<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-31039
PROSPECTUS SUPPLEMENT
- ----------------------------------
(TO PROSPECTUS DATED JULY 24, 1997)
1,750,000 SHARES [UNION TEXAS PETROLEUM
HOLDINGS, INC. LOGO]
UNION TEXAS PETROLEUM HOLDINGS, INC.
7.14% SERIES A CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
(LIQUIDATION PREFERENCE EQUIVALENT TO $100.00 PER SHARE)
------------------------
Dividends on the 7.14% Series A Cumulative Preferred Stock, $.01 par value
per share (the "Series A Preferred Stock"), of Union Texas Petroleum Holdings,
Inc. (the "Company") will be cumulative from the date of original issue and will
be payable quarterly, in cash, when, as and if declared by the Board of
Directors of the Company, commencing March 31, 1998. If certain amendments to
the Internal Revenue Code of 1986, as amended (the "Code"), in respect of the
dividends received deduction are enacted within 18 months from the date of
original issue, the amount of dividends payable in respect of the Series A
Preferred Stock will be adjusted. See "Description of Series A Preferred
Stock -- Dividends."
The Series A Preferred Stock may not be redeemed prior to March 31, 2008,
except as described below. The Series A Preferred Stock will be redeemable as
provided herein at the option of the Company at any time on or after March 31,
2008, in whole or in part, at a redemption price of $100 per share, plus accrued
but unpaid dividends to the redemption date. The Series A Preferred Stock may
also be redeemed prior to March 31, 2008, in whole, at the option of the
Company, in the event of certain amendments to the Code in respect of the
dividends received deduction. See "Description of the Series A Preferred
Stock -- Redemption." No shares of Series A Preferred Stock are convertible into
any other securities. The proportionate liquidation preference of each share of
Series A Preferred Stock is $100.
The Company does not intend to list the shares of Series A Preferred Stock
on any securities exchange or include the Series A Preferred Stock on any
quotation system, and no active trading market is expected to develop for the
Series A Preferred Stock.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
==============================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------------------------------------
Per Share............................... $100 $2.00 $98.00
- --------------------------------------------------------------------------------------------------------------
Total................................... $175,000,000 $3,500,000 $171,500,000
==============================================================================================================
</TABLE>
(1) Plus accrued dividends, if any, from the date of original issue.
(2) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $200,000.
------------------------
The shares of Series A Preferred Stock offered hereby are offered severally
by the Underwriters, as specified herein, subject to receipt and acceptance by
them and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Series A Preferred Stock will be only in
book-entry form through the facilities of The Depository Trust Company, on or
about March 6, 1998.
------------------------
MERRILL LYNCH & CO. SALOMON SMITH BARNEY
------------------------
The date of this Prospectus Supplement is March 3, 1998
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THE OFFERING OF CERTAIN SECURITIES
HEREUNDER MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE
AFFECT THE PRICE OF THOSE SECURITIES, INCLUDING OVERALLOTMENT, STABILIZING AND
SHORT-COVERING TRANSACTIONS AND THE IMPOSITION OF PENALTY BIDS. SEE "PLAN OF
DISTRIBUTION" IN THE ACCOMPANYING PROSPECTUS.
USE OF PROCEEDS
The net proceeds from the sale of the Series A Preferred Stock offered
hereby are estimated to be approximately $171.3 million (after deducting
underwriting discounts and commissions and offering expenses). The Company
intends to use such proceeds to reduce a portion of the Company's debt under a
$450 million revolving credit agreement and certain uncommitted and unsecured
lines of credit incurred primarily in connection with the Company's acquisition
of interests in operating service contracts in Venezuela. On February 20, 1998,
the Company had a total of approximately $206 million outstanding under such
revolving credit agreement and lines of credit. At December 31, 1997, no amounts
were outstanding under the revolving credit agreement, and the lines of credit
bore interest at the weighted average rate of 6.9% per annum. The revolving
credit agreement has a final maturity date of March 31, 2002.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following are the ratios of earnings to combined fixed charges and
preferred stock dividends for each of the fiscal years in the five-year period
ended December 31, 1997:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
- -------------------------------------------------------
1993 1994 1995 1996 1997(1)
- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C>
1.61 7.31 5.52 7.84 5.71
</TABLE>
- ---------------
(1) Assuming the $175 million of Series A Preferred Stock offered hereby was
issued on January 1, 1997 and the estimated net proceeds therefrom were
applied as described in "Use of Proceeds," the pro forma ratio of earnings
to combined fixed charges and preferred stock dividends for the year ended
December 31, 1997 would be 4.31. Fixed charges as described below also
include the preferred stock dividend requirement adjustment for the pro
forma ratio.
Earnings, as used to calculate the ratio of earnings to combined fixed
charges and preferred stock dividends, consist of pretax income and fixed
charges (excluding interest capitalized during the period). Fixed charges
consist of interest expense, capitalized interest, amortization of discount and
financing costs and the portion of rent expense which is deemed to be
representative of the interest component of rent expense. There was no preferred
stock outstanding for any of the periods shown above.
DESCRIPTION OF SERIES A PREFERRED STOCK
The following description of the particular terms of the Series A Preferred
Stock offered hereby supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of Preferred Stock
set forth in the accompanying Prospectus, to which description reference is
hereby made.
GENERAL
The Company is authorized by its Charter to issue up to 15,000,000 shares
of preferred stock, $.01 par value per share, which may be issued from time to
time in one or more series, shall have such designations, voting powers,
preferences and rights of the shares of such series and, subject to the
provisions of the Charter applicable to all series of preferred stock, the
qualifications, limitations or restrictions thereon, including, but not limited
to, the fixing of the dividend rights, dividend rate or rates, conversion
rights, voting rights, and terms of redemption (including sinking fund
provisions), the redemption price or prices and liquidation
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<PAGE> 3
preferences, in each case, as the Board of Directors of the Company may
determine by adoption of an applicable certificate of designation, without any
further vote or action by the shareholders.
On March 3, 1998, a Certificate of Designation was adopted determining the
terms of the Series A Preferred Stock consisting of 1,750,000 shares, designated
7.14% Series A Cumulative Preferred Stock. The following summary of the terms
and provisions of the Series A Preferred Stock does not purport to be complete
and is qualified in its entirety by reference to the pertinent sections of the
Company's Charter and the Certificate of Designation designating the Series A
Preferred Stock, each of which is available from the Company.
The registrar, transfer agent and dividend and redemption price
disbursement agent in respect of the Series A Preferred Stock will be First
Chicago Trust Company of New York.
MATURITY
The Series A Preferred Stock has no stated maturity and will not be subject
to any sinking fund or mandatory redemption.
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. See "-- Voting Rights" below. 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.
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 7.14% of the liquidation preference per share of Series
A Preferred Stock (equivalent to $7.14 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 March 31, 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.
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<PAGE> 4
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 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)
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 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) shall be declared or paid or set aside for payment nor shall any other
distribution be declared or made upon common stock, or any other capital stock
of the Company ranking junior to or 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, nor shall any shares of common stock, or any other
shares of capital stock or the Company ranking junior to or 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, 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 capital stock of the
Company ranking junior to the Series A Preferred Stock as to dividends and upon
liquidation, dissolution or winding up of the affairs of the Company).
If, prior to 18 months after the date of the original issuance of the
Series A Preferred Stock, one or more amendments to 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
S-4
<PAGE> 5
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 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
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 (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. See "-- Redemption."
LIQUIDATION PREFERENCES
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 capital stock of the Company on a parity
with the Series A Preferred Stock upon liquidation, dissolution or winding up of
the affairs of the Company 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 such parity stock, then such assets, or
the proceeds therefrom, shall be distributable among such holders of Series A
Preferred Stock and capital stock of the Company on a parity with the Series A
Preferred Stock upon liquidation, dissolution or winding up of the affairs of
the Company pro rata so that the distributed amounts paid in respect of such
Series A Preferred Stock and such 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 such 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
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<PAGE> 6
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.
REDEMPTION
The Series A Preferred Stock is not redeemable prior to March 31, 2008,
except under certain limited circumstances as described below. On and after
March 31, 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, depository shares, interests, participation or other ownership
interests (however designated) and any 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 and accrued and unpaid dividends, if any, to the date fixed for
redemption.
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 PRICE
REDEMPTION PERIOD PER SHARE
----------------- ----------------
<S> <C>
March 6, 1998 to March 30, 1999............................ $105.00
March 31, 1999 to March 30, 2000............................ 104.50
March 31, 2000 to March 30, 2001............................ 104.00
March 31, 2001 to March 30, 2002............................ 103.50
March 31, 2002 to March 30, 2003............................ 103.00
March 31, 2003 to March 30, 2004............................ 102.50
March 31, 2004 to March 30, 2005............................ 102.00
March 31, 2005 to March 30, 2006............................ 101.50
March 31, 2006 to March 30, 2007............................ 101.00
March 31, 2007 to March 30, 2008............................ 100.50
On or after March 31, 2008.................................. 100.00
</TABLE>
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<PAGE> 7
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, (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 capital stock of
the Company ranking junior to the Series A Preferred Stock as to dividends and
upon liquidation); 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 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 and
accrued and unpaid dividends, if any, to the date fixed for redemption.
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
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<PAGE> 8
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 such
holders 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 or the holders thereof; provided,
however, upon the occurrence of any of the Events set forth in (ii) above, 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.
Except as expressly stated in the Certificate of Designation or as required
by law, the Series A Preferred Stock will 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.
CONVERSION
The Series A Preferred Stock is not convertible into or exchangeable for
any other property or securities of the Company.
S-8
<PAGE> 9
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The tax treatment of a holder of Series A Preferred Stock will vary
depending upon the holder's particular situation. Certain types of purchasers
subject to special treatment under the federal income tax laws include, without
limitation, life insurance companies, certain financial institutions,
broker-dealers, stockholders holding Series A Preferred Stock as part of a
conversion transaction, as part of a hedge or hedging transaction, or as a
position in a straddle for tax purposes, tax-exempt organizations, or foreign
corporations, foreign partnerships and persons who are not citizens or residents
of the United States. In addition to federal income tax considerations, foreign,
state, local or other tax laws may be applicable to prospective purchasers of
Series A Preferred Stock.
RECENT TAX PROPOSALS
On February 2, 1998, the Clinton Administration released a budget plan for
fiscal year 1999 that includes certain tax proposals (the "Proposals") that
could but are not expected to affect the federal income tax treatment of the
Series A Preferred Stock. The Proposals have not yet been introduced as
legislation and there can be no certainty that any of them will be enacted into
law. Under the Proposals, the dividends received deduction that is currently
available to certain corporations would be eliminated for dividends received in
respect of certain preferred stock issued after the date of enactment of the
legislation. Since the offering of the Series A Preferred Stock would be
completed prior to such enactment, if any, the Proposals would not affect the
holders of the Series A Preferred Stock.
PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
SALE OF SERIES A PREFERRED STOCK, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN
AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP AND SALE OR POTENTIAL
CHANGES IN APPLICABLE TAX LAWS.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
The Series A Preferred Stock will be issued in book-entry form in the form
of a single global stock certificate registered in the name of the Cede & Co.
