchase price of $175 per
right, subject to adjustment. In general, the rights will not be exercisable
until the earlier of (a) any time that we learn that a person or group or an
affiliate or associate of the person or group has acquired, or has obtained the
right to acquire, beneficial ownership of 15% or more of our outstanding common
stock, unless provisions preventing accidental triggering of the rights apply
and (b) the close of business on the date, if any, designated by the board of
directors of Anadarko following the commencement of, or first public disclosure
of an intent to commence, a tender or exchange offer for 15% or more of our
outstanding common stock. Below we refer to the earlier of those dates as the
"distribution date" and the person or group acquiring at least 15% of our common
stock as an "acquiring person." In the event that we are acquired in a merger or
other business combination, or 50% or more of our consolidated assets or earning
power are sold after a person becomes an acquiring person, each right will
entitle its holder to purchase, for the purchase price, that number of common
shares of the corporation which at the time of the transaction would have a
market value of twice the right exercise price.
Any rights that are at any time beneficially owned by an acquiring person,
or any associate or affiliate of the acquiring person, will be null and void and
nontransferable, and any holder of such right, including any purported
transferee or subsequent holder, will be unable to exercise or transfer the
right.
The rights will expire at the close of business on November 10, 2008,
unless redeemed before that time. At any time prior to the earlier of (a) the
time a person or group becomes an acquiring person and (b) the expiration date,
the board of directors of Anadarko may redeem the rights in whole, but not in
part, at a price of $.01 per right. This amount is subject to adjustment as
provided in the rights agreement.
The preceding summary is not complete and is not intended to give full
effect to provisions of statutory or common law. You should refer to the
applicable provisions of the rights agreement and the form of right certificate,
which are incorporated by reference to Exhibit 4.1 to our Form 8-A, filed with
the SEC on October 30, 1998.
PROVISIONS OF ANADARKO'S RESTATED CERTIFICATE OF INCORPORATION
In the event of a proposed merger or tender offer, proxy contest or other
attempt to gain control of us which is not approved by the board of directors of
Anadarko, it would be possible for the board of directors of Anadarko to
authorize the issuance of one or more series of preferred stock with voting
rights or other rights and preferences which would impede the success of the
proposed merger, tender
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offer, proxy contest or other attempt to gain control of us. This authority may
be limited by applicable law, the restated articles and the applicable rules of
the stock exchanges upon which the common stock is listed. The consent of the
holders of common stock would not be required for any issuance of preferred
stock like this.
The restated articles also provide that the board of directors of Anadarko
is classified into three classes and that some provisions of the restated
articles may be amended only by the affirmative vote of the holders of at least
80% of the voting power of our then outstanding voting stock.
DESCRIPTION OF DEPOSITARY SHARES
We may, at our option, elect to offer fractional shares of preferred stock,
rather than full shares of preferred stock. If we exercise this option, we will
issue to the public receipts for depositary shares, and each of these depositary
shares will represent a fraction (to be set forth in the applicable prospectus
supplement) of a share of a particular series of preferred stock.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a deposit agreement between us and a bank or
trust company selected by us. The depositary will have its principal office in
the United States and a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a depositary share
will be entitled, in proportion to the applicable fraction of a share of
preferred stock underlying that depositary share, to all the rights and
preferences of the preferred stock underlying that depositary share. Those
rights include dividend, voting, redemption and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of preferred stock underlying the
depositary shares, in accordance with the terms of the offering. Copies of the
forms of deposit agreement and depositary receipt will be filed as exhibits to
the registration statement. The following summary of the deposit agreement, the
depositary shares and the depositary receipts is not complete. You should refer
to the forms of the deposit agreement and depositary receipts that will be filed
with the SEC in connection with the offering of the specific depositary shares.
