<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
---------------------
Date of Report (Date of earliest event reported): MARCH 2, 1998
UNION TEXAS PETROLEUM HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1-9019 76-0040040
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
</TABLE>
1330 POST OAK BOULEVARD, HOUSTON, TEXAS 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 623-6544
================================================================================
<PAGE> 2
ITEM 5. OTHER EVENTS.
On this Current Report on Form 8-K, the Registrant is filing with the
Securities and Exchange Commission certain items that are to be incorporated by
reference into its Registration Statement on Form S-3 (Registration No.
333-31039).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 -- Form of Purchase Agreement between the Company and the
Underwriters with respect to the % Series A
Cumulative Preferred Stock
4.9 -- Form of Certificate of Designation, % Series A
Cumulative Preferred Stock
4.12 -- Form of % Series A Cumulative Preferred Stock
Certificate
5.1 -- Opinion of King & Spalding regarding legality of shares
of % Series A Cumulative Preferred Stock
12.1 -- Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
23.2 -- Consent of legal counsel included in Exhibit 5.1
</TABLE>
1
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By: /s/ LARRY D. KALMBACH
-------------------------------------
Larry D. Kalmbach
Vice President and Chief Financial
Officer
Date: March 2, 1998
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<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 -- Form of Purchase Agreement between the Company and the
Underwriters with respect to the % Series A
Cumulative Preferred Stock
4.9 -- Form of Certificate of Designation, % Series A
Cumulative Preferred Stock
4.12 -- Form of % Series A Cumulative Preferred Stock
Certificate
5.1 -- Opinion of King & Spalding regarding legality of shares
of % Series A Cumulative Preferred Stock
12.1 -- Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
23.2 -- Consent of legal counsel included in Exhibit 5.1
</TABLE>
<PAGE> 1
EXHIBIT 1.1
PURCHASE AGREEMENT
<PAGE> 2
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UNION TEXAS PETROLEUM HOLDINGS, INC.
(A DELAWARE CORPORATION)
SHARES
% SERIES A CUMULATIVE PREFERRED STOCK
PURCHASE AGREEMENT
Dated: March , 1998
================================================================================
<PAGE> 3
UNION TEXAS PETROLEUM HOLDINGS, INC.
(A DELAWARE CORPORATION)
SHARES
% SERIES A CUMULATIVE PREFERRED STOCK
PURCHASE AGREEMENT
March , 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Salomon Brothers Inc
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Union Texas Petroleum Holdings, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to sell
to Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Salomon Brothers Inc (the "Underwriters") an aggregate of shares of
% Series A Cumulative Preferred Stock, par value $.01 per share (the
"Preferred Stock"), of the Company.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) A registration statement in respect of the Preferred Stock has
been filed with the Securities and Exchange Commission (the "Commission");
such registration statement and any post-effective amendment thereto, each
in the form heretofore delivered to you, and, excluding exhibits thereto
but including all documents incorporated by reference in the prospectus
contained therein, have been declared effective by the Commission in such
form; no other document with respect to such registration statement or
document incorporated by reference therein has heretofore been filed with
the Commission; and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission; the various parts of
such registration statement, including all exhibits thereto and including
the documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; the final prospectus used in connection with the offering of
the Preferred Stock, in the form first filed with the Commission pursuant
to Rule 424(b) under the Securities Act of 1933, as amended (the "Act"),
being hereinafter called the "Prospectus"; any reference herein to the
Prospectus being deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Prospectus; any reference to any amendment or supplement
to the Prospectus being deemed to refer to and include any documents filed
after the date of such Prospectus under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Prospectus; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the
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effective date of the Registration Statement that is incorporated by
reference in the Registration Statement;
(ii) The documents incorporated by reference in the Prospectus or any
amendment or supplement thereto, when they became effective or were filed
with the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and the
published rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(iii) The Registration Statement and the Prospectus conforms, and any
further amendment or supplement to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the published rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through you expressly for use
therein;
(iv) The Prospectus was filed with the Commission pursuant to Rule
424(b)(3) within the applicable time period prescribed for such filing by
the rules and regulations under the Act;
(v) None of the Company or any of its subsidiaries or, to the best of
the Company's knowledge, Unimar Company, a Texas general partnership
("Unimar"), has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus or any amendment or supplement thereto,
which loss or interference is material to the Company and its subsidiaries
taken as a whole; and, since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock (other than (i) any shares of capital
stock of the Company sold upon exercise of a subscription, option or
warrant or the conversion of a security outstanding on the date of this
Agreement, (ii) any shares of such capital stock, or other securities
convertible or exercisable or exchangeable for such shares, in either case
issued pursuant to any employee stock option or benefit plan of the Company
existing on the date of this Agreement and (iii) stock repurchases in
accordance with the Company's publicly announced stock repurchase program)
or any increase of more than $75,000,000 in the consolidated short-term or
long-term debt of the Company or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Registration Statement or the Prospectus or any amendment or
supplement thereto;
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus or any amendment or
supplement thereto, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, or is subject to no
material liability or disability by reason of
2
<PAGE> 5
the failure to be so qualified in any such jurisdiction; each subsidiary of
the Company identified in Annex II hereto (collectively, the "Material
Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation; Unimar has been duly formed and is validly existing as a
partnership under the laws of the State of Texas; and the Company does not
have any subsidiary that is a "significant subsidiary" (within the meaning
of the published rules and regulations of the Commission under the Act)
that is not identified in Annex II hereto;
(vii) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable; and all of the issued shares of capital stock of each
Material Subsidiary have been duly and validly authorized and issued and
are fully paid and non-assessable, and all of such shares of capital stock
and 50% of the equity interests in Unimar (except for directors' qualifying
shares and shares held by third parties solely to satisfy local law
requirements and except as set forth in the Prospectus) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(viii) The Preferred Stock has been duly and validly authorized and,
when issued and delivered pursuant to this Agreement, will be fully paid
and non-assessable and will conform to the description of the Preferred
Stock contained in the Prospectus or any amendment or supplement thereto;
(ix) The compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries or, to the best
of the Company's knowledge, Unimar is a party or by which the Company or
any of its subsidiaries or, to the best of the Company's knowledge, Unimar
is bound or to which any of the property or assets of the Company or any of
its subsidiaries or, to the best of the Company's knowledge, Unimar is
subject, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, any of
its subsidiaries or, to the best of the Company's knowledge, Unimar or any
of their properties (excluding conflicts, breaches, violations and defaults
that, individually or in the aggregate, will not have any material adverse
effect on the general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the Company and
its subsidiaries taken as a whole), nor will any such action result in any
violation of the provisions of the Restated Certificate of Incorporation or
By-laws of the Company; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Preferred Stock by the
Underwriters;
(x) Other than as set forth in the Prospectus or any amendment or
supplement thereto, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries or, to the best of the
Company's knowledge, Unimar is a party or of which any property of the
Company or any of its subsidiaries or, to the best of the Company's
knowledge, Unimar is the subject which, if determined adversely to the
Company or any of its subsidiaries or Unimar, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xi) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xii) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the published rules and
3
<PAGE> 6
regulations of the Commission thereunder, and the offer and sale of the
Preferred Stock will not subject the Company to registration under, or
result in a violation of, the Investment Company Act; and
(xiii) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes.