("Cede") as nominee of The Depository Trust Company ("DTC," which term, as used
herein, includes any successor or alternate depository selected by the Company).
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Participants in DTC include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Series A Preferred Stock within the DTC system must be made by
or through Participants, which will receive a credit for the Series A Preferred
Stock on DTC's records. The ownership interest of each actual purchaser of
Series A Preferred Stock ("Beneficial Owner") is in turn recorded on the
Participants' and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial Owners
are expected to receive written confirmations providing details of the
S-9
<PAGE> 10
transactions, as well as periodic statements of their holdings, from the
Participants or Indirect Participants through which the Beneficial Owners
purchased Series A Preferred Stock. Transfers of ownership interests in the
Series A Preferred Stock are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in the Series A
Preferred Stock, except in the event that use of the book-entry system for the
Series A Preferred Stock is discontinued. Accordingly, each Beneficial Owner
must rely on the procedures of DTC to exercise any rights under the Series A
Preferred Stock.
To facilitate subsequent transfers, all Series A Preferred Stock deposited
by Participants with DTC is registered in the name of Cede. The deposit of
Series A Preferred Stock with DTC and its registration in the name of Cede
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Series A Preferred Stock. DTC's records reflect only
the identity of the Participants to whose accounts such Series A Preferred Stock
is credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Redemption notices shall be sent to DTC. If less than all of the
Series A Preferred Stock is being redeemed, DTC will reduce the amount of the
interest of each Participant in such Series A Preferred Stock in accordance with
its procedures.
Neither DTC nor Cede will consent or vote with respect to the Series A
Preferred Stock. Under its usual procedures, DTC would mail an omnibus proxy to
the Company as soon as possible after the record date. The omnibus proxy assigns
DTC's or Cede's consenting or voting rights to those Participants to whose
accounts the Series A Preferred Stock is credited on the record date (identified
in a listing attached to the omnibus proxy).
Dividends and other distributions on the Series A Preferred Stock in the
form of the global certificate will be made to DTC. DTC's practice is to credit
Participant's accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payments on such payment date. Payments by Participants and
Indirect Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in "street name," and such
payments will be the responsibility of such Participants and not of DTC or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of dividends and other distributions to DTC is the
responsibility of the Company, disbursement of such payments to Participants is
the responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants and Indirect Participants.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global certificate among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. The Company will not have any
responsibility for the performance by DTC or its Participants or Indirect
Participants under the rules and procedures governing DTC. DTC may discontinue
providing its services as securities depositary with respect to the Series A
Preferred Stock at any time by giving reasonable notice to the Company. Under
such circumstances, in the event that a successor securities depositary is not
obtained, Series A Preferred Stock in the form of physical certificates will be
delivered in exchange for beneficial interests in the global certificate.
Additionally, the Company may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor depositary) with respect to the
Series A Preferred Stock. In that event, certificates for the Series A Preferred
Stock will be printed and delivered.
The information in this Section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
S-10
<PAGE> 11
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), among Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Salomon Brothers Inc (collectively, the "Underwriters") and the Company, the
Company has agreed to sell to the Underwriters, and each of the Underwriters
severally and not jointly has agreed to purchase, the number of shares of Series
A Preferred Stock set forth opposite their names below. The Purchase Agreement
provides that the obligations of the Underwriters are subject to certain
conditions precedent, and that the Underwriters will be obligated to purchase
all of the shares of Series A Preferred Stock if any are purchased.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF SERIES A
UNDERWRITER PREFERRED STOCK
----------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... 1,225,000
Salomon Brothers Inc........................................ 525,000
---------
Total.......................................... 1,750,000
=========
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Series A Preferred Stock to the public at the public offering price
set forth on the cover page of this Prospectus Supplement and to certain dealers
at such price less a concession not in excess of $1.00 per share. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $.75 per share on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
The Company has agreed to indemnify the Underwriters against, or to
contribute to payments that the Underwriters may be required to make in respect
of, certain liabilities, including liabilities under the Securities Act of 1933,
as amended.
The Underwriters have performed services from time to time for the Company
in the ordinary course of business.
The Series A Preferred Stock is a new issue of securities with no
established trading market. The Company does not intend to list the shares of
Series A Preferred Stock on any securities exchange or include the Series A
Preferred Stock on any quotation system, and no active trading market for the
Series A Preferred Stock is expected to develop. Although each Underwriter has
advised the Company of an intention to make a market in the Series A Preferred
Stock, neither Underwriter will have any obligation to make a market in the
Series A Preferred Stock, and the Underwriters may cease market making
activities if commenced at any time. There can be no assurance that an active
trading market for the Series A Preferred Stock will develop.
Until the distribution of the Series A Preferred Stock is completed, rules
of the Securities and Exchange Commission may limit the ability of the
Underwriters and certain selling group members to bid for and purchase the
Series A Preferred Stock. As an exception to these rules, the Underwriters are
permitted to engage in certain transactions that stabilize the price of the
Series A Preferred Stock. Such transactions consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Series A Preferred
Stock.
If the Underwriters create a short position in the Series A Preferred Stock
in connection with the offering, i.e., if they sell more shares of Series A
Preferred Stock than are set forth on the cover page of this Prospectus
Supplement, the Underwriters may reduce that short position by purchasing shares
of Series A Preferred Stock in the open market.
S-11
<PAGE> 12
The Underwriters may also impose a penalty bid on certain selling group
members. This means that if the Underwriters purchase shares of Series A
Preferred Stock in the open market to reduce the Underwriters' short position or
to stabilize the price of the Series A Preferred Stock, they may reclaim the
amount of the selling concession from the selling group members who sold those
shares as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of the Series A Preferred Stock to the
extent that it were to discourage resales of the security.
Neither the Company nor either of the Underwriters makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Series A Preferred
Stock. In addition, neither the Company nor either of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
LEGAL MATTERS
The validity of the Series A Preferred Stock and certain legal matters
relating to the offering of the Series A Preferred Stock will be passed upon for
the Company by King & Spalding, Houston, Texas. Certain legal matters relating
to the offering of the Series A Preferred Stock will be passed upon for the
Underwriters by Simpson Thacher & Bartlett, New York, New York.
S-12
<PAGE> 13
PROSPECTUS [UNION TEXAS LOGO]
UNION TEXAS PETROLEUM HOLDINGS, INC.
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
Union Texas Petroleum Holdings, Inc. (the "Company") may offer from time to
time (i) its unsecured debt securities ("Debt Securities") consisting of
debentures, notes and/or other evidences of unsecured indebtedness in one or
more series, (ii) shares of its common stock, par value $.05 per share ("Common
Stock"), (iii) shares of its preferred stock, par value $.01 per share
("Preferred Stock"), which may be issued in the form of depositary shares
evidenced by depositary receipts ("Depositary Shares"), (iv) warrants to
purchase Common Stock, Preferred Stock, Debt Securities or any combination
thereof ("Warrants," and together with the Common Stock, Preferred Stock and
Debt Securities, "Securities") or (v) any combination of the foregoing, at an
aggregate initial offering price not to exceed $500,000,000, or its equivalent
if some or all of the Securities are denominated in one or more foreign
currencies, at prices and on terms to be determined at or prior to the time of
sale in light of market conditions at the time of sale.
Specific terms of the particular Securities in respect of which this
Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the terms
of the offering of the Securities and the initial price and the net proceeds to
the Company from the sale thereof. The Prospectus Supplement will set forth with
regard to the particular Securities, without limitation, the following: (i) in
the case of Debt Securities, the specific designation, aggregate principal
amount, ranking as senior debt or subordinated debt, authorized denomination,
maturity, rate or method of calculation of interest and dates for payment
thereof, any exchangeability, conversion, redemption, prepayment or sinking fund
provisions, the currency or currencies or currency unit or currency units in
which principal, premium, if any, or interest, if any, is payable, any
modifications of or additions to the covenants described in this Prospectus and
any other specific terms thereof; (ii) in the case of Preferred Stock, the
designation, number of shares, liquidation preference per share, initial public
offering price, dividend rate (or method of calculation thereof), dates on which
dividends will be payable and dates from which dividends will accrue, any
redemption or sinking fund provisions, any conversion or exchange rights, any
other relative rights and whether the Company has elected to offer fractional
interests in the Preferred Stock in the form of Depositary Shares evidenced by
depositary receipts; (iii) in the case of Common Stock, the number of shares of
Common Stock and the terms of the offering and sale thereof; and (iv) in the
case of Warrants, the number and terms thereof, the designation and the number
of Securities issuable upon their exercise, the exercise price, the terms of the
offering and sale thereof and, where applicable, the duration and detachability
thereof. The Company's obligations under the Debt Securities will not be
guaranteed by any of its subsidiaries. The amounts payable by the Company in
respect of Debt Securities may be calculated by reference to the value, rate or
price of one or more specified commodities, currencies or indices to the extent
set forth in the Prospectus Supplement. The Prospectus Supplement will also
contain information, where applicable, about certain United States federal
income tax considerations relating to the Securities covered by the Prospectus
Supplement.
The outstanding Common Stock is listed on the New York Stock Exchange and
the Pacific Exchange, Inc. under the symbol "UTH." Any Common Stock offered will
be listed, subject to notice of issuance, on such exchanges. The applicable
Prospectus Supplement will contain information about any listing of the other
Securities on a securities exchange.
The Company may sell the Securities directly, through agents designated
from time to time or through underwriters or dealers. If any agents of the
Company or any underwriters or dealers are involved in the sale of the
Securities, the names of such agents, underwriters or dealers, any applicable
commissions and discounts, and the net proceeds to the Company will be set forth
in the applicable Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for agents, underwriters and dealers.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
---------------------
The date of this Prospectus is July 24, 1997
<PAGE> 14
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IN
CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT, AND, IF GIVEN OR MADE, ANY SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
AVAILABLE INFORMATION
Union Texas Petroleum Holdings, Inc. is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at certain of the Commission's Regional Offices located at Seven
World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the Commission's Web site is http://www.sec.gov. Copies of such materials can
be obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed
rates. In addition, the Company's Common Stock is listed on the New York Stock
Exchange and the Pacific Exchange, Inc., and the Company's 8.25% Senior Notes
due 1999 (the "8.25% Senior Notes") are listed on the New York Stock Exchange.
The Company's reports, proxy statements and other information filed under the
Exchange Act may also be inspected and copied at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005 and the Pacific
Exchange, Inc. 301 Pine Street, San Francisco, California 94104.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement and to the
exhibits and schedules filed therewith. All of these documents may be inspected
without charge at the Commission's principal office in Washington, D.C., and
copies thereof may be obtained from the Commission at the prescribed rates or
may be examined without charge at the public reference facilities of the
Commission.
---------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-9019)
pursuant to the Exchange Act are incorporated herein by reference: the Company's
Annual Report on Form 10-K for the year ended December 31, 1996; its Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997; and its Current
Reports on Form 8-K filed January 24, 1997, February 13, 1997, April 23, 1997,
May 7, 1997, May 12, 1997 and July 23, 1997.