Pending the preparation of definitive engraved depositary receipts, the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to the definitive depositary receipts but not in
definitive form. These temporary depositary receipts entitle their holders to
all the rights of definitive depositary receipts which are to be prepared
without unreasonable delay. Temporary depositary receipts will then be
exchangeable for definitive depositary receipts at our expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to the preferred stock to the record holders
of depositary shares relating to the preferred stock in proportion to the number
of depositary shares owned by those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the depositary
may, with our approval, sell the property and distribute the net proceeds from
the sale to the applicable holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of preferred stock represented by depositary shares is subject
to redemption, the depositary shares will be redeemed from the proceeds received
by the depositary resulting from the
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redemption, in whole or in part, of that series of preferred stock held by the
depositary. The redemption price per depositary share will be equal to the
applicable fraction of the redemption price per share payable with respect to
that series of the preferred stock. Whenever we redeem shares of preferred stock
that are held by the depositary, the depositary will redeem, as of the same
redemption date, the number of depositary shares representing the shares of
preferred stock so redeemed. If fewer than all the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot or pro
rata as may be determined by the depositary.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the preferred
stock are entitled to vote, the depositary will mail the information contained
in the notice to the record holders of the depositary shares underlying the
preferred stock. Each record holder of the depositary shares on the record date
(which will be the same date as the record date for the preferred stock) will be
entitled to instruct the depositary as to the exercise of the voting rights
pertaining to the amount of the preferred stock represented by such holder's
depositary shares. The depositary will then try, as far as practicable, to vote
the number of shares of preferred stock underlying those depositary shares in
accordance with such instructions, and we will agree to take all actions which
may be deemed necessary by the depositary to enable the depositary to do so. The
depositary will not vote the shares of preferred stock to the extent it does not
receive specific instructions from the holders of depositary shares underlying
the preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding. The deposit agreement may be
terminated by us or by the depositary only if (a) all outstanding depositary
shares have been redeemed or (b) there has been a final distribution of the
underlying preferred stock in connection with our liquidation, dissolution or
winding up and the preferred stock has been distributed to the holders of
depositary receipts.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will also pay
charges of the depositary in connection with the initial deposit of the
preferred stock and any redemption of the preferred stock. Holders of depositary
receipts will pay other transfer and other taxes and governmental charges and
those other charges, including a fee for the withdrawal of shares of preferred
stock upon surrender of depositary receipts, as are expressly provided in the
deposit agreement to be for their accounts.
MISCELLANEOUS
The depositary will forward to holders of depositary receipts all reports
and communications from us that we deliver to the depositary and that we are
required to furnish to the holders of the preferred stock.
Neither we nor the depositary will be liable if either of us is prevented
or delayed by law or any circumstance beyond our control in performing our
respective obligations under the deposit agreement. Our obligations and those of
the depositary will be limited to performance in good faith of our respective
duties under the deposit agreement. Neither we nor they will be obligated to
prosecute or defend any legal proceeding in respect of any depositary shares or
preferred stock unless satisfactory indemnity is furnished. We and the
depositary may rely upon written advice of counsel or accountants,
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or upon information provided by persons presenting preferred stock for deposit,
holders of depositary receipts or other persons believed to be competent and on
documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering notice to us of its
election to resign. We may remove the depositary at any time. Any resignation or
removal will take effect upon the appointment of a successor depositary and its
acceptance of the appointment. The successor depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
DESCRIPTION OF COMMON STOCK
As of the date of this prospectus, we are authorized to issue up to
200,000,000 shares of common stock. As of March 31, 1999, we had 122,551,004
shares of common stock issued and had reserved 10,058,064 additional shares of
common stock for issuance under our various stock and compensation incentive
plans.
The following summary is not complete and is not intended to give full
effect to provisions of statutory or common law. You should refer to the
applicable provisions of the following documents:
- the restated certificate of incorporation, which are incorporated by
reference to Exhibit 19(a)(i) to our Form 10-Q for the quarter ended
September 30, 1986; and,
- the by-laws, as amended, which are incorporated by reference to Exhibit
3(b) to our Form 10-Q for the quarter ended June 30, 1996.