2. Subject to the terms and conditions herein set forth, the Company agrees
to sell to the several Underwriters and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company at a purchase price per
share of $ the number of shares of Preferred Stock set forth opposite
the name of such Underwriter on Schedule A hereto.
3. Upon the authorization by you of the release of the Preferred Stock, the
several Underwriters propose to offer the Preferred Stock for sale upon the
terms and conditions set forth in the Prospectus or any amendment or supplement
thereto.
4. Certificates in definitive form of the shares of Preferred Stock to be
purchased by each Underwriter hereunder, and in such denominations and
registered in such names as Merrill Lynch may request upon at least forty-eight
hours' prior notice to the Company, shall be delivered by or on behalf of the
Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company, in
immediately available funds, all at the office of Merrill Lynch, North Tower,
World Financial Center, New York, New York, or through the facilities of The
Depository Trust Company. The time and date of such delivery and payment shall
be 9:30 a.m., New York time, on March , 1998 or such other time and date as
you and the Company may agree upon in writing. Such time and date for delivery
of the Preferred Stock is herein called the "Time of Delivery". Such
certificates will be made available for checking and packaging at least
twenty-four hours prior to each Time of Delivery at such office of Merrill
Lynch.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus and any amendment or supplement thereto
in a form approved by you and to file the Prospectus or any such amendment
or supplement thereto pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, and, if applicable, such earlier
time as may be required by Rule 424(b) under the Act; to make no further
amendment or supplement to the Registration Statement or Prospectus after
the date of this Agreement and prior to the Time of Delivery which shall be
reasonably disapproved by you promptly after reasonable notice thereof; to
advise you, promptly after it receives notice thereof, of the time after
the Time of Delivery when any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you copies thereof; to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Preferred Stock; to advise you,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any prospectus, of the suspension of the qualification of the
Preferred Stock for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the
use of any prospectus or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Preferred Stock for offering and sale
under the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Preferred Stock, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
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<PAGE> 7
(c) To furnish you with copies of the Prospectus or any amendment or
supplement thereto in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required in the
judgment of counsel for the Underwriters at any time prior to the
expiration of nine months after the date of this Agreement and if at such
time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to further amend
or supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus as then amended or supplemented
in order to comply with the Act or the Exchange Act, to notify you and upon
your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as you may from time to time reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Preferred
Stock at any time nine months or more after the date of this Agreement,
upon your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including at the option
of the Company Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 90 days after the date hereof the Company will not,
and will obtain the agreement of each of its executive officers that they
will not, offer, sell, contract to sell or otherwise dispose of (other than
pursuant to stock option, other incentive benefit or savings plans
existing, or on the conversion, exchange or exercise of convertible,
exchangeable or exercisable securities outstanding, on the date of this
Agreement) any Preferred Stock or securities convertible or exchangeable
into or exercisable for Preferred Stock, without your prior written consent
or as described in the Prospectus or any supplement or amendment thereto;
(f) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; and
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission).
6. The Company covenants and agrees with the several Underwriters that it
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Preferred Stock under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any preliminary prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing this Agreement,
the Blue Sky Memorandum
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<PAGE> 8
and any other documents in connection with the offering, purchase, sale and
delivery of the Preferred Stock; (iii) all expenses in connection with the
qualification of the Preferred Stock for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Preferred Stock; (v)
the cost of preparing stock certificates; (vi) the cost and charges of any
transfer agent or registrar; and (vii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section, other than transfer taxes. It is
understood, however, that, except as provided in this Section, Section 8 and
Section 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale of
any of the Preferred Stock by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
respective obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated such Time of
Delivery, with respect to the incorporation of the Company, the validity of
the Preferred Stock being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and other related matters as you
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(c) King & Spalding, counsel for the Company, shall have furnished to
you its written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with requisite corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) All of the issued shares of capital stock of the Company
(including the Preferred Stock being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully paid and
non-assessable; and the Preferred Stock conforms to the description of
the Preferred Stock contained in the Prospectus and any amendment or
supplement thereto;
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases a material amount
of properties, or conducts any material business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of matters of fact upon
certificates of public officials or officers of the Company, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such certificates);
(iv) Each Material Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; to the best of such counsel's knowledge
after reasonable investigation, Unimar has been duly formed and is
validly existing as a partnership under the laws of the State of Texas;
and all of the issued shares of capital stock of each Material
Subsidiary have been duly and validly authorized and issued and are
fully
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<PAGE> 9
paid and non-assessable, and (except for directors' qualifying shares
and shares held by third parties solely to satisfy local law
requirements and except as otherwise set forth in the Prospectus), to
the best of such counsel's knowledge after reasonable investigation and
except as set forth in a schedule to such counsel's opinion, all of such
shares of capital stock and 50% of the equity interests in Unimar are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims within the meaning of the
Uniform Commercial Code (such counsel being entitled to (A) state that
the opinion in this clause relating to the ownership of capital stock
and equity interests is based solely on a review of the corporate
records of the Company and its subsidiaries and the records of Unimar,
the certificate or certificates representing such shares of capital
stock and evidence of such equity interests in Unimar and a certificate
or certificates in respect of matters of fact as to ownership of and
liens, encumbrances, equities or claims on such shares of capital stock
and equity interests, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
certificate or certificates and (B) rely in respect of matters of fact
upon certificates of public officials or officers of the Company or its
subsidiaries furnished to you at such Time of Delivery, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such certificates);
(v) To the best of such counsel's knowledge after reasonable
investigation, other than as set forth in the Prospectus, there is no
pending or threatened action, suit or proceeding before any court or any
governmental agency or body or any arbitrator involving the Company, any
Material Subsidiary or Unimar required to be disclosed in the
Registration Statement that is not adequately disclosed therein;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein and
therein contemplated will not result in any violation of the Restated
Certificate of Incorporation or By-laws of the Company and, to the best
of such counsel's knowledge after reasonable investigation, such action
will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its Material Subsidiaries or, to the best of such
counsel's knowledge, Unimar is a party or by which the Company or any of
its Material Subsidiaries or, to the best of such counsel's knowledge,
Unimar is bound or to which any of the property or assets of the Company
or any of its Material Subsidiaries or, to the best of such counsel's
knowledge, Unimar is subject, or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company, any of its Material
Subsidiaries or, to the best of such counsel's knowledge, Unimar or any
of their properties (excluding breaches, violations and defaults that,
individually or in the aggregate, will not have any material adverse
effect on the general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the Company
and its subsidiaries taken as a whole);
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
having jurisdiction over the Company is required for the consummation by
the Company of the transactions contemplated by this Agreement, except
such as have been obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Preferred Stock by the Underwriters;
(ix) The statements made in the Prospectus and any amendment or
supplement thereto under the captions "Description of Series A Preferred
Stock" and "Certain United States Federal Income Tax Consequences"
insofar as such statements constitute summaries of the legal matters and
documents referred to therein, fairly present the information called for
with respect to such legal matters and documents and fairly summarize
such legal matters and documents;
(x) The documents incorporated by reference in the Prospectus or
any amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial
7
<PAGE> 10
statements and related schedules and engineering and statistical data
therein, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the published rules and
regulations of the Commission thereunder; and
(xi) The Registration Statement and the Prospectus and any
amendments and supplements thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
schedules and engineering and statistical data therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the published rules and
regulations of the Commission thereunder.