All other documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof
2
<PAGE> 15
from the date of filing of such documents. Any statement contained in a document
all or a portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified shall not be deemed to constitute a part of this Prospectus except as
so modified, and any statement so superseded shall not be deemed to constitute
part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all documents which
are incorporated herein by reference, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests should be directed to the Company, at its principal
executive offices at 1330 Post Oak Boulevard, Houston, Texas 77056, Attention:
Corporate Secretary, telephone (713) 623-6544.
---------------------
Quantities of natural gas are expressed in this Prospectus in terms of
thousand cubic feet ("Mcf"), million cubic feet ("MMcf") or billion cubic feet
("Bcf"). Oil is quantified in terms of barrels ("Bbls"). Gas is converted into a
barrel of oil equivalent ("boe") based on 5.8 Mcf of gas to one barrel of oil.
---------------------
THE COMPANY
The Company, the successor to a corporation founded in 1896, is an
independent (non-integrated) oil and gas company with worldwide operations. At
December 31, 1996, the Company had net proved oil and gas reserves of 443
million boe. The Company's average net daily oil and gas production during the
first three months of 1997 was approximately 62,000 Bbls and 422 MMcf,
respectively. All of the Company's oil and gas producing activities are
currently conducted outside of the United States, primarily in the U.K. sector
of the North Sea, Indonesia and Pakistan. The Company participates worldwide in
new venture exploration for oil and gas. The Company also operates a U.S.-based
petrochemical business.
As used herein, the "Company" means Union Texas Petroleum Holdings, Inc.
and its subsidiaries unless the context requires otherwise. The address and
telephone number of the Company's principal executive offices are 1330 Post Oak
Boulevard, Houston, Texas 77056, (713) 623-6544.
USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus Supplement,
the Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, which may include the repayment of outstanding
indebtedness, working capital increases, capital expenditures and acquisitions.
Pending application, such proceeds may be invested in short-term obligations or
qualified government or marketable securities. Any specific allocations of the
proceeds to a particular purpose that have been made at the date of any
Prospectus Supplement will be described therein.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges was as follows for the
years and periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
- -------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
- ---- ---- ---- ---- ---- ------- --------
<S> <C> <C> <C> <C> <C> <C>
7.93 1.61 7.31 5.52 7.84 8.06 11.41
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of pretax income plus fixed charges (excluding interest capitalized
during the period). Fixed charges consist of interest
3
<PAGE> 16
expense, capitalized interest, amortization of discount and financing costs and
the portion of rent expense which is deemed to be representative of the interest
component of rent expense. There was no preferred stock outstanding for any of
the periods shown above. Accordingly, the ratio of earnings to combined fixed
charges and preferred stock dividends is identical to the ratio of earnings to
fixed charges.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities and the extent to which
such general provisions may apply will be described in a Prospectus Supplement
relating to such Debt Securities.
The Debt Securities will be general unsecured obligations of the Company
and will constitute either senior debt securities or subordinated debt
securities. In the case of Debt Securities that will be senior debt securities
("Senior Debt Securities"), the Debt Securities will be issued under an
Indenture, as amended and supplemented (the "Senior Indenture") between the
Company and The First National Bank of Chicago, as trustee under the Senior
Indenture. In the case of Debt Securities that will be subordinated debt
securities ("Subordinated Debt Securities"), the Debt Securities will be issued
under an Indenture (the "Subordinated Indenture") to be entered into between the
Company and The First National Bank of Chicago, as trustee under the
Subordinated Indenture. The Senior Indenture and the Subordinated Indenture are
sometimes hereinafter referred to individually as an "Indenture" and
collectively as the "Indentures." Copies of the Senior Indenture and the form of
the Subordinated Indenture have been filed or incorporated by reference as
exhibits to the Registration Statement. The First National Bank of Chicago, as
trustee under each of the Indentures (and any successor thereto under each
Indenture), is referred to herein as the "Trustee." The statements under this
caption relating to the Debt Securities and the Indentures are summaries only
and do not purport to be complete. Such summaries make use of terms defined in
the Indentures. Wherever such terms are used herein or particular provisions of
an Indenture are referred to, such terms or provisions, as the case may be, are
incorporated by reference as part of the statements made herein, and such
statements are qualified in their entirety by such reference. Certain defined
terms in the Indentures are capitalized herein. The italicized references below
apply to the article or section numbers in the Senior Indenture and Subordinated
Indenture, respectively, or to both Indentures if only one reference is
provided, unless otherwise indicated.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
The Indentures do not limit the aggregate principal amount of Debt
Securities that can be issued thereunder and provide that Debt Securities may be
issued from time to time thereunder in one or more series, each in an aggregate
principal amount authorized by the Company prior to issuance. The Debt
Securities may be issued at various times with different maturity dates and
different principal repayment provisions, may bear interest at different rates,
may be payable in currencies other than United States dollars, in composite
currencies or in amounts determined by reference to the price, rate or value of
one or more specified commodities, currencies or indices, and may otherwise
vary, all as provided in the Indentures. The Company has from time to time
entered into, and will in the future enter into, credit or other financing
agreements to fund its operations, herein referred to collectively as the
"Credit Facilities." Such credit or other financing agreements may be secured by
the assets of the Company, secured by the assets of subsidiaries of the Company
or guaranteed by subsidiaries of the Company. To the extent that the Credit
Facilities are so secured or guaranteed, the lenders under such Credit
Facilities may have priority over the holders of the Debt Securities with
respect to the assets of the Company or its subsidiaries that secure such Credit
Facilities and may have priority over the holders of the Debt Securities.
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<PAGE> 17
General. Unless otherwise indicated in a Prospectus Supplement, the Debt
Securities will not benefit from any covenant or other provision that would
afford holders of such Debt Securities special protection in the event of a
highly leveraged transaction involving the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms of the particular series of Debt Securities offered hereby: (i) the title
and aggregate principal amount of the Debt Securities; (ii) the date or dates on
which the Debt Securities will mature; (iii) the rate or rates (which may be
fixed or variable) per annum, if any, at which the Debt Securities will bear
interest or the method of determining such rate or rates; (iv) the date or dates
from which such interest, if any, will accrue and the date or dates at which
such interest, if any, will be payable; (v) the terms for redemption or early
payment, if any, including any mandatory or optional sinking fund or analogous
provision; (vi) the terms for conversion or exchange, if any, of the Debt
Securities; (vii) whether, and the extent to which, the Company's obligations
under the Debt Securities will be guaranteed by any of the Company's
subsidiaries; (viii) whether such Debt Securities will be issued in fully
registered form or in bearer form or any combination thereof; (ix) whether such
Debt Securities will be issued in the form of one or more global securities and
whether such global securities are to be issuable in temporary global form or
permanent global form; (x) information with respect to book-entry procedures, if
any; (xi) the currency, currencies or currency unit or units in which such Debt
Securities will be denominated and in which the principal of, and premium and
interest, if any, on such Debt Securities will be payable; (xii) whether, and
the terms and conditions on which, the Company or a holder may elect that, or
the other circumstances under which, payment of principal of, or premium or
interest, if any, on such Debt Securities is to be made in a currency or
currencies or currency unit or units other than that in which such Debt
Securities are denominated; (xiii) any index or formula to be used to determine
the amount of payments of principal of (and premium, if any) and interest on
such Debt Securities and any commodities, currencies, currency units or indices,
or value, rate or price, relevant to such determination; (xiv) the terms, if
any, upon which such Debt Securities may be convertible into Common Stock or
other securities or property of the Company and the terms and conditions upon
which such conversion may be effected, including the initial conversion price or
rate and any other provision in addition to or in lieu of those described herein
and (xv) any other specific terms of the Debt Securities. (Section 301)
Reference is also made to the applicable Prospectus Supplement for information
with respect to (x) the classification of the Debt Securities as Senior Debt
Securities or Subordinated Debt Securities, (y) the price (expressed as a
percentage of the aggregate principal amount of the Debt Securities) at which
the Debt Securities will be issued, if other than 100 percent, and (z) any
additional covenants that may be included in the terms of the Debt Securities.
No service charge will be made for any registration of transfer or exchange
of the Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Section 305)
The Company currently conducts all of its operations through subsidiaries,
and the holders of Debt Securities will generally have a junior position to any
claims of creditors and any preferred stockholders of the Company's
subsidiaries. Claims of creditors of such subsidiaries, including trade
creditors, secured creditors, taxing authorities and creditors holding
guarantees, and claims of holders of any preferred stock will generally have
priority as to the assets of such subsidiaries over the claims and equity
interests of the Company and, thereby, indirectly, the holders of indebtedness
of the Company, including the Debt Securities. See "-- Provisions Applicable
Solely to Senior Debt Securities."
Debt Securities may be sold at a discount (which may be substantial) below
their stated principal amount bearing no interest or interest at a rate which at
the time of issuance is below market rates. Any material United States federal
income tax consequences and other special considerations applicable thereto will
be described in the Prospectus Supplement relating to any such Debt Securities.
If any of the Debt Securities are sold for any foreign currency or currency
unit or if the principal of, or premium or interest, if any, on any of the Debt
Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to
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<PAGE> 18
such Debt Securities and such foreign currency or currency unit will be set
forth in the Prospectus Supplement relating thereto.
Covenants. The Indentures require the Company to covenant, among other
things, with respect to each series of Debt Securities: (i) to duly and
punctually pay the principal of (and premium, if any) and interest, if any, on
such series of Debt Securities; (ii) to maintain an office or agency in each
Place of Payment where Debt Securities may be presented or surrendered for
payment, transferred or exchanged and where notices to the Company may be
served; (iii) if the Company shall act as its own Paying Agent for any series of
Debt Securities, to segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest, if any, so becoming due; (iv) to deliver to the Trustee, within 120
days after the end of each fiscal year, a written statement to the effect that
the Company has fulfilled all its obligations under the Indentures throughout
such year; (v) to preserve its corporate existence; (vi) to maintain its
properties; and (vii) to pay taxes and other claims, in each case, as required
by the Indentures. (Article Eleven; Article Ten)
Events of Default. Unless otherwise provided with respect to any series of
Debt Securities, the following are Events of Default under each Indenture with
respect to the Debt Securities of such series issued under the Indenture: (a)
failure to pay principal of (or premium, if any, on) any Debt Security of such
series when due; (b) failure to pay any interest on any Debt Security of such
series when due, continued for 30 days; (c) failure to deposit any mandatory
sinking fund payment, when due, in respect of the Debt Securities of such
series; (d) failure to perform any other covenant of the Company in the
applicable Indenture (other than a covenant included in the applicable Indenture
for the benefit of a series of Debt Securities other than such series),
continued for 60 days after written notice as provided in the applicable
Indenture; (e) certain events of bankruptcy, insolvency or reorganization; and
(f) any other Event of Default as may be established with respect to Debt
Securities of such series (including, without limitation, any Event of Default
arising out of a default which results in the acceleration of certain
Indebtedness or a default in the payment of any amounts due on certain
Indebtedness). (Sections 301 and 601; Sections 301 and 501) If an Event of
Default with respect to any outstanding series of Debt Securities occurs and is
continuing, either the Trustee or the holders of at least 25% in principal
amount of the outstanding Debt Securities of such series (subject to the
following sentence, in the case of an Event of Default described in clause (a),
(b), (c) or (f) above) or at least 25% in principal amount of all outstanding
Debt Securities under the Indenture (subject to the following sentence, in the
case of other Events of Default) may declare the principal amount of all the
Debt Securities of the applicable series (or of all outstanding Debt Securities
under the applicable Indenture, as the case may be) to be due and payable
immediately. If an Event of Default described in clause (e) shall occur, the
principal amount of the Debt Securities of all series ipso facto shall become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any holder. At any time after a declaration of
acceleration has been made, but before a judgment has been obtained, the holders
of a majority in principal amount of the outstanding Debt Securities of such
series (or all outstanding Debt Securities under the applicable Indenture, as
the case may be) may, under certain circumstances, rescind and annul such
acceleration. (Section 602; Section 502) Depending on the terms of other
Indebtedness of the Company outstanding from time to time, an Event of Default
under an Indenture may give rise to cross defaults on such other Indebtedness of
the Company.