DIVIDENDS
The holders of common stock are entitled to receive dividends when, as and
if declared by the board of directors of Anadarko, out of funds legally
available for their payment subject to the rights of holders of preferred stock.
VOTING RIGHTS
The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of stockholders.
RIGHTS UPON LIQUIDATION
In the event of our voluntary or involuntary liquidation, dissolution or
winding up, the holders of common stock will be entitled to share equally in any
of our assets available for distribution after the payment in full of all debts
and distributions and after the holders of all series of outstanding preferred
stock have received their liquidation preferences in full.
MISCELLANEOUS
The outstanding shares of common stock are fully paid and nonassessable.
The holders of common stock are not entitled to preemptive or redemption rights.
Shares of common stock are not convertible into shares of any other class of
capital stock. ChaseMellon Shareholder Services LLC, New York, New York, is the
transfer agent and registrar for the common stock.
DESCRIPTION OF SECURITIES WARRANTS
We may issue securities warrants for the purchase of debt securities,
preferred stock or common stock. Securities warrants may be issued independently
or together with debt securities, preferred
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stock or common stock and may be attached to or separate from any offered
securities. Each series of securities warrants will be issued under a separate
warrant agreement to be entered into between us and a bank or trust company, as
warrant agent. The securities warrant agent will act solely as our agent in
connection with the securities warrants and will not assume any obligation or
relationship of agency or trust for or with any registered holders of securities
warrants or beneficial owners of securities warrants. In addition to this
summary, you should refer to the securities warrant agreement, including the
forms of securities warrant certificate representing the securities warrants,
relating to the specific securities warrants being offered for the complete
terms of the securities warrant agreement and the securities warrants. That
securities warrant agreement, together with the terms of securities warrant
certificate and securities warrants, will be filed with the SEC in connection
with the offering of the specific securities warrants.
The particular terms of any issue of securities warrants will be described
in the prospectus supplement relating to the issue. Those terms may include:
- the designation, aggregate principal amount, currencies, denominations
and terms of the series of debt securities purchasable upon exercise of
securities warrants to purchase debt securities and the price at which
the debt securities may be purchased upon exercise;
- the designation, number of shares, stated value and terms (including,
without limitation, liquidation, dividend, conversion and voting rights)
of the series of preferred stock purchasable upon exercise of securities
warrants to purchase shares of preferred stock and the price at which
such number of shares of preferred stock of such series may be purchased
upon such exercise;
- the number of shares of common stock purchasable upon the exercise of
securities warrants to purchase shares of common stock and the price at
which such number of shares of common stock may be purchased upon such
exercise;
- the date on which the right to exercise the securities warrants will
commence and the date on which the right will expire;
- United States Federal income tax consequences applicable to the
securities warrants; and,
- any other terms of the securities warrant.
Securities warrants for the purchase of preferred stock and common stock
will be offered and exercisable for U.S. dollars only. Securities warrants will
be issued in registered form only. The exercise price for securities warrants
will be subject to adjustment in accordance with the applicable prospectus
supplement.
Each securities warrant will entitle its holder to purchase the principal
amount of debt securities or the number of shares of preferred stock or common
stock at the exercise price set forth in, or calculable as set forth in, the
applicable prospectus supplement. The exercise price may be adjusted upon the
occurrence of events as set forth in the prospectus supplement. After the close
of business on the expiration date, unexercised securities warrants will become
void. We will specify the place or places where, and the manner in which,
securities warrants may be exercised in the applicable prospectus supplement.
Prior to the exercise of any securities warrants to purchase debt
securities, preferred stock or common stock, holders of the securities warrants
will not have any of the rights of holders of the debt securities, preferred
stock or common stock purchasable upon exercise, including:
- in the case of securities warrants for the purchase of debt securities,
the right to receive payments of principal of, any premium or interest on
the debt securities purchasable upon exercise or to enforce covenants in
the applicable indenture; or,
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- in the case of securities warrants for the purchase of preferred stock or
common stock, the right to vote or to receive any payments of dividends
on the preferred stock or common stock purchasable upon exercise.