Such counsel shall state that, although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in any of the documents referred to in subclause (x) of this
Clause (c) or in the Registration Statement or the Prospectus (except as
and to the extent described in subclause (ix) of this Clause (c)), they
have no reason to believe that (i) any of the documents referred to in
subclause (x) of this Clause (c) when such documents became effective or
were so filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement of a
material fact, or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or, in
the case of other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact, or omitted to state
a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; or (ii) as of
its effective date, the Registration Statement or any amendment thereto
made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion or belief) contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that,
as of its date, the Prospectus or any amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion or belief) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the Registration
Statement or the Prospectus or any amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion or belief) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and they do not know of any amendment to the Registration
Statement required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus or any
amendment or supplement thereto or required to be described in the
Registration Statement or the Prospectus or any amendment or supplement
thereto which are not filed or incorporated by reference or described as
required.
In rendering the opinions referred to in subclauses (ii) (other than
with respect to authorized capitalization), (iii), (iv), (v), (vii) and
(viii) of this Clause (c), such counsel may rely upon an opinion of [Alan
R. Crain, Jr., Esq., Vice President and General Counsel] of the Company,
furnished to you at such Time of Delivery, provided that such counsel shall
state that they believe that both you and they are justified in relying
upon such opinion.
In rendering such opinion, such counsel may state that they expresses
no opinion as to the laws of any jurisdiction other than the Federal laws
of the United States, the laws of the State of New York and the State of
Texas and the General Corporation Law of the State of Delaware.
8
<PAGE> 11
(d) On the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also at each Time of Delivery, Price Waterhouse
shall have furnished to you a letter or letters, dated the respective date
of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto;
(e) (i) None of the Company or any of its subsidiaries or Unimar shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus, which loss or interference is material
to the Company and its subsidiaries taken as a whole, and (ii) since the
respective dates as of which information is given in the Prospectus there
shall not have been any change in the capital stock (other than (i) any
shares of capital stock of the Company sold upon the exercise of a
subscription, option or warrant or the conversion of a security outstanding
on the date of this Agreement, (ii) any shares of such capital stock, or
other securities convertible or exercisable or exchangeable for such
shares, in either case issued pursuant to any employee stock option or
benefit plan of the Company existing on the date of this Agreement and
(iii) stock repurchases in accordance with the Company's publicly announced
stock repurchase program) or any increase of more than $75,000,000 in the
consolidated short-term or long-term debt of the Company or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in Clause (i) or (ii), is in your judgment so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Preferred Stock being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Registration Statement or the Prospectus or any
amendment or supplement thereto;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities (other than Moody's Investors Services, Inc.'s
"negative outlook" on its rating of the Company's debt securities, which
outlook was publicly announced prior to the date hereof);
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war if the effect of any such event
specified in this Clause (iii) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Preferred Stock being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus or any supplement or amendment
thereto; and
(h) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of the Company (executed by
appropriate officers of the Company) satisfactory to you as to the accuracy
of the representations and warranties of the Company herein at and as of
such Time of Delivery, as to the performance by the Company of all of its
respective obligations hereunder to be performed at or prior to such Time
of Delivery, and as to such other matters as you may reasonably request,
and the Company shall have furnished or caused to be furnished certificates
as to the matters set forth in subsections (a) and (e) of this Section, and
as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or
9
<PAGE> 12
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus, the Registration Statement or the Prospectus, or any such amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through you expressly for use
therein; and provided, further, that the Company shall not be liable to any
Underwriter under the indemnity agreement in this subsection (a) with respect to
any preliminary prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Preferred Stock to a person as to whom it shall be established that there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus (excluding documents incorporated by reference) or of the
Prospectus as then amended or supplemented (excluding documents incorporated by
reference) in any case where such delivery is required by the Act if the Company
has previously furnished copies thereof to such Underwriter and the loss, claim,
damage or liability of such Underwriter results from an untrue statement or
omission of a material fact contained in the preliminary prospectus which was
corrected in the Prospectus (excluding documents incorporated by reference) or
in the Prospectus as then amended or supplemented (excluding documents
incorporated by reference).
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any preliminary
prospectus, the Registration Statement or the Prospectus, or any such amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by a party entitled to indemnification under
subsection (a) or (b) above (the "indemnified party") of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against a party required to provide indemnification to
such indemnified party under such subsection (the "indemnifying party"), notify
the indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such subsection.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (which shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. In no event shall an indemnifying party be liable for the fees
and expenses of more than one counsel (in addition to any local counsel), apart
from counsel to such indemnifying party, for all indemnified parties in
connection with any one action or separate but similar or related actions
arising out of
10
<PAGE> 13
the same general allegations or circumstances. No indemnifying party shall be
liable for any settlement of any such action effected without its consent,
provided that such consent is not unreasonably withheld or delayed.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Preferred Stock. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Preferred Stock purchased
under this Agreement (before deducting expenses) received by the Company on the
one hand bear to the total underwriting discounts and commissions received by
the Underwriters on the other with respect to the Preferred Stock purchased
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus as amended or supplemented on the date hereof. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Preferred Stock underwritten by it and distributed to the public was offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Preferred Stock which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties to
purchase such Preferred Stock on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Preferred Stock, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Preferred Stock on such
terms. In the event that, within the respective prescribed periods, you notify
the Company that you have so arranged for the purchase of such
11
<PAGE> 14
Preferred Stock, or the Company notifies you that it has so arranged for the
purchase of such Preferred Stock, you or the Company shall have the right to
postpone such Time of Delivery for a period of not more than seven days in order
to effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or any amendment or supplement thereto, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the then supplemented or amended
Prospectus which in your opinion and the opinion of the Company may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section 9 with like effect as if such person
had originally been a party to this Agreement with respect to such Preferred
Stock.
(b) If, after giving effect to any arrangements for the purchase of the
Preferred Stock of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such shares
of Preferred Stock which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the shares of Preferred Stock to be purchased at such
Time of Delivery, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of shares of Preferred Stock
which such Underwriter agreed to purchase hereunder at such Time of Delivery
and, in addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the number of shares of Preferred Stock which such
Underwriter agreed to purchase hereunder) of the Preferred Stock of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Preferred Stock of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such shares
of Preferred Stock which remains unpurchased exceeds one-eleventh of the
aggregate number of all the shares of Preferred Stock to be purchased at such
Time of Delivery, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Preferred Stock of a defaulting Underwriter or Underwriters, then this Agreement
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Preferred Stock.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall have no liability to any Underwriter except as provided in Section
6 and Section 8 hereof; but, if for any other reason any Preferred Stock is not
delivered by or on behalf of the Company as provided herein, the Company will
reimburse the Underwriters through you for all of their out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Preferred Stock not so delivered, but the Company shall
then be under no further liability to any Underwriter in respect of the
Preferred Stock not so delivered except as provided in Section 6 and Section 8
hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to Merrill Lynch, North Tower, World Financial Center,
New York, N.Y. 10281, Attention: [Registration Department]; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the
12
<PAGE> 15
Registration Statement, Attention: Secretary; [provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request]. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters and the Company and, to the extent provided in Sections 8
and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any
Preferred Stock from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us nine counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among each of the Underwriters and the Company.
Very truly yours,
UNION TEXAS PETROLEUM
HOLDINGS, INC.