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, give to the
holders of the Debt Securities of such series notice of all uncured and unwaived
defaults known to it; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or any interest on, or
any sinking fund installment with respect to, any Debt Securities of such
series, the Trustee will be protected in withholding such notice if it in good
faith determines that the withholding of such notice is in the interest of the
holders of the Debt Securities of such series; and provided, further, that such
notice shall not be given until at least 30 days after the occurrence of a
default in the performance, or breach, of any covenant or warranty of the
Company under such Indenture other than for the payment of the principal of (or
premium, if any) or any interest on, or any sinking fund installment with
respect to, any Debt Securities of such series. For the
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<PAGE> 19
purpose of this provision, "default" with respect to Debt Securities of any
series means any event which is, or after notice or lapse of time, or both,
would become, an Event of Default with respect to the Debt Securities of such
series. (Section 702; Section 602)
The holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) have the right, subject to certain limitations,
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series (or of all
outstanding Debt Securities under the applicable Indenture). (Section 612;
Section 512) Each Indenture provides that in case an Event of Default shall
occur and be continuing with respect to the Debt Securities of any series, the
Trustee shall exercise such of its rights and powers under the applicable
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs. (Section 701; Section 601) Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under either Indenture at the request of any of the holders of the Debt
Securities unless they shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request. (Section 703; Section 603)
The holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) may on behalf of the holders of all Debt
Securities of such series (or of all outstanding Debt Securities under the
applicable Indenture) waive any past default under the Indenture, except a
default in the payment of the principal of (or premium, if any) or interest on
any Debt Security or in respect of a provision which under the applicable
Indenture cannot be modified or amended without the consent of the holder of
each outstanding Debt Security affected. (Section 613; Section 513) The holders
of a majority in principal amount of the outstanding Debt Securities affected
thereby may on behalf of the holders of all such Debt Securities waive
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1110; Section 1008)
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under each
Indenture and as to any default in such performance. (Section 1109; Section
1007)
Modification. Modifications and amendments of each Indenture may be made by
the Company and the Trustee with the consent of the holders of a majority in
principal amount of the outstanding Debt Securities under the Indenture affected
thereby, provided, however, that no such modification or amendment may, without
the consent of the holder of each outstanding Debt Security affected thereby,
(a) change the stated maturity date of the principal of, or any installment of
interest on, any Debt Security, (b) reduce the principal amount of, or the
premium (if any) or interest on, any Debt Security, (c) change the Place of
Payment or currency, currencies, or currency unit or units of payment of
principal of, or premium (if any) or interest on, any Debt Security, (d) impair
the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security or (e) reduce the percentage in principal amount of
outstanding Debt Securities the consent of whose holders is required for
modification or amendment of the Indentures or for waiver of compliance with
certain provisions of the Indentures or for waiver of certain defaults. (Section
1002; Section 902)
Each Indenture provides that the Company and the Trustee may, without the
consent of any holders of Debt Securities, enter into supplemental indentures
for the purposes, among other things, of adding to the Company's covenants,
securing the Debt Securities, adding additional Events of Default, establishing
the form or terms of Debt Securities or curing ambiguities or inconsistencies in
the applicable Indenture, provided such action to cure ambiguities or
inconsistencies shall not adversely affect the interests of the holders of the
Debt Securities in any material respect. (Section 1001; Section 901)
Consolidation, Merger and Sale of Assets. The Company, without the consent
of any holders of outstanding Debt Securities, may consolidate with or merge
into, or convey, transfer or lease its assets
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<PAGE> 20
substantially as an entirety to, any Person, provided that the Person formed by
such consolidation or into which the Company is merged or which acquires or
leases the assets of the Company substantially as an entirety is a corporation,
partnership or trust organized under the laws of any United States jurisdiction
and assumes by supplemental indenture the Company's obligations on the Debt
Securities and under the Indenture, that after giving effect to the transaction,
no Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing, and
that certain other conditions are met. Upon compliance with these provisions by
a successor Person, the Company will (except in the case of a lease) be relieved
of its obligations under the Indenture and the Debt Securities. (Article Nine;
Article Eight)
Discharge and Defeasance. The Company may terminate its obligations under
each Indenture with respect to Debt Securities of any series, other than its
obligation to pay the principal of (and premium, if any) and interest on such
Debt Securities and certain other obligations, if it (i) irrevocably deposits or
causes to be irrevocably deposited with the Trustee as trust funds money or U.S.
Government Obligations maturing as to principal and interest sufficient to pay
the principal of, any interest on, and any mandatory sinking funds in respect
of, all outstanding Debt Securities of such series on the stated maturity of
such payments or on any redemption date, (ii) has delivered to the Trustee an
opinion of counsel to the effect that the holders of Debt Securities of such
series will not recognize income, gain or loss for United States federal income
tax purposes as a result of such discharge and will be subject to United States
federal income tax on the same amount and in the same manner and at the same
time as would have been the case if such discharge had not occurred, and (iii)
complies with any additional conditions specified to be applicable with respect
to the covenant defeasance of Debt Securities of such series, and no default or
Event of Default with respect to the Debt Securities of such series shall have
occurred and be continuing on the date of such deposit or, insofar as they
relate to certain events of bankruptcy or insolvency, at any time in the period
ending on the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period). (Section 501; Section 401)
The terms of any series of Debt Securities may also provide for legal
defeasance pursuant to each Indenture. In such case, if the Company (i)
irrevocably deposits or causes to be irrevocably deposited money or U.S.
Government Obligations as described above and complies with the other provisions
described above (except that the opinion referred to in clause (ii) above must
be based on a ruling by the Internal Revenue Service or other change under
applicable United States federal income tax law), (ii) makes a request to the
Trustee to be discharged from its obligations on the Debt Securities of such
series and (iii) complies with any additional conditions specified to be
applicable with respect to legal defeasance of Debt Securities of such series,
then the Company shall be deemed to have paid and discharged the entire
indebtedness on all the outstanding Debt Securities of such series, and the
obligations of the Company under the applicable Indenture and the Debt
Securities of such series to pay the principal of (and premium, if any) and
interest on the Debt Securities of such series shall cease, terminate and be
completely discharged and the holders thereof shall thereafter be entitled only
to payment out of the money or U.S. Government Obligations deposited with the
Trustee as aforesaid, unless the Company's obligations are revived and
reinstated because the Trustee is unable to apply such trust fund by reason of
any legal proceeding, order or judgment. (Sections 503 and 504; Sections 403 and
404)
Conversion Rights. The terms on which Debt Securities of any series are
convertible into or exchangeable for Common Stock or other securities or
property of the Company will be set forth in the Prospectus Supplement relating
thereto. Such terms shall include provisions as to whether conversion or
exchange is mandatory, at the option of the holder or at the option of the
Company, and may include provisions pursuant to which the number of shares of
Common Stock or other securities of the Company to be received by the holders of
Debt Securities would be calculated according to the market price of Common
Stock or other securities of the Company as of a time stated in the Prospectus
Supplement. The conversion price of any Debt Securities of any series that is
convertible into Common Stock or other
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<PAGE> 21
securities of the Company may be adjusted for any stock dividends, stock splits,
reclassification, combinations or similar transactions, as set forth in the
applicable Prospectus Supplement.
Form, Exchange, Registration and Transfer. Debt Securities are issuable in
definitive form as Registered Debt Securities, as Bearer Debt Securities or
both. Unless otherwise indicated in an applicable Prospectus Supplement, Bearer
Debt Securities will have interest coupons attached. Debt Securities are also
issuable in temporary or permanent global form. (Section 301)
Registered Debt Securities of any series will be exchangeable for other
Registered Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, with
respect to any series of Bearer Debt Securities, at the option of the holder,
subject to the terms of the applicable Indenture, Bearer Debt Securities (with
all unmatured coupons, except as provided below, and all matured coupons in
default) of such series will be exchangeable into Registered Securities of the
same series of any authorized denominations and of a like aggregate principal
amount and tenor. Bearer Debt Securities surrendered in exchange for Registered
Debt Securities between a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest, and interest accrued as of such
date will not be payable in respect of the Registered Debt Security issued in
exchange for such Bearer Debt Security, but will be payable only to the holder
of such coupon when due in accordance with the terms of the applicable
Indenture. (Section 305)
In connection with its sale during the restricted period (as defined
below), no Bearer Debt Security (including a Debt Security in permanent global
form that is either a Bearer Debt Security or exchangeable for Bearer Debt
Securities) shall be mailed or otherwise delivered to any location in the United
States (as defined under "-- Limitations on Issuance of Bearer Debt
Securities"), and a Bearer Debt Security may be delivered outside the United
States in definitive form in connection with the original issuance only if prior
to delivery the Person entitled to receive such Bearer Debt Security furnishes
written certification, in the form required by the applicable Indenture, to the
effect that such Bearer Debt Security is owned by: (a) a Person (purchasing for
its own account) who is not a United States Person (as defined under
"-- Limitations on Issuance of Bearer Debt Securities"); (b) a United States
Person who (i) is a foreign branch of a United States financial institution
purchasing for its own account or for resale or (ii) acquired such Bearer Debt
Security through the foreign branch of a United States financial institution and
who for purposes of the certification holds such Bearer Debt Security through
such financial institution on the date of certification and, in either case,
such United States financial institution certifies to the Company or the
distributor selling the Bearer Debt Security within a reasonable time stating
that it agrees to comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations thereunder; or a United States or foreign financial
institution for purposes of resale within the "restricted period" as defined in
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7). A financial
institution described in clause (c) of the preceding sentence (whether or not
also described in clauses (a) and (b)) must certify that it has not acquired the
Bearer Debt Security for the purpose of resale, directly or indirectly, to a
United States Person or to a person within the United States or its possessions.
In the case of a Bearer Debt Security in permanent global form, such
certification must be given in connection with notation of a beneficial owner's
interest therein in connection with the original issuance of such Debt Security
or upon exchange of a portion of a temporary global Security. (Section 303) See
"-- Limitations on Issuance of Bearer Debt Securities."
Debt Securities may be presented for exchange as provided above, and
Registered Debt Securities may be presented for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without a service charge and
upon payment of any taxes and other governmental charges as described in the
applicable Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the document of title and identity of the Person making the request. The
Company has appointed the Trustee as Security Registrar.
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<PAGE> 22
(Section 305) If a Prospectus Supplement refers to any transfer agents (in
addition to the Security Registrar) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that, if Debt Securities of a
series are issuable solely as Registered Debt Securities, the Company will be
required to maintain a transfer agent in each Place of Payment for such series
and, if Debt Securities of a series are issuable as Bearer Debt Securities, the
Company will be required to maintain (in addition to the Security Registrar) a
transfer agent in a Place of Payment located outside the United States for
Bearer Debt Securities and Registered Securities of such series. The Company may
at any time designate additional transfer agents with respect to any series of
Debt Securities. (Section 1102; Section 1002)
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on, (A) if Debt Securities of the series are issuable only as
Registered Debt Securities, the day of mailing of the relevant notice of
redemption and, (B) if Debt Securities of the series are issuable as Bearer Debt
Securities, the day of the first publication of the relevant notice of
redemption, except that, if Securities of the series are also issuable as
Registered Debt Securities and there is no publication, the day of mailing of
the relevant notice of redemption; (ii) register the transfer of or exchange any
Registered Debt Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Debt Security being redeemed in part; or
(iii) exchange any Bearer Debt Security called for redemption, except to
exchange such Bearer Debt Security for a Registered Debt Security of that series
and like tenor that is simultaneously surrendered for redemption. (Section 305)
Payment and Paying Agents. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of principal of and any premium and interest on
Bearer Debt Securities will be payable, subject to any applicable laws and
regulations in the designated currency or currency unit, at the offices of such
Paying Agents outside the United States as the Company may designate from time
to time, at the option of the holder, by check or by transfer to an account
maintained by the payee with a bank located outside the United States; provided,
however, that the written certification described above under "-- Form,
Exchange, Registration and Transfer" has been delivered prior to the first
actual payment of interest. (Section 307) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of interest on Bearer Debt Securities
on any Interest Payment Date will be made only against surrender to the Paying
Agent of the coupon relating to such Interest Payment Date. (Section 1101;
Section 1001) No payment with respect to any Bearer Debt Security will be made
at any office or agency of the Company in the United States or by check mailed
to any address in the United States or by transfer to any account maintained
with a bank located in the United States, nor shall any payments be made in
respect of Bearer Debt Securities upon presentation to the Company or its
designated Paying Agents within the United States. Notwithstanding the
foregoing, payments of principal of and any premium and interest on Bearer Debt
Securities denominated and payable in U.S. dollars will be made at the office of
the Company's Paying Agent in the Borough of Manhattan, The City of New York, if
(but only if) payment of the full amount thereof in United States dollars at all
offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 1102;
Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Debt Securities will
be made in the designated currency or currency unit at the office of such Paying
Agent or Paying Agents as the Company may designate from time to time, except
that at the option of the Company payment of any interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on Registered Debt
Securities will be made to the Person in whose name such Registered Debt
Security is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York will be designated as a Paying Agent for
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<PAGE> 23
the Company for payments with respect to Debt Securities which are issuable
solely as Registered Debt Securities, and the Company will maintain a Paying
Agent outside the United States for payments with respect to Debt Securities
(subject to limitations described above in the case of Bearer Debt Securities)
which are issuable solely as Bearer Debt Securities, or as both Registered Debt
Securities and Bearer Debt Securities. Any Paying Agents outside the United
States and any other Paying Agents in the United States initially designated by
the Company for the Debt Securities will be named in an applicable Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that, if Debt Securities of a series
are issuable solely as Registered Debt Securities, the Company will be required
to maintain a Paying Agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Debt Securities, the Company will
be required to maintain (i) a Paying Agent in the Borough of Manhattan, The City
of New York for principal payments with respect to any Registered Debt
Securities of the series (and for payments with respect to Bearer Debt
Securities of the series in the circumstances described above, but not
otherwise), and (ii) a Paying Agent in a Place of Payment located outside the
United States where securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment; provided that if the Debt
Securities of such series are listed on any stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent in a city located outside the United States, as may be
required, for the Debt Securities of such series. (Section 1102; Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed at the end of three years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company, and the holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof. (Section 1103; Section
1003)
Temporary Global Securities. If so specified in an applicable Prospectus
Supplement, all or any portion of the Debt Securities of a series which are
issuable as Bearer Debt Securities will initially be represented by one or more
temporary global Debt Securities, without interest coupons, to be deposited with
a common depositary in London for the Euroclear System ("Euroclear") and CEDEL
S.A. ("CEDEL") for credit to the designated accounts. On and after the date
determined as provided in any such temporary global Debt Security and described
in an applicable Prospectus Supplement, each such temporary global Debt Security
will be exchangeable for definitive Bearer Debt Securities, definitive
Registered Debt Securities or all or a portion of a permanent global security,
or any combination thereof, as specified in an applicable Prospectus Supplement,
but, unless otherwise specified in an applicable Prospectus Supplement only upon
written certification in the form and to the effect described under "-- Form,
Exchange, Registration and Transfer." No Bearer Debt Security delivered in
exchange for a portion of a temporary global Debt Security will be mailed or
otherwise delivered to any location in the United States in connection with such
exchange. (Section 304)
Unless otherwise specified in an applicable Prospectus Supplement, interest
in respect of any portion of a temporary global Debt Security payable in respect
of an Interest Payment Date occurring prior to the issuance of definitive Debt
Securities or a permanent global Debt Security will be paid to each of Euroclear
and CEDEL with respect to the portion of the temporary global Debt Security held
for its account. Each of Euroclear and CEDEL will undertake in such
circumstances to credit such interest received by it in respect of a temporary
global Debt Security to the respective accounts for which it holds such
temporary global Debt Security only upon receipt in each case of written
certification in the form and to the effect described above under "-- Form,
Exchange, Registration and Transfer" as of the relevant Interest Payment Date
regarding the portion of such temporary global Debt Security on which interest
is to be so credited. (Section 304)
Permanent Global Securities. If any Debt Securities of a series are
issuable in permanent global form, the applicable Prospectus Supplement will
describe the circumstances, if any, under which beneficial owners of interests
in any such permanent global Debt Securities may exchange such interest for Debt
Securities of such series and of like tenor and principal amount in any
authorized form and
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denomination. No Bearer Debt Security delivered in exchange for a portion of a
permanent global Debt Security shall be mailed or otherwise delivered to any
location in the United States in connection with such exchange. (Section 305) A
Person having a beneficial interest in a permanent global Debt Security will,
except with respect to payment of principal of and any premium and interest on
such permanent global Debt Security, be treated as a holder of such principal
amount of Outstanding Debt Securities represented by such permanent global Debt
Security as shall be specified in a written statement of the holder of such
permanent global Debt Security or, in the case of a permanent global Debt
Security in bearer form, of the operator of Euroclear or CEDEL which is provided
to the Trustee by such Person. Principal of and any premium and interest on a
permanent global Debt Security will be payable in the manner described in the
applicable Prospectus Supplement. (Section 203)
Book-Entry Debt Securities. The Debt Securities of a series may be issued
in whole or in part, in the form of one or more global Debt Securities that
would be deposited with a depositary or a nominee identified in the applicable
Prospectus Supplement. The specific terms of any depositary arrangement with
respect to any portion of a series of Debt Securities and the rights of, and
limitations on, owners of beneficial interests in any such global Debt Security
representing all or a portion of a series of Debt Securities will be described
in the applicable Prospectus Supplement. (Section 204)
Limitations on Issuance of Bearer Debt Securities. In compliance with
United States federal tax laws and regulations, Bearer Debt Securities
(including securities in permanent global form that are either Bearer Debt
Securities or exchangeable for Bearer Debt Securities) will not be offered or
sold during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)) (generally, the first 40 days after
the closing date, and with respect to unsold allotments, until sold) within the
United States or to United States Persons (each as defined below) other than to
an office located outside the United States of a United States financial
institution (as defined in Section 1.165-12(c)(1)(v) of the United States
Treasury Regulations), purchasing for its own account or for resale or for the
account of certain customers, that provides a certificate stating that it agrees
to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Code
and the United States Treasury Regulations thereunder, or to certain other
Persons described in Section 1.163-5(c)(2)(i)(D)(l)(iii)(B) of the United States
Treasury Regulations. Moreover, such Bearer Debt Securities will not be
delivered in connection with their sale during the restricted period within the
United States. Any underwriters, agents and dealers participating in the
offering of Bearer Debt Securities must covenant that they will not offer or
sell during the restricted period any Bearer Debt Securities within the United
States or to United States Persons (other than the persons described above) or
deliver in connection with the sale of Bearer Debt Securities during the
restricted period any Bearer Debt Securities within the United States and that
they have in effect procedures reasonably designed to ensure that their
employees and agents who are directly engaged in selling the Bearer Debt
Securities are aware of the restrictions described above. No Bearer Debt
Security (other than a temporary global Bearer Debt Security) will be delivered
in connection with its original issuance nor will interest be paid on any Bearer
Debt Security until receipt by the Company of the written certification
described above under "-- Form, Exchange, Registration and Transfer." Each
Bearer Debt Security, other than a temporary global Bearer Debt Security, will
bear a legend to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
As used herein "United States Person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States and any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, and "United States" means the United States of America (including the
states and the District of Columbia) and its possessions.
Meetings. The Indentures contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting may be called at any time by
the Trustee, and also, upon request, by the Company or the holders of at least
25% in principal amount of the Outstanding Debt Securities of such series, in
any such case upon notice given as described under "-- Notices" below. Except
for any
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consent that must be given by the holder of each Outstanding Debt Security
affected thereby, as described under "-- Modification" above, any resolution
presented at a meeting or adjourned meeting at which a quorum is present may be
adopted by the affirmative vote of the holders of a majority in principal amount
of the Outstanding Debt Securities of that series; provided, however, that
except for any consent that must be given by the holder of each Outstanding Debt
Security affected thereby, as described under "-- Modification" above, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority in principal
amount of the Outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the Outstanding Debt Securities of that series. Subject to the proviso set
forth above, any resolution passed or action taken at any meeting of holders of
Debt Securities of any series duly held in accordance with the Indenture will be
binding on all holders of Debt Securities of that series and any related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be Persons holding or representing a majority in
principal amount of the Outstanding Debt Securities of a series. (Article
Fourteen)
Notices. Except as otherwise provided in the Indentures, notices to holders
of Bearer Debt Securities will be given by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such Debt Securities. Notices to holders of Registered Debt
Securities will be given by mail to the addresses of such holders as they appear
in the Security Register. (Section 107)
The Trustee. The Indentures provide that the Trustee shall authenticate and
deliver Debt Securities of a particular series in accordance with a Company
Order. Each Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases and to realize certain property received with respect to any such
claims, as security or otherwise. (Section 713; Section 613) The Trustee is one
of the lenders under certain of the Company's Credit Facilities. The Trustee is
permitted to engage in other transactions, except that, if it acquires any
conflicting interest and there is a default under the Debt Securities, it must
eliminate such conflict or resign. (Section 708; Section 608)
Governing Law. The Indentures are, and the Debt Securities will be,
governed by and construed in accordance with the laws of the State of New York,
but without giving effect to principles of conflicts of law.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
Senior Debt Securities will be issued under the Senior Indenture and will
rank pari passu in right of payment with the Company's obligations under its
Credit Facilities, its 8.25% Senior Notes due 1999, 8 3/8% Senior Notes due
2005, 8 1/2% Senior Notes due 2007 and Medium Term Notes, Series A
(collectively, the "Senior Notes") and all other unsecured and unsubordinated
debt of the Company, and will be senior in right of payment to all existing and
future debt of the Company that is, by its terms, expressly subordinated to the
Senior Debt Securities. The Senior Debt Securities issued under this Prospectus
will not be guaranteed by any subsidiary of the Company and will not rank pari
passu with any debt of such subsidiary, but will be senior in right of payment
to all existing and future debt of such subsidiary that is, by its terms,
expressly subordinated to the Senior Debt Securities.
Under the terms of the Indenture, if any Subsidiary of the Company
guarantees any Funded Indebtedness of the Company at any time in the future,
then the Company will cause the Senior Debt Securities to be equally, ratably
and unconditionally guaranteed by such Subsidiary (a "Guarantor") as an
unsecured obligation (the "Guarantee"). Any Guarantee of a Senior Debt Security
by a Guarantor will rank pari passu with (i) the guarantees provided by such
Guarantor under any Funded Indebtedness of the Company, including the Senior
Notes, and (ii) all existing and future unsecured indebtedness of such Guarantor
that is not, by its terms, expressly subordinated in right of payment to such
Guarantee.
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Covenant Providing for Limitation on Liens. Nothing in the Senior Indenture
or the Senior Debt Securities will in any way restrict or prevent the Company or
any Restricted Subsidiary from issuing, assuming, guaranteeing or otherwise
incurring any Indebtedness, provided, however, the Senior Indenture will provide
that the Company will not, and will not permit any Restricted Subsidiary to,
issue, assume or guarantee any Indebtedness for borrowed money secured by any
Lien on any property or asset now owned or hereafter acquired by the Company or
such Restricted Subsidiary without making effective provision whereby any and
all Senior Debt Securities then or thereafter outstanding will be secured by a
Lien equally and ratably with any and all other obligations thereby secured for
so long as any such obligations shall be so secured.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary
may, without so securing the Senior Debt Securities, issue, assume or guarantee
Indebtedness secured by the following Liens:
(a) Liens existing on the date on which the Senior Debt Securities are
originally issued or provided for under the terms of agreements existing on
such date;
(b) Liens on property securing (i) all or any portion of the cost of
exploration, drilling or development of such property, (ii) all or any
portion of the cost of acquiring, constructing, altering, improving or
repairing any property or assets, real or personal, or improvements used or
to be used in connection with such property or (iii) Indebtedness incurred
by the Company or any Restricted Subsidiary to provide funds for the
activities set forth in clauses (i) and (ii) above;
(c) Liens securing Indebtedness owed by a Restricted Subsidiary to the
Company or to any other Restricted Subsidiary;
(d) Liens on the property of any Person existing at the time such
Person becomes a Subsidiary of the Company and not incurred as a result of
(or in connection with or in anticipation of) such Person becoming a
Subsidiary of the Company, provided that such Liens do not extend to or
cover any property or assets of the Company or any of its Subsidiaries
other than the property so acquired;
(e) Liens on any property securing (i) Indebtedness incurred in
connection with the construction, installation or financing of pollution
control or abatement facilities or other forms of industrial revenue bond
financing or (ii) Indebtedness issued or guaranteed by the United States or
any State thereof or any department, agency or instrumentality of either;
(f) any Lien on any asset securing Non-Recourse Indebtedness of the
Company or any Restricted Subsidiary or on any asset of Union Texas East
Kalimantan Limited securing Joint Venture Indebtedness;
(g) any Lien extending, renewing or replacing (or successive
extensions, renewals or replacements of) any Lien of any type permitted
under clauses (a) through (f) above, provided that such Lien extends to or
covers only the property that is subject to the Lien being extended,
renewed or replaced;
(h) certain Liens arising in the ordinary course of business of the
Company and the Restricted Subsidiaries; or
(i) Liens (exclusive of any Lien of any type otherwise permitted under
clauses (a) through (h) above) securing Indebtedness of the Company or any
Restricted Subsidiary in an aggregate principal amount which, together with
the aggregate amount of Attributable Indebtedness deemed to be outstanding
in respect of all Sale/Leaseback Transactions entered into pursuant to
clause (a) of the covenant described under "Limitation on Sale/Leaseback
Transactions" below (exclusive of any such Sale/Leaseback Transactions
otherwise permitted under clauses (a) through (h) above), does not at the
time such Indebtedness is incurred exceed 10% of the Consolidated Net Worth
of the Company (as shown in the most recent audited consolidated balance
sheet of the Company and its Subsidiaries).
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The following types of transactions will not be prohibited or otherwise
limited by the foregoing covenant: (i) the sale, granting of Liens with respect
to, or other transfer of, crude oil, natural gas or other petroleum hydrocarbons
in place for a period of time until, or in an amount such that, the transferee
will realize therefrom a specified amount (however determined) of money or of
such crude oil, natural gas or other petroleum hydrocarbons; (ii) the sale or
other transfer of any other interest in property of the character commonly
referred to as a production payment, overriding royalty, forward sale or similar
interest; and (iii) the granting of Liens required by any contract or statute in
order to permit the Company or any Restricted Subsidiary to perform any contract
or subcontract made by it with or at the request of the United States or any
State thereof or of any foreign government or any department, agency,
organization or instrumentality thereof, or to secure partial, progress, advance
or other payments to the Company or any Restricted Subsidiary by such
governmental unit pursuant to the provisions of any contract or statute.
(Section 1107 of the Senior Indenture)
Covenant Providing for Limitation on Sale/Leaseback Transactions. The
Senior Indenture will provide that the Company will not, and will not permit any
Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with any
Person (other than the Company or a Restricted Subsidiary) unless:
(a) the Company or such Restricted Subsidiary would be entitled to
incur Indebtedness, in a principal amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction, secured by a
Lien on the property subject to such Sale/Leaseback Transaction pursuant to
the covenant described under "Limitation on Liens" above without equally
and ratably securing the Senior Debt Securities pursuant to such covenant;
(b) after the date on which the Senior Debt Securities are originally
issued and within a period commencing six months prior to the consummation
of such Sale/Leaseback Transaction and ending six months after the
consummation thereof, the Company or such Restricted Subsidiary shall have
expended for property used or to be used in the ordinary course of business
of the Company and the Restricted Subsidiaries (including amounts expended
for the exploration, drilling or development thereof, and for additions,
alterations, repairs and improvements thereto) an amount equal to all or a
portion of the net proceeds of such Sale/Leaseback Transaction and the
Company shall have elected to designate such amount as a credit against
such Sale/Leaseback Transaction (with any such amount not being so
designated to be applied as set forth in clause (c) below); or
(c) the Company, during the 12-month period after the effective date
of such Sale/Leaseback Transaction, shall have applied to the voluntary
defeasance or retirement of any Pari Passu Indebtedness an amount equal to
the greater of the net proceeds of the sale or transfer of the property
leased in such Sale/Leaseback Transaction and the fair value, as determined
by the Board of Directors of the Company, of such property at the time of
entering into such Sale/Leaseback Transaction (in either case adjusted to
reflect the remaining term of the lease and any amount expended by the
Company as set forth in clause (b) above), less an amount equal to the
principal amount of Pari Passu Indebtedness voluntarily defeased or retired
by the Company within such 12-month period and not designated as a credit
against any other Sale/Leaseback Transaction entered into by the Company or
any Restricted Subsidiary during such period. (Section 1106 of the Senior
Indenture)
The term "Attributable Indebtedness," when used with respect to any
Sale/Leaseback Transaction, is defined in the Senior Indenture as at the time of
determination, the present value (discounted at a rate equivalent to the
Company's then current weighted average cost of funds for borrowed money as at
the time of determination, compounded on a semi-annual basis) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
The term "Capitalized Lease Obligation" of any Person is defined in the
Senior Indenture as any obligation of such Person to pay rent or other amounts
under a lease of property, real or personal, that is
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required to be capitalized for financial reporting purposes in accordance with
generally accepted accounting principles; and the amount of such obligation
shall be the capitalized amount thereof determined in accordance with generally
accepted accounting principles.
The term "Consolidated Net Worth" of the Company is defined in the Senior
Indenture as the consolidated stockholder's equity of the Company and its
Subsidiaries, as determined in accordance with generally accepted accounting
principles.
The term "Funded Indebtedness" is defined in the Senior Indenture as all
Indebtedness (including Indebtedness incurred under any revolving credit, letter
of credit or working capital facility) that matures by its terms, or that is
renewable at the option of any obligor thereon to a date, more than one year
after the date on which such Indebtedness is originally incurred.
The term "Hedging Obligations" of any Person is defined in the Senior
Indenture as the obligations of such Person pursuant to any interest rate swap
agreement, foreign currency exchange agreement, interest rate collar agreement,
option or future contract or other similar agreement or arrangement relating to
interest rates or foreign exchange rates.
The term "Indebtedness" of any Person at any date is defined in the Senior
Indenture as, without duplication, (i) all indebtedness of such Person for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or other
similar instruments (or reimbursement obligations with respect thereto), other
than standby letters of credit incurred by such Person in the ordinary course of
business, (iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except trade payables and accrued
expenses incurred in the ordinary course of business, (v) all Capitalized Lease
Obligations of such Person, (vi) all Indebtedness of others secured by a lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, (vii) all Indebtedness of others guaranteed by such Person to the extent
of such guarantee and (viii) all Hedging Obligations of such Person.
The term "Joint Venture Indebtedness" is defined in the Senior Indenture as
obligations secured by a Lien on the interests of the Company or a Restricted
Subsidiary, as the case may be, arising under production sharing contracts or
related supply contracts, if such Lien covers ratably the interests of
Pertamina, the Indonesian national oil company, and all production sharing
contractors thereunder.
The term "Lien" is defined in the Senior Indenture as, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset (including, without limitation, any production
payment, advance payment or similar arrangement with respect to minerals in
place), whether or not filed, recorded or otherwise perfected under applicable
law. For the purposes of this Indenture, the Company or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
Capitalized Lease Obligation (other than any Capitalized Lease Obligation
relating to any building, structure, equipment or other property used or to be
used in the ordinary course of business of the Company and the Restricted
Subsidiaries) or other title retention agreement relating to such asset.
The term "Non-Recourse Indebtedness" is defined in the Senior Indenture as,
at any date, the aggregate amount at such date of Indebtedness of the Company or
a Subsidiary in respect of which the recourse of the holder of such
Indebtedness, whether direct or indirect and whether contingent or otherwise, is
effectively limited to specified assets.