PLAN OF DISTRIBUTION
We may sell the debt securities, preferred stock, depositary shares, common
stock or securities warrants (together referred to as the "offered securities")
(a) through underwriters or dealers; (b) directly to one or a limited number of
institutional purchasers; or, (c) through agents. This prospectus or the
applicable prospectus supplement will set forth the terms of the offering of any
offered securities, including the name or names of any underwriters, dealers or
agents, the price of the offered securities and the net proceeds to us from such
sale, any underwriting commissions or other items constituting underwriters'
compensation.
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The offered securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
investment banking firms or others, as designated. Unless otherwise set forth in
the applicable prospectus supplement, the obligations of the underwriters or
agents to purchase the offered securities will be subject to conditions
precedent and the underwriters will be obligated to purchase all the offered
securities if any are purchased. Any initial public offering price and any
underwriting commissions or other items constituting underwriters' compensation
may be changed from time to time.
If a dealer is utilized in the sale of any offered securities, we will sell
those offered securities to the dealer, as principal. The dealer may then resell
the offered securities to the public at varying prices to be determined by the
dealer at the time of resale.
We may sell offered securities directly to one or more institutional
purchasers, or through agents at a fixed price or prices, which may be changed,
or at varying prices determined at time of sale. Unless otherwise indicated in
the prospectus supplement, any agent will be acting on a best effort basis for
the period of its appointment.
If an applicable prospectus supplement indicates, we will authorize agents,
underwriters or dealers to solicit offers by specified institutions to purchase
offered securities from us at the public offering price set forth in the
prospectus supplement under delayed delivery contracts providing for payment and
delivery on a specified date in the future. These contracts will be subject only
to those conditions set forth in the prospectus supplement, and the prospectus
supplement will set forth the commission payable for solicitation of the
contracts.
Under agreements entered into with us, agents and underwriters who
participate in the distribution of the offered securities may be entitled to
indemnification by us against certain civil liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
which the agents or underwriters may be required to make. Agents and
underwriters may be customers of, engage in transactions with or perform
services for us in the ordinary course of business.
LEGAL MATTERS
The validity of the offered securities will be passed upon for us by Davis
Polk & Wardwell, New York, New York, and for any underwriters, dealers or agents
by Hughes Hubbard & Reed LLP, New York, New York.
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EXPERTS
The consolidated financial statements of Anadarko and subsidiaries as of
December 31, 1998 and 1997 and for each of the years in the three-year period
ended December 31, 1998 incorporated by reference in the registration statement
have been incorporated herein in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of such firm as experts in accounting and auditing.
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the securities offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
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TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Use of Proceeds............................ S-2
Special Note Regarding Forward Looking
Statements............................... S-2
Common Stock Price Ranges and Dividends.... S-2
Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends................ S-3
Description of the Debentures.............. S-3
Certain United States Federal Income Tax
Considerations........................... S-10
Underwriting............................... S-14
Notice to Canadian Residents............... S-15
Prospectus
About This Prospectus...................... 2
Anadarko Petroleum Corporation............. 2
Where You Can Find More Information About
Anadarko................................. 2
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends................ 3
Use of Proceeds............................ 3
Description of Debt Securities............. 3
Description of Preferred Stock............. 12
Description of Depositary Shares........... 15
Description of Common Stock................ 17
Description of Securities Warrants......... 17
Plan of Distribution....................... 19
Legal Matters.............................. 19
Experts.................................... 20
</TABLE>
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$600,000,000
[ANADARKO LOGO]
Zero Coupon Convertible Debentures
due March 2020
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PROSPECTUS SUPPLEMENT
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CREDIT SUISSE FIRST BOSTON
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