By:
---------------------------------
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
----------------------------------------------
Authorized Signatory
[SALOMON BROTHERS INC]
By:
----------------------------------------------
Authorized Signatory
13
<PAGE> 16
SCHEDULE A
<TABLE>
<CAPTION>
TOTAL NUMBER
OF SHARES OF
PREFERRED STOCK
UNDERWRITER TO BE PURCHASED
----------- ---------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated..........
[Salomon Brothers Inc]......................................
---------
Total.......................................................
=========
</TABLE>
<PAGE> 17
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and financial statement
schedules provided pursuant to Article 12 of Regulation S-X audited by them and
incorporated by reference in the Registration Statement or the Prospectus comply
as to form in all material respects with the applicable accounting requirements
of the Act or the Exchange Act, as applicable, and the applicable related
published rules and regulations thereunder with respect to Registration
Statements on Form S-3; and they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
consolidated interim financial statements for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements referred to below, a reading of the latest
available interim financial data of the Company and its subsidiaries, a reading
of the minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters regarding the specified items
for which representations are requested below, nothing came to their attention
as a result of the foregoing procedures that caused them to believe that:
(A) the unaudited condensed consolidated statements of operations,
consolidated balance sheets and consolidated statements of cash flows
included in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act as
it applies to Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted accounting
principles, when read in conjunction with the audited financial statements
and notes thereto incorporated by reference in the Registration Statement,
applied on a basis substantially consistent with the basis for the audited
consolidated statements of operations, consolidated balance sheets and
consolidated statements of cash flows included in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(B) at the date of the latest available interim financial data and at
a specified date not more than five days prior to the date of such letter,
there have been any changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the date of
the latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated short-term or long-term
debt of the Company and its subsidiaries, or any decreases in consolidated
net current assets (working capital) or stockholders' equity or other items
heretofore determined with the Underwriters, or any increases in any items
heretofore determined with the Underwriters, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(C) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (B) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items heretofore determined with the
Underwriters or any increases in any items heretofore determined with the
Underwriters, in each case as compared with the comparable period of the
preceding
<PAGE> 18
year, except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference) or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Underwriters or in documents incorporated by reference in the Prospectus
specified by the Underwriters, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
2
<PAGE> 19
ANNEX II
MATERIAL SUBSIDIARIES
Union Texas Petroleum Energy Corporation
Union Texas International Corporation
Union Texas East Kalimantan Limited
Union Texas Pakistan, Inc.
Union Texas Petroleum Limited
Unistar, Inc.
Union Texas Britannia Limited
Union Texas Finance, Inc.
[others]
<PAGE> 1
EXHIBIT 4.9
FORM OF CERTIFICATE OF DESIGNATION
% SERIES A CUMULATIVE PREFERRED STOCK
<PAGE> 2
CERTIFICATE OF DESIGNATION
% SERIES A CUMULATIVE PREFERRED STOCK
OF
UNION TEXAS PETROLEUM HOLDINGS, INC.
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Union Texas Petroleum Holdings, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Company"), does
by its Vice President and Chief Financial Officer and under its corporate seal
hereby certify as follows:
FIRST: That pursuant to the first paragraph of Article Fourth of the
Restated Certificate of Incorporation of the Company as presently in effect (the
"Charter"), the shares of stock which the Company may issue are as follows:
"The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is Two Hundred Fifteen Million
(215,000,000), of which Fifteen Million (15,000,000) shares shall be
Preferred Stock of the par value one cent ($.01) per share and Two Hundred
Million (200,000,000) shares shall be Common Stock of the par value of five
cents ($.05) per share."
SECOND: That the Board of Directors (the "Board") of the Company has the
authority to issue preferred stock in one or more series and to fix and
determine the relative rights and preferences of the shares of any series of
preferred stock so established and the number of shares constituting any series
of preferred stock without any further actions by shareholders of the Company.
THIRD: That pursuant to the authority so vested in the Board by the
Charter, the Board duly adopted the following resolutions (the "Resolutions"):
RESOLVED, that pursuant to the authority conferred upon the Board by
the Company's Restated Certificate of Incorporation, as amended (the
"Charter"), the Board does hereby authorize the issuance of one or more
series of Preferred Stock, consisting of shares of the presently authorized
but unissued shares of Preferred Stock, in such amount as shall not exceed
the authorized number of shares of Preferred Stock pursuant to the terms of
the Charter (the "Authorized Preferred Stock");
RESOLVED, that the Pricing Committee is hereby authorized and
empowered, for and on behalf of the Company, to determine, establish and
approve . . . the designations, powers, preferences and rights of the
shares of one or more series of Authorized Preferred Stock, and the
qualifications, limitations or restrictions thereon, such terms to be
consistent in all respects with the provisions of the Charter and these
resolutions, including, without limitation, to determine the amount,
designation and denomination of such Authorized Preferred Stock to be
issued . . . and the dividend rights, participation rights, dividend rates,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), liquidation preferences and other terms of such
Authorized Preferred Stock."
FOURTH: That pursuant to the authority so vested in the Pricing Committee
by the Resolutions, the Pricing Committee duly adopted the following resolution:
"RESOLVED, that a series of the class of Authorized Preferred Stock,
$.01 par value per share, of the Company be hereby created, and that the
designation and amount thereof and the preferences and
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<PAGE> 3
relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restriction thereof are
as follows:
SECTION 1
DESIGNATION
The shares of such series shall be designated as the " % Series A
Cumulative Preferred Stock" (the "Series A Preferred Stock") and the number of
shares constituting such series shall be , which number may be
increased or decreased by the Board of Directors or the Pricing Committee
without a vote of stockholders; provided, however, that such number may not be
decreased below the number of then currently outstanding shares of Series A
Preferred Stock.
SECTION 2
RANK
The Series A Preferred Stock will, with respect to dividend rights and
rights upon liquidation, dissolution or winding up of the affairs of the
Company, rank (i) senior to all classes or series of common stock of the
Company, and to all equity securities ranking junior to the Series A Preferred
Stock with respect to dividend rights or rights upon liquidation, dissolution or
winding up of the affairs of the Company, (ii) on a parity with all equity
securities issued by the Company the terms of which specifically provide that
such equity securities rank on a parity with the Series A Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the affairs of the Company, and (iii) junior to all equity securities issued
by the Company the terms of which specifically provide that such equity
securities rank senior to the Series A Preferred Stock with respect to dividend
rights or rights upon liquidation, dissolution or winding up of the affairs of
the Company. The term "equity securities" does not include any convertible debt
securities, which could rank senior to the Series A Preferred Stock prior to
conversion of such debt securities.
SECTION 3
DIVIDENDS
Holders of shares of the Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds of the
Company legally available for the payment of dividends, cumulative cash
dividends at the rate of % of the liquidation preference per share of
Series A Preferred Stock (equivalent to $ per annum per share of Series
A Preferred Stock). Such dividends shall accrue and be cumulative from the date
of original issue and shall be payable quarterly in arrears on the last day of
each March, June, September and December, or, if such date is not a business
day, the succeeding business day (each, a "Dividend Payment Date"). The first
dividend on the Series A Preferred Stock, if declared, will be paid on
, 1998. Any dividend payable on the Series A Preferred Stock for
any partial dividend period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends will be payable to holders of
record as they appear in the records of the Company at the close of business on
the applicable record date, which shall be the 15th day of the calendar month in
which the applicable Dividend Payment Date falls or on such other date
designated by the Board of Directors of the Company for the payment of dividends
that is not more than 30 nor less than 10 days prior to such Dividend Payment
Date (each, a "Dividend Record Date").
No dividends on shares of Series A Preferred Stock shall be declared by the
Board of Directors or paid or set apart for payment by the Company at such time
as the terms and provisions of any agreement of the Company, including any
agreement relating to its indebtedness, prohibits such declaration, payment or
setting apart for payment or provides that such declaration, payment or setting
apart for payment would constitute a breach thereof or a default thereunder, or
if such declaration or payment shall be prohibited by law.
Notwithstanding the foregoing, dividends on shares of Series A Preferred
Stock will accrue whether or not the Company has earnings, whether or not there
are funds legally available for the payment of such
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<PAGE> 4
dividends and whether or not such dividends are declared. Accrued but unpaid
dividends on shares of Series A Preferred Stock will not bear interest and
holders of shares of Series A Preferred Stock will not be entitled to any
dividends in excess of full cumulative dividends described above.
Any dividend payment made on the Series A Preferred Stock shall first be
credited against the earliest accumulated but unpaid dividend due with respect
to such shares that remains payable.
No full dividends shall be declared or paid or set apart for payment on any
capital stock of the Company ranking, as to dividends, on a parity with or
junior to the Series A Preferred Stock (other than a dividend in shares of any
class of stock ranking junior to the Series A Preferred Stock as to dividends
and upon liquidation, dissolution or winding up of the affairs of the Company
("Junior Stock") for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment on the Series A Preferred Stock
for all past dividend periods and the then current dividend period. When
dividends are not paid in full (or a sum sufficient for such full payment is not
so set apart) upon the Series A Preferred Stock and the shares of any other
series of preferred stock ranking on a parity as to dividends with the Series A
Preferred Stock, all dividends declared upon the Series A Preferred Stock and
any other series of preferred stock ranking on a parity as to dividends with the
Series A Preferred Stock shall be declared pro rata so that the amount of
dividends declared per share of Series A Preferred Stock and such other series
of preferred stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the Series A Preferred Stock and such other
series of preferred stock (which shall not include any accrual in respect of
unpaid dividends for prior dividend periods if such preferred stock does not
have a cumulative dividend) bear to each other.
Except as provided in the immediately preceding paragraph, unless full
cumulative dividends on the Series A Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, no dividends (other than a dividend in shares of
any Junior Stock) shall be declared or paid or set aside for payment nor shall
any other distribution be declared or made upon the common stock, any other
capital stock of the Company ranking on a parity with the Series A Preferred
Stock as to dividends or upon liquidation, dissolution or winding up of the
affairs of the Company ("Parity Stock") or Junior Stock nor shall any shares of
common stock, Parity Stock or Junior Stock be redeemed, purchased or otherwise
acquired for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such shares of any such stock) by the
Company, except by conversion into or exchange for other Junior Stock.
If, prior to 18 months after the date of the original issuance of the
Series A Preferred Stock, one or more amendments to the Internal Revenue Code of
1986, as amended (the "Code"), are enacted that change the percentage of the
dividends received deduction for certain corporations (currently 70%) as
specified in Section 243(a)(1) of the Code or any successor provision (the
"Dividends Received Percentage"), the amount of each dividend payable (if
declared) per share of Series A Preferred Stock for dividend payments made on or
after the date of enactment of such change shall be adjusted by multiplying the
amount of the dividend payable described above (before adjustment) by the
following fraction (the "DRD Formula"), and rounding the result to the nearest
cent (with one-half cent and above rounded up):
1-.35 (1-.70)
------------------
1-.35 (1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage (expressed as a decimal) applicable to the dividend in question;
provided, however, that if the Dividends Received Percentage applicable to the
dividend in question shall be less than 50%, then the DRP shall equal .50. No
amendment to the Code, other than a change in the percentage of the dividends
received deduction set forth in Section 243(a)(1) of the Code or any successor
provision thereto, will give rise to an adjustment. Notwithstanding the
foregoing provisions, if, with respect to any such amendment, the Company
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by the Company or a private letter ruling or similar form of
authorization from the Internal Revenue Service ("IRS") to the effect that such
amendment does not apply to a dividend payable on the Series A Preferred Stock,
then such
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<PAGE> 5
amendment will not result in the adjustment provided for pursuant to the DRD
Formula with respect to such dividend. The opinion referenced in the previous
sentence shall be based upon a specific exemption in the legislation amending
the DRP or upon a public pronouncement of the IRS addressing such legislation.
The Company's calculation of the dividends payable, as so adjusted and as
certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the Company,
shall be final and not subject to review absent manifest error.
Notwithstanding the foregoing, if any such amendment to the Code is enacted
after the dividend payable on a Dividend Payment Date has been declared, the
amount of the dividend payable on such Dividend Payment Date will not be
increased; instead, additional dividends (the "Post-Declaration Date Dividends")
equal to the excess, if any, of (x) the product of the dividend paid by the
Company on such Dividend Payment Date and the DRD Formula (where the DRP used in
the DRD Formula would be equal to the greater of the Dividend Received
Percentage applicable to the dividend in question and .50) over (y) the dividend
paid by the Company on such Dividend Payment Date, shall be payable, out of
funds legally available therefore, (if declared) to holders of Series A
Preferred Stock on the record date applicable to the next succeeding Dividend
Payment Date or, if the Series A Preferred Stock is called for redemption prior
to such record date, to holders of Series A Preferred Stock on the applicable
redemption date, as the case may be, in addition to any other amounts payable on
such date.
Notwithstanding the foregoing, no adjustments in the dividends payable by
the Company shall be made, and no Post-Declaration Date Dividends shall be
payable by the Company, in respect of the enactment of any amendments to the
Code 18 months or more after the date of original issuance of the Series A
Preferred Stock that changes the Dividend Received Percentage.
In the event that the amount of dividends payable per share of the Series A
Preferred Stock is adjusted pursuant to the DRD Formula and/or any
Post-Declaration Date Dividends are to be paid, the Company will give notice of
such adjustment, and, if applicable, of any Post-Declaration Date Dividends to
the holders of Series A Preferred Stock.
In the event that the Dividends Received Percentage is reduced to 50% or
less, the Company may, at its option, redeem the Series A Preferred Stock in
whole but not in part as described below.
SECTION 4
REDEMPTION
The Series A Preferred Stock is not redeemable prior to March , 2008,
except under certain limited circumstances as described below. On and after
March , 2008, the Company, at its option upon not less than 30 nor more than
60 days' written notice, may redeem shares of the Series A Preferred Stock, in
whole or in part, at any time or from time to time, for cash at a redemption
price of $100.00 per share, plus an amount equal to all accrued and unpaid
dividends (whether or not declared) thereon, if any, to the date fixed for
redemption, without interest, to the extent the Company has funds legally
available therefor. The redemption price shall be paid out of any assets of the
Company including, without limitation, proceeds of other capital stock of the
Company, which may include shares of other series of preferred stock. For
purposes of the preceding sentence, "capital stock" means any common stock,
preferred stock, depositary shares, interests, participation or other ownership
interests (however designated) and any other rights (other than debt securities
convertible into or exchangeable for equity securities) or options to purchase
any of the foregoing. Holders of Series A Preferred Stock to be redeemed shall
surrender such Series A Preferred Stock at the place designated in such notice
and shall be entitled to the redemption price and any accrued and unpaid
dividends payable upon such redemption following such surrender. If notice of
redemption of any shares of Series A Preferred Stock has been given and if the
funds necessary for such redemption have been set aside by the Company in trust
for the benefit of the holders of any shares of Series A Preferred Stock so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such shares of Series A Preferred Stock, such shares of
Series A Preferred Stock shall no longer be deemed outstanding and all rights of
the holders of such shares will terminate, except the right to receive the
redemption price.