The term "Pari Passu Indebtedness" is defined in the Senior Indenture as
any Indebtedness of the Company, whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall be
subordinated in right of payment to the Securities.
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The term "Restricted Subsidiary" is defined in the Senior Indenture as (i)
Union Texas East Kalimantan Limited, Union Texas Petroleum Energy Corporation,
Union Texas International Corporation, Union Texas Products Corporation and
Unistar, Inc., (ii) Union Texas Petroleum Limited so long as it is a Subsidiary
of the Company and (iii) any Subsidiary of the Company that is a successor
corporation of any Subsidiary of the Company referred to in clauses (i) and
(ii).
The term "Sale/Leaseback Transaction" is defined in the Senior Indenture as
any arrangement with any Person providing for the leasing by the Company or any
Restricted Subsidiary, for a period of more than three years, of any real or
tangible personal property, which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person in
contemplation of such leasing.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
General. Subordinated Debt Securities will be issued under the Subordinated
Indenture and will rank pari passu with certain other subordinated debt of the
Company that may be outstanding from time to time and will rank junior to all
Senior Indebtedness (including any Senior Debt Securities) of the Company that
may be outstanding from time to time.
Subordination. The payment of the principal of (and premium, if any) and
interest on the Subordinated Debt Securities is expressly subordinated, to the
extent and in the manner set forth in the Subordinated Indenture, in right of
payment to the prior payment in full of all Senior Indebtedness of the Company.
(Section 1301 of the Subordinated Indenture)
In the event of any dissolution or winding up, or total or partial
liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, the holders of
Senior Indebtedness will be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Indebtedness before the
holders of the Subordinated Debt Securities are entitled to receive any payment
on account of principal (or premium, if any) or interest on the Subordinated
Debt Securities. (Section 1302 of the Subordinated Indenture) By reason of
subordination of the Subordinated Debt Securities, in the event of the
insolvency of the Company, holders of the Subordinated Debt Securities may
recover less, ratably, than holders of Senior Indebtedness.
Unless otherwise indicated in the applicable Prospectus Supplement, no
payment in respect of the Subordinated Debt Securities shall be made if, at the
time of such payment, there exists a default in payment of all or any portion of
any Senior Indebtedness, and such default shall not have been cured or waived in
writing or the benefits of such subordination in the Subordinated Indenture
shall not have been waived in writing by or on behalf of the holders of such
Senior Indebtedness. In addition, unless otherwise provided in the applicable
Prospectus Supplement, during the continuance of any event of default (other
than a default referred to in the immediately preceding sentence) with respect
to any Senior Indebtedness permitting the holders to accelerate the maturity
thereof and upon written notice thereof given to the Trustee, with a copy to the
Company (the delivery of which shall not affect the validity of the notice to
the Trustee), by any holder of Senior Indebtedness or its representative, then,
unless and until such an event of default shall have been cured or waived or
shall have ceased to exist, no payment shall be made by the Company with respect
to the principal of or interest on the Subordinated Debt Securities or to
acquire any of the Subordinated Debt Securities or on account of the redemption
provisions of the Subordinated Debt Securities. Only one such payment blockage
period may be commenced within any consecutive 365-day period with respect to
the Subordinated Debt Securities. No event of default which existed or was
continuing on the date of the commencement of any 180-day payment blockage
period with respect to the Senior Indebtedness initiating such payment blockage
period shall be, or be made, the basis for the commencement of a second payment
blockage period by a holder or representative of such Senior Indebtedness,
whether or not within a period of 365 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days (and, in the case of any such waiver, no payment shall be made
by the Company to the holders of Senior Indebtedness in
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connection with such waiver other than amounts due pursuant to the terms of the
Senior Indebtedness as in effect at the time of such default). (Section 1302 of
the Subordinated Indenture)
The term "Indebtedness", as applied to any Person, is defined in the
Subordinated Indenture as all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by such Person for the
repayment of money borrowed, and obligations, computed in accordance with
generally accepted accounting principles, as lessee under leases that should be,
in accordance with generally accepted accounting principles, recorded as capital
leases. All Indebtedness of others guaranteed as to payment of principal by such
Person or in effect guaranteed by such Person through a contingent agreement to
purchase such Indebtedness shall for all purposes hereof be deemed to be
Indebtedness of such Person.
The term "Senior Indebtedness" is defined in the Subordinated Indenture as
Indebtedness, either outstanding as of the date of the Subordinated Indenture or
issued subsequent to the date of the Subordinated Indenture, unless such
Indebtedness is either subordinated by its terms in right of payment to any
other Indebtedness of the Company or pari passu with subordinated Indebtedness
of any series, provided that the term "Senior Indebtedness" shall not include
(i) Indebtedness of the Company to any Subsidiary for money borrowed or advanced
from such Subsidiary or (ii) amounts owed (except to banks and other financial
institutions) for goods, materials or services purchased in the ordinary course
of business.
If Subordinated Debt Securities are issued under the Subordinated
Indenture, the aggregate principal amount of Senior Indebtedness outstanding as
of a recent date will be set forth in the applicable Prospectus Supplement. The
Subordinated Indenture does not restrict the amount of Senior Indebtedness that
the Company may incur.
DESCRIPTION OF CAPITAL STOCK
Under the Company's Restated Certificate of Incorporation as amended (the
"Charter"), the Company is authorized to issue 215,000,000 shares of capital
stock ("Capital Stock") consisting of 15,000,000 shares of Preferred Stock and
200,000,000 shares of Common Stock. As of June 30, 1997, there were 84,687,098
shares of Common Stock outstanding and no shares of Preferred Stock outstanding.
COMMON STOCK
Voting and other Rights. The Common Stock possesses ordinary voting rights
for the election of directors and in respect of other corporate matters, each
share being entitled to one vote. There are no cumulative voting rights, meaning
that the holders of a majority of the shares voting for the election of
directors can elect all the directors if they choose to do so. The Common Stock
carries no preemptive rights and is not convertible, redeemable or assessable.
Subject to the prior rights of any shares of Preferred Stock that may from time
to time be outstanding, the holders of Common Stock are entitled to dividends in
such amounts and at such times as may be declared by the Board of Directors.
Upon liquidation or dissolution, holders of Common Stock are entitled to
share ratably in all net assets available for distribution to shareholders after
payment of preferential amounts to holders of Preferred Stock. All outstanding
shares of Common Stock are, and the shares of Common Stock to be sold by the
Company in connection with any offering pursuant to this Prospectus and any
Prospectus Supplement when issued will be, duly authorized, validly issued,
fully paid and nonassessable.
The outstanding Common Stock is listed on the New York Stock Exchange and
the Pacific Stock Exchange under the symbol "UTH." Any Common Stock offered will
be listed, subject to notice of issuance, on such exchanges.
The transfer agent, registrar and dividend disbursing agent for the Common
Stock is First Chicago Trust Company of New York.
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SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
Section 203 of the Delaware General Corporation Law ("DGCL") prevents an
"interested stockholder" (defined in Section 203, generally, as a person owning
15% or more of a corporation's outstanding voting stock), from engaging in a
"business combination" (as defined in Section 203) with a publicly-held Delaware
corporation for three years following the date such person became an interested
stockholder unless (i) before such person became an interested stockholder, the
board of directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the business
combination; (ii) upon consummation of the transaction that resulted in the
interested stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding stock held by
directors who are also officers of the corporation and by employee stock plans
that do not provide participants with the rights to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer); or (iii) following the transaction in which such person became an
interested stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders by the
affirmative vote of the holders of two-thirds of the outstanding voting stock of
the corporation not owned by the interested stockholder. The provisions of
Section 203 may have the effect of delaying, deferring or preventing a change of
control of the Company.
DIRECTOR LIABILITY
The Charter contains a provision that limits the liability of the Company's
directors to the fullest extent permitted by the DGCL. The provision eliminates
the personal liability of directors to the Company and its stockholders for
monetary damages for breaches of their fiduciary duty of care. As a result,
stockholders may be unable to recover monetary damages against directors for
negligent or grossly negligent acts or omissions in violation of their duty of
care. The provision does not change the liability of a director for breach of
his duty of loyalty to the Company or to stockholders, for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, for the declaration or payment of dividends in violation of Delaware law or
in respect of any transaction from which a director received an improper
personal benefit. The Charter provides that if the DGCL is amended to further
limit such liability, then the liability of Company directors will be limited or
eliminated to the maximum extent permitted by law as so amended.
PREFERRED STOCK
The Company is authorized to issue 15,000,000 shares of Preferred Stock.
Under the Charter, the Board of Directors may from time to time establish and
issue one or more series of Preferred Stock and fix the designations, powers,
preferences and rights of the shares of such series and the qualifications,
limitations or restrictions thereon, including, but not limited to, dividend
rights, dividend rates, conversion rights, voting rights, rights and terms of
redemption (including sinking fund provisions) and liquidation preferences. The
number of authorized shares of Preferred Stock may be increased or decreased
(but not below the number of shares thereof then outstanding) by the affirmative
vote of the holders of a majority of the voting power of all of the then
outstanding shares of the Capital Stock of the Company entitled to vote
generally in the election of directors (the "Voting Stock") voting together as a
single class, without a separate vote of the holders of the Preferred Stock, or
any series thereof, unless a vote of any such holders is required pursuant to
any certificate of designation relating to a series of Preferred Stock.
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. Certain other terms of a particular series of Preferred Stock will
be described in the Prospectus Supplement relating to that series. If so
indicated in the Prospectus Supplement, the terms of any such series may differ
from the terms set forth below. The description of certain provisions of the
Preferred Stock set forth below and in any Prospectus Supplement does not
purport to be complete and is subject to and qualified in its entirety by
reference to
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the Company's Charter and bylaws and the certificate of designation relating to
each such series of Preferred Stock, which will be filed with the Commission in
connection with the offering of such series of Preferred Stock.
GENERAL
Subject to limitations prescribed by Delaware law and the Company's Charter
and bylaws, the Board of Directors is authorized to fix the number of shares
constituting each series of Preferred Stock and the designations, relative
rights, preferences and limitations thereof, including such provisions as may be
desired concerning voting, redemption, dividends, dissolution, the distribution
of assets, conversion or sinking funds, and such other subjects or matters as
may be fixed by resolution of the Board of Directors or a duly authorized
committee thereof. The Preferred Stock will, when issued, be fully paid and
nonassessable upon issuance against the full payment of the purchase price
therefor, and will not have, or be subject to, any preemptive or similar rights.