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<PAGE> 6
Notwithstanding the preceding paragraph, if, at any time while the Series A
Preferred Stock is outstanding, an enactment of an amendment to the Code results
in a reduction of the Dividends Received Percentage to 50% or less (whether or
not any dividend adjusted pursuant to the DRD Formula or any Post-Declaration
Date Dividend is then payable as described above), the Company, at its option,
may redeem all, but not less than all, of the outstanding shares of the Series A
Preferred Stock provided that, within 60 days of the date on which an amendment
to the Code is enacted which changes the Dividends Received Percentage to 50% or
less, the Company sends notice to holders of the Series A Preferred Stock of
such redemption. Any redemption of the Series A Preferred Stock pursuant to this
paragraph will take place on the date specified in the notice, which date shall
not be less than 30 nor more than 60 days from the date such notice is sent to
holders of the Series A Preferred Stock. Any redemption of the Series A
Preferred Stock in accordance with this paragraph shall be on notice as
aforesaid at the applicable redemption price set forth in the following table,
in each case plus an amount equal to accrued and unpaid dividends (whether or
not declared) thereon to the date fixed for redemption, including any changes in
dividends payable due to changes in the Dividends Received Percentage, if any.
Holders of the Series A Preferred Stock will have no right to require redemption
of the Series A Preferred Stock.
<TABLE>
<CAPTION>
REDEMPTION
REDEMPTION PERIOD PRICE PER SHARE
- ----------------- ---------------
<S> <C>
March , 1998 to March , 1999 $105.00
March , 1999 to March , 2000 $104.50
March , 2000 to March , 2001 $104.00
March , 2001 to March , 2002 $103.50
March , 2002 to March , 2003 $103.00
March , 2003 to March , 2004 $102.50
March , 2004 to March , 2005 $102.00
March , 2005 to March , 2006 $101.50
March , 2006 to March , 2007 $101.00
March , 2007 to March , 2008 $100.50
On or after March , 2008 $100.00
</TABLE>
If less than all of the outstanding Series A Preferred Stock is to be
redeemed, other than as described in the immediately preceding paragraph, the
Series A Preferred Stock to be redeemed shall be selected pro rata (as nearly as
may be practicable without creating fractional shares) or by any other equitable
method determined by the Company.
Notwithstanding the foregoing, unless full cumulative dividends on all
shares of Series A Preferred Stock shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period, then (i) no shares of Series A Preferred Stock shall be redeemed unless
all outstanding shares of Series A Preferred Stock are simultaneously redeemed,
and (ii) the Company shall not purchase or otherwise acquire directly or
indirectly any shares of Series A Preferred Stock (except by exchange for Junior
Stock) provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of Series A Preferred Stock pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
Series A Preferred Stock. So long as no dividends are in arrears, the Company
shall be entitled at any time and from time to time to repurchase shares of
Series A Preferred Stock in open-market transactions duly authorized by the
Board of Directors and effected in compliance with applicable laws.
Notice of any redemption will be given by publication in a newspaper of
general circulation in the Borough of Manhattan, the City of New York, such
publication to be made not less than 30 nor more than 60 days prior to the
redemption date. A similar notice of redemption furnished by the Company will be
mailed, postage prepaid, not less than 30 nor more than 60 days prior to the
redemption date, addressed to the respective holders of record of the Series A
Preferred Stock to be redeemed at their respective addresses as they appear on
the stock transfer records of the transfer agent. In order to facilitate the
redemption of shares of Series A Preferred Stock, the Board of Directors may fix
a record date for the determination of the shares to
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<PAGE> 7
be redeemed, and such record date will be not more than 60 days nor less than 30
days prior to the redemption date.
No failure to give such notice or any defect therein or in the mailing
thereof shall affect the validity of the proceedings for the redemption of any
shares of Series A Preferred Stock except as to the holder to whom notice was
defective or not given. Each notice shall state the following: (i) the
redemption date; (ii) the redemption price; (iii) the number of shares of Series
A Preferred Stock to be redeemed; (iv) the place or places where the Series A
Preferred Stock is to be surrendered for payment of the redemption price; and
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date. If less than all of the Series A Preferred Stock held by any
holder is to be redeemed, the notice mailed to such holder shall also specify
the number of shares of Series A Preferred Stock held by such holder to be
redeemed.
If notice of redemption of any Series A Preferred Stock has been given and
if the funds necessary for such redemption have been set aside by the Company in
trust for the benefit of the holders of Series A Preferred Stock so called for
redemption, then from and after the redemption date dividends will cease to
accrue on such Series A Preferred Stock, such shares of Series A Preferred Stock
shall no longer be deemed outstanding and all rights of the holders of such
shares will terminate, except the right to receive the redemption price.
SECTION 5
REACQUIRED SHARES
Any shares of Series A Preferred Stock redeemed, purchased or otherwise
acquired by the Company in any manner whatsoever shall be retired promptly after
the acquisition thereof. All such shares shall upon their retirement and the
filing of a proper certificate with the Delaware Secretary of State become
authorized but unissued shares of preferred stock, $.01 par value, of the
Company and may be reissued as part of another series of preferred stock, $.01
par value, of the Company subject to the conditions or restrictions on issuance
set forth herein, in the Charter, in any other Certificate of Designation
creating a series of preferred stock or any similar stock or as otherwise
required by law.
SECTION 6
LIQUIDATION
Upon any liquidation, dissolution or winding up of the affairs of the
Company, the holders of shares of Series A Preferred Stock are entitled to be
paid out of the assets of the Company legally available for distribution to its
shareholders a liquidation preference of $100.00 per share, plus an amount equal
to any accrued and unpaid dividends to the date of payment, before any
distribution of assets is made to holders of Common Stock or any other class or
series of capital stock of the Company that ranks junior to the Series A
Preferred Stock as to liquidation rights. If, upon any liquidation, dissolution
or winding up of the affairs of the Company, the assets of the Company, or
proceeds therefrom, distributable among the holders of the shares of the Series
A Preferred Stock and any shares of Parity Stock shall be insufficient to pay in
full the respective liquidation preferences, plus any accrued and unpaid
dividends thereon, of such shares of Series A Preferred Stock and Parity Stock,
then such assets, or the proceeds therefrom, shall be distributable among such
holders of Series A Preferred Stock and Parity Stock pro rata so that the
distributed amounts paid in respect of such Series A Preferred Stock and Parity
Stock shall in all cases bear to each other the same ratio that the respective
liquidation preferences on the Series A Preferred Stock and the Parity Stock
bear to each other. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series A Preferred
Stock will have no right or claim to any of the remaining assets of the Company.
The consolidation or merger of the Company with or into any other entity or the
sale, lease, transfer or conveyance of all or substantially all of the property
or business of the Company shall not be deemed to constitute a liquidation,
dissolution or winding up of the affairs of the Company.
6
<PAGE> 8
SECTION 7
VOTING RIGHTS
Holders of the Series A Preferred Stock will not have any voting rights,
except as set forth below or as otherwise from time to time required by law.
Whenever dividends on any shares of Series A Preferred Stock shall be in
arrears for six or more consecutive quarterly periods, the holders of such
shares of Series A Preferred Stock (voting separately as a class with all other
series of preferred stock upon which like voting rights have been conferred and
are exercisable) will be entitled to vote for the election of a total of two
additional directors of the Company at a special meeting called by the holders
of record of at least 25% of the Series A Preferred Stock or the holders of any
other series of preferred stock so in arrears (unless such request is received
less than 90 days before the date fixed for the next annual or special meeting
of shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until all dividends accumulated on such shares of
Series A Preferred Stock for the past dividend periods and the dividend for the
then current dividend period shall have been fully paid or declared and a sum
sufficient for the payment thereof set aside for payment. In such case, the
entire Board of Directors of the Company will be increased by two directors.
Directors elected by the holders of Series A Preferred Stock may be removed
without cause by, and shall not be removed without cause except by, the vote of
holders of Series A Preferred Stock and all other series of preferred stock with
currently exercisable like voting rights, voting together as a single class
without regard to series, at a special meeting called by the holders of record
of at least 25% of the Series A Preferred Stock or the holders of any other
series of preferred stock with currently exercisable like voting rights or at an
annual meeting of shareholders. So long as the rights of the holders of the
Series A Preferred Stock to vote for directors continue, any vacancy in such
additional director positions may be filled either by the vote of such holders
at a meeting held pursuant to the provisions above or by an instrument signed in
writing by the remaining additional director and filed with the Company. The
term of office of all directors elected by the holders of Series A Preferred
Stock shall terminate immediately upon the termination of the right of the
holders of preferred stock to vote for directors.
So long as any shares of Series A Preferred Stock remain outstanding, the
Company shall not, without the consent or the affirmative vote of the holders of
at least a majority of the shares of Series A Preferred Stock outstanding at the
time given in person or by proxy, either in writing or at a meeting (such Series
A Preferred Stock voting separately as a class) (i) authorize, create or issue
or increase the authorized or issued amount of any series of stock ranking
senior to such Series A Preferred Stock with respect to payment of dividends, or
the distribution of assets on liquidation, dissolution or winding up of the
affairs of the Company, or reclassify any authorized stock of the Company into
any such shares, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such shares or (ii)
repeal, amend or otherwise change the provisions of the Company's Charter or the
Certificate of Designation applicable to the Series A Preferred Stock, whether
by merger, consolidation or otherwise, (an "Event") so as to materially and
adversely affect the powers, preferences, voting power or other rights or
privileges of the Series A Preferred Stock; provided, however, upon the
occurrence of an Event, so long as the Series A Preferred Stock remains
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Company may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of holders
of Series A Preferred Stock and, provided further, that any increase in the
amount of the Authorized Preferred Stock or the creation or issuance of other
series of Preferred Stock, or any increase in the amount of authorized shares of
such series or of any other series of preferred stock, in each case ranking on a
parity with or junior to the Series A Preferred Stock, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Series A Preferred Stock shall have been
redeemed or called for redemption upon proper notice and sufficient funds shall
have been deposited in trust to effect such redemption.
7
<PAGE> 9
Except as expressly stated in this Certificate of Designation or as
required by law, the Series A Preferred Stock shall not have any relative,
participating, optional or other special voting rights, and the consent of the
holders thereof shall not be required for the taking of any corporate action,
including but not limited to, any merger or consolidation involving the Company
or a sale of all or substantially all of the assets of the Company, irrespective
of the effect that such merger, consolidation or sale may have upon the rights,
preferences or voting power of the holders of the Series A Preferred Stock.
SECTION 8
MATURITY
The Series A Preferred Stock has no stated maturity and will not be subject
to any sinking fund or mandatory redemption.
SECTION 9
MISCELLANEOUS
The headings of the various Sections and subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
FIFTH: That said resolution of the Pricing Committee, and the authorization
of issuance of the Series A Preferred Stock and the determination thereby of the
provisions with respect to dividends and voting rights of Series A Preferred
Stock and the rights of holders of Series A Preferred Stock upon liquidation of
the Company, were duly made by the Pricing Committee pursuant to authority and
in accordance with the Resolutions and Section 141(c) of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Certificate of Designation
of % Series A Cumulative Preferred Stock to be duly executed by its Vice
President and Chief Financial Officer this day of March , 1998.
UNION TEXAS PETROLEUM
HOLDINGS, INC.
By:
------------------------------------
Larry D. Kalmbach
Vice President and Chief
Financial Officer
8
<PAGE> 1
EXHIBIT 4.12
FORM OF % SERIES A
CUMULATIVE PREFERRED STOCK CERTIFICATE
<PAGE> 2
FORM OF % SERIES A
CUMULATIVE PREFERRED STOCK
CERTIFICATE
This Preferred Security is a Global Certificate and is registered in the
name of The Depository Trust Company (55 Water Street, New York, New York) (the
"Depositary") or a nominee of the Depositary. This Preferred Security is
exchangeable for Preferred Security registered in the name of a person other
than the Depositary or its nominee only in limited circumstances and no transfer
of this Preferred Security (other than a transfer of this Preferred Security as
a whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of the Depositary to the Company or its agent for registration of transfer,
exchange or payment, and any Preferred Security issued is registered in the name
of Cede & Co. or such other name as requested by an authorized representative of
the Depositary and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
because the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number
--------------------------------------------------------------
Number of Shares of Preferred Stock
---------------------------------------------
CUSIP NO.
-----------------------------------------------------------------------
Certificate Evidencing Shares of Preferred Stock
of
UNION TEXAS PETROLEUM HOLDINGS, INC.
[ ]% Series A Cumulative Preferred Stock
(Par Value $.01 Per Share)
(Liquidation Preference Equivalent To $100.00 Per Share)
UNION TEXAS PETROLEUM HOLDINGS, INC., a corporation formed under the laws
of the State of Delaware (the "Company"), hereby certifies that (the
"Holder") is the registered owner of shares of preferred stock of the Company
representing undivided beneficial interests in the assets of the Company
designated the [ ]% Series A Cumulative Preferred Stock (par value $.01 per
share and liquidation preference equivalent to $100.00 per share) (the
"Shares"). The Shares are transferable on the books and records of the Company,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Shares represented hereby are issued and shall in all respects be subject to the
provisions of the Certificate of Designation filed with the Secretary of State
of Delaware on March , 1998 (the "Designation"). Capitalized terms used herein
but not defined shall have the meaning given them in the Designation. The
Company will provide a copy of the Designation to a Holder without charge upon
written request to the Company at its principal place of business.