Reference is made to the Prospectus Supplement relating to the series of
Preferred Stock offered thereby for specific terms, including: (i) the class or
series, title and stated value of such Preferred Stock; (ii) the number of
shares of such Preferred Stock offered, the liquidation preference per share and
the offering price of such Preferred Stock; (iii) the dividend rate(s),
period(s) and/or payment date(s) or method(s) of calculation thereof applicable
to such Preferred Stock; (iv) whether dividends on such Preferred Stock shall be
cumulative or not and, if cumulative, the date from which dividends on such
Preferred Stock shall accumulate; (v) the procedures for any auction and
remarketing, if any, for such Preferred Stock; (vi) provisions for a sinking
fund, if any, for such Preferred Stock; (vii) provisions for redemption, if
applicable, of such Preferred Stock; (viii) any listing of such Preferred Stock
on any securities exchange; (ix) the terms and conditions, if applicable, upon
which such Preferred Stock will be convertible into other securities of the
Company, including the conversion price (or manner of calculation thereof); (x)
whether interests in such Preferred Stock will be represented by Depositary
Shares; (xi) a discussion of certain federal income tax considerations
applicable to such Preferred Stock; and (xii) any other material terms,
preferences, rights, limitations or restrictions of such Preferred Stock.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Stock will, with respect to (as applicable) dividend rights and rights upon
liquidation, dissolution or winding up of the Company, rank (i) senior to all
classes or series of common stock of the Company and to all equity securities of
the Company the terms of which provide that such equity securities are
subordinated to such Preferred Stock; (ii) on a parity with all equity
securities of the Company other than those referred to in clauses (i) and (iii);
and (iii) junior to all equity securities of the Company which the terms of such
Preferred Stock provide will rank senior to it. For these purposes, the term
"equity securities" does not include convertible debt securities.
DIVIDENDS
Holders of shares of the Preferred Stock of each series shall be entitled
to receive, when, as and if declared by the Board of Directors of the Company,
out of funds legally available therefor, cash dividends at such rates and on
such dates as will be set forth in the applicable Prospectus Supplement.
Different series of the Preferred Stock may be entitled to dividends at
different rates or based upon different methods of determination. Such rates may
be fixed or variable or both. Each such dividend shall be payable to holders of
record as they appear on the stock transfer books of the Company on such record
dates as shall be fixed by the Board of Directors of the Company or a duly
authorized committee thereof.
Dividends on any series of the Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will accumulate from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Stock for which
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dividends are noncumulative, then the holders of such series of the Preferred
Stock will have no right to receive a dividend in respect of the dividend period
ending on such dividend payment date, and the Company will have no obligation to
pay the dividend accrued for such period, whether or not dividends on such
series are declared payable on any future dividend payment date.
If any shares of the Preferred Stock of any series are outstanding, 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
Preferred Stock of such series for any period, unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Preferred Stock of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Stock does not have a cumulative dividend, full
dividends for the then current dividend period have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Preferred Stock of such series. When dividends
are not paid in full (or a sum sufficient for such full payment is not so set
apart) upon the shares of Preferred Stock of any series and the shares of any
other series of preferred stock ranking on a parity as to dividends with the
Preferred Stock of such series, all dividends declared upon shares of Preferred
Stock of such series and any other series of preferred stock ranking on a parity
as to dividends with such Preferred Stock shall be declared pro rata so that the
amount of dividends declared per share on the Preferred Stock of such series and
such other series of preferred stock shall in all cases bear to each other the
same ratio that accrued and unpaid dividends per share on the shares of
Preferred Stock of such series (which shall not include any accumulation in
respect of unpaid dividends for prior dividend periods if such Preferred Stock
does not have a cumulative dividend) and such other series of preferred stock
bear to each other. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on Preferred Stock of
such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series 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 and (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set aside for payment for the then current dividend
period, no dividends (other than in shares of Common Stock or other capital
stock ranking junior to the Preferred Stock of such series as to dividends and
upon liquidation, dissolution or winding up) shall be declared or paid or set
aside for payment or other distribution shall be declared or made upon the
Common Stock, or any other capital stock of the Company ranking junior to or on
a parity with the Preferred Stock of such series as to dividends or upon
liquidation, nor shall any shares of Common Stock, or any other capital stock of
the Company ranking junior to or on a parity with the Preferred Stock of such
series as to dividends or upon liquidation, dissolution or winding up be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any such
shares) by the Company (except by conversion into or exchange for other capital
stock of the Company ranking junior to the Preferred Stock of such series as to
dividends and upon liquidation, dissolution or winding up).
REDEMPTION
The terms, if any, on which shares of a series Preferred Stock may be
subject to mandatory redemption or redemption at the option of the Company, in
whole or in part, will be set forth in the Prospectus Supplement relating to
such series.
RIGHTS UPON LIQUIDATION
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, then, before any distribution or payment shall be made to the
holders of any Common Stock, or any other series of
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capital stock of the Company ranking junior to such series of Preferred Stock
upon liquidation, dissolution or winding up, the holders of each series of
Preferred Stock shall be entitled to receive out of assets of the Company
legally available for distribution to stockholders liquidating distributions in
the amount of the liquidation preference per share (set forth in the applicable
Prospectus Supplement), plus an amount equal to all accrued and unpaid dividends
for the then current dividend period and, if such series of the Preferred Stock
is cumulative, for all dividend periods prior thereto, all as set forth in the
Prospectus Supplement with respect to such shares.
VOTING RIGHTS
Holders of a series of Preferred Stock will not have any voting rights,
except as from time to time required by law or as indicated in the applicable
Prospectus Supplement; provided, that the holders of shares of any series of
Preferred Stock will not be entitled to more than one vote per share, when
voting as a class with the holders of shares of the Common Stock and if such
Preferred Stock is convertible into Common Stock, then holders can receive one
vote on an as converted basis.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock are convertible into Common Stock, Debt Securities or another
series of Preferred Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock or such other series of Preferred Stock or the principal amount of
Debt Securities into which the Preferred Stock is convertible, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the holders of such series of
Preferred Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such series of Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Preferred Stock will be set forth
in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may issue Depositary Shares, each of which will represent a
fractional interest of a share of a particular series of Preferred Stock, as
specified in the applicable Prospectus Supplement. Shares of a series of
Preferred Stock represented by Depositary Shares will be deposited under a
separate Deposit Agreement (each, a "Deposit Agreement") among the Company, the
depositary named therein (the "Preferred Stock Depositary") and the holders from
time to time of the depositary receipts issued by the Preferred Stock Depositary
which will evidence the Depositary Shares ("Depositary Receipts"). Subject to
the terms of the Deposit Agreement, each owner of a Depositary Receipt will be
entitled, in proportion to the fractional interest of a share of a particular
series of Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipt, to all the rights and preferences of the series of Preferred
Stock represented by such Depositary Shares (including dividend, voting,
conversion, redemption and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the issuance
and delivery of a series of Preferred Stock by the Company to the Preferred
Stock Depositary, the Company will cause the Preferred Stock Depositary to
issue, on behalf of the Company, the Depositary Receipts. Copies of the
applicable form of Deposit Agreement and Depositary Receipt may be obtained from
the Company upon request. The statements made hereunder relating to the Deposit
Agreement and the Depositary Receipts to be issued thereunder are summaries of
certain provisions thereof and do not purport to be complete and are subject to,
and
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qualified in their entirety by reference to, all of the provisions of the
applicable Deposit Agreement and related Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of a series of Preferred Stock to the
record holders of Depositary Receipts evidencing the related Depositary Shares
in proportion to the number of such Depositary Receipts owned by such holders,
subject to certain obligations of holders to file proofs, certificates and other
information and to pay certain charges and expenses to the Preferred Stock
Depositary.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the Company,
sell such property and distribute the net proceeds from such sale to such
holders.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption), the holders thereof will be entitled to
delivery at such office, to or upon such holder's order, of the number of whole
or fractional shares of the series of Preferred Stock and any money or other
property represented by the Depositary Shares evidenced by such Depositary
Receipts. Holders of Depositary Receipts will be entitled to receive whole or
fractional shares of the related series of Preferred Stock on the basis of the
proportion of Preferred Stock represented by each Depositary Share as specified
in the applicable Prospectus Supplement, but holders of such shares of Preferred
Stock will not thereafter be entitled to receive Depositary Shares therefor. If
the Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
shares of Preferred Stock to be withdrawn, the Preferred Stock Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing such
excess number of Depositary Shares.
REDEMPTION
Whenever the Company redeems shares of a series of Preferred Stock held by
the Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of
the same redemption date the number of Depositary Shares representing shares of
such series of Preferred Stock so redeemed, provided the Company shall have paid
in full to the Preferred Stock Depositary the redemption price of the Preferred
Stock to be redeemed plus an amount equal to any accrued and unpaid dividends
thereon to the date fixed for redemption. The redemption price per Depositary
Share will be equal to the corresponding proportion of the redemption price and
any other amounts per share payable with respect to such series of Preferred
Stock. If fewer than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected pro rata (as nearly as may be
practicable without creating fractional Depositary Shares) or by any other
equitable method determined by the Company.
From and after the date fixed for redemption, all dividends in respect of
the shares of a series of Preferred Stock so called for redemption will cease to
accrue, the Depositary Shares so called for redemption will no longer be deemed
to be outstanding and all rights of the holders of the Depositary Receipts
evidencing the Depositary Shares so called for redemption will cease, except the
right to receive any moneys payable upon such redemption and any money or other
property to which the holders of such Depositary Receipts were entitled upon
such redemption and surrender thereof to the Preferred Stock Depositary.
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VOTING
Upon receipt of notice of any meeting at which the holders of a series of
Preferred Stock deposited with the Preferred Stock Depositary are entitled to
vote, the Preferred Stock Depositary will mail the information contained in such
notice of meeting to the record holders of the Depositary Receipts evidencing
the Depositary Shares which represent such series of Preferred Stock. Each
record holder of Depositary Receipts evidencing Depositary Shares on the record
date (which will be the same date as the record date for such series of
Preferred Stock) will be entitled to instruct the Preferred Stock Depositary as
to the exercise of the voting rights pertaining to the amount of Preferred Stock
represented by such holder's Depositary Shares. The Preferred Stock Depositary
will vote the amount of such series of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company will
agree to take all reasonable action which may be deemed necessary by the
Preferred Stock Depositary in order to enable the Preferred Stock Depositary to
do so. The Preferred Stock Depositary will abstain from voting the amount of
such series of Preferred Stock represented by such Depositary Shares to the
extent it does not receive specific instructions from the holders of Depositary
Receipts evidencing such Depositary Shares. The Preferred Stock Depositary shall
not be responsible for any failure to carry out any instruction to vote, or for
the manner or effect of any such vote made, as long as any such action or
non-action is in good faith and does not result from negligence or wilful
misconduct of the Preferred Stock Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of each Depositary Receipt will be
entitled to the fraction of the liquidation preference accorded each share of
Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION
The Depositary Shares, as such, are not convertible into Common Stock or
any other securities or property of the Company. Nevertheless, if so specified
in the applicable Prospectus Supplement relating to an offering of Depositary
Shares, the Depositary Receipts may be surrendered by holders thereof to the
Preferred Stock Depositary with written instructions to the Preferred Stock
Depositary to instruct the Company to cause conversion of a series of Preferred
Stock represented by the Depositary Shares evidenced by such Depositary Receipts
into whole shares of Common Stock, other shares of Preferred Stock or other
shares of capital stock of the Company, and the Company has agreed that upon
receipt of such instructions and any amounts payable in respect thereof, it