IN WITNESS WHEREOF, the Company has executed this certificate this day
of March 1998.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By:
-------------------------------------
Name:
Title:
<PAGE> 3
FORM OF REVERSE OF SECURITY
Holders of Shares shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds of the Company legally available therefor,
cumulative cash dividends at the rate of % of the liquidation preference
per Share (equivalent to $ per annum per Share). Such dividends shall
accrue and be cumulative from the date of original issue and shall be payable
quarterly in arrears on the last day of each March, June, September and
December, or if such date is not a business day, the succeeding business day
(each, a "Dividend Payment Date"). The first dividend on the Shares, if
declared, will be paid on , 1998. Any dividend payable on the Shares
for any partial dividend period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends will be payable to holders of
record as they appear in the records of the Company at the close of business on
the applicable record date, which shall be the 15th day of the calender month in
which the applicable Dividend Payment Date falls or on such other date
designated by the Board of Directors of the Company for the payment of dividends
that is not more than 30 nor less than 10 days prior to such Dividend Payment
Date.
The Shares will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company, rank (i)
senior to all classes or series of common stock of the Company, and to all
equity securities ranking junior to the Shares with respect to dividend rights
or rights upon liquidation, dissolution or winding up of the affairs of the
Company, (ii) on a parity with all equity securities issued by the Company the
terms of which specifically provide that such equity securities rank on a parity
with the Shares with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the affairs of the Company, and (iii) junior to all
equity securities issued by the Company the terms of which specifically provide
that such equity securities rank senior to the Shares with respect to dividend
rights or rights upon liquidation, dissolution or winding up of the affairs of
the Company.
The Shares have no stated maturity and will not be subject to any sinking
fund or mandatory redemption. The Shares shall be redeemable as provided in the
Designation.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
<PAGE> 4
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ---------------------------------------------------------- agent to transfer
this Certificate on the books of the
Company. The agent may substitute another to act for him or her.
Date:
-----------------------------------------------
Signature:
------------------------------------------
(Sign exactly as your name appears on the other side of this Certificate)
[Signature Guarantee*:
-------------------------------------------
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.]
<PAGE> 1
EXHIBIT 5.1
OPINION OF KING & SPALDING
REGARDING LEGALITY OF SHARES OF
% SERIES A CUMULATIVE PREFERRED STOCK
<PAGE> 2
KING & SPALDING
1100 LOUISIANA, SUITE 3300
HOUSTON, TEXAS 77002
MARCH 2, 1998
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77056
Re: Union Texas Petroleum Holdings, Inc. --
Shelf Registration Statement on Form S-3 (333-31039)
Ladies and Gentlemen:
We have acted as counsel for Union Texas Petroleum Holdings, Inc., a
Delaware corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to the offering from time to time, as set forth in the prospectus
contained in the Registration Statement of the Company's securities in an
aggregate amount not to exceed $500,000,000 (the "Prospectus") and as set forth
in a supplement to the Prospectus (the "Prospectus Supplement"), of preferred
stock, par value $.01 per share ("Preferred Stock") of the Company, to be issued
by the Company.
In connection with this opinion, we have examined and relied upon such
records, documents, certificates and other instruments as in our judgment are
necessary or appropriate to form the basis for the opinions hereinafter set
forth. In all such examinations, we have assumed the genuineness of signatures
on original documents and the conformity to such original documents of all
copies submitted to us as certified, conformed or photographic copies, and as to
certificates of public officials, we have assumed the same to have been properly
given and to be accurate. As to matters of fact material to this opinion, we
have relied upon statements and representations of representatives of the
Company and of public officials.
This opinion is limited in all respects to the federal laws of the United
States of America, the laws of the States of Texas and New York and the General
Corporation Law of Delaware, and no opinion is expressed with respect to the
laws of any other jurisdiction or any effect which such laws may have on the
opinions expressed herein. This opinion is limited to the matters stated herein,
and no opinion is implied or may be inferred beyond the matters expressly stated
herein.
Based upon the foregoing, and the other limitations and qualifications set
forth herein, we are of the opinion that:
(i) The Company is a validly existing corporation under the laws of
the State of Delaware; and
(ii) Upon the due authorization of the issuance of shares of Preferred
Stock and the issuance and sale thereof as described in the Registration
Statement (together with the Prospectus Supplement), such shares will be
validly issued, fully paid and nonassessable.
With respect to the opinion set forth in paragraph (i) above concerning the
good standing of the Company, we have relied exclusively upon certificates of
officers of the Company and a certificate of the Secretary of State of Delaware.
The opinions set forth above are subject, as to enforcement, to (i)
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally, and
(ii) general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or law).
This opinion is given as of the date hereof, and we assume no obligation to
advise you after the date hereof of facts or circumstances that come to our
attention or changes in law that occur which could affect the opinions contained
herein. This letter is being rendered solely for the benefit of the Company in
connection
<PAGE> 3
with the matters addressed herein. This opinion may not be furnished to or
relied upon by any person or entity for any purpose without our prior written
consent.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the captions "Legal
Matters" in the Prospectus that is included in the Registration Statement and in
the Prospectus Supplement.
Very truly yours,
/s/ KING & SPALDING
King & Spalding
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
<PAGE> 2
EXHIBIT 12.1
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------
1993 1994 1995 1996 1997
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Pretax income....................................... $26,983 $211,983 $253,327 $379,039 $269,302
Fixed charges
Interest expense.................................. 30,506 28,721 50,379 49,858 46,850
Preferred Stock dividends of a subsidiary......... 1,681
Capitalized debt cost............................. 1,536 1,452 1,486 1,332 1,226
Interest portion of rent expenses................. 2,777 3,170 3,126 2,928 3,270
------- -------- -------- -------- --------
Total fixed charges......................... 36,500 33,343 54,991 54,118 51,346
Less: Capitalized interest, net..................... 4,623 1,464 4,845 8,690 27,270
------- -------- -------- -------- --------
31,877 31,879 50,146 45,428 24,076
Earnings before fixed charges....................... $58,860 $243,862 $303,473 $424,467 $293,378
======= ======== ======== ======== ========
Ratio of earnings to fixed charges.................. 1.61(1) 7.31 5.52 7.84 5.71(2)
</TABLE>
- ---------------
(1) During 1993, the Company recorded a non-cash charge to depreciation,
depletion and amortization of $103 million pretax ($48 million after-tax)
for the write-down of its investment in the U.K. North Sea's Piper field.
Excluding the effect of the Piper write-down, the ratio of earnings to fixed
charges for 1993 would have been 4.45.
(2) The 1997 pro forma ratio of earnings to combined fixed charges and preferred
stock dividends would be 4.64 as calculated below:
<TABLE>
<S> <C> <C> <C>
1997 fixed charges per above.............................. $51,346
Pro forma adjustments:
Preferred stock dividend requirements................ 9,131
Ratio of 1997 pretax income to net income............ 2.0
-----
Preferred stock dividend factor...................... 18,262
Estimated decrease in interest expense due to
refinancing....................................... (3,200)
-------
Total pro forma combined fixed charges and preferred
stock dividends...................................... $66,408
=======
Pro forma ratio of earnings to combined fixed charges
and preferred stock dividends........................ 4.64
=======
</TABLE>
The pro forma adjustments give effect to preferred stock dividends as a result
of the issuance of $125 million of the preferred stock at an assumed annual
dividend rate of 7.305% and the application of a portion of the proceeds to the
reduction of debt under the revolving credit facility and the uncommitted and
unsecured lines of credit, as if such transaction had taken place January 1,
1997. The pro forma ratio as a result of the issuance of up to $175 million of
the preferred stock would be 4.28, including a preferred stock dividend
requirement adjustment of $12.8 million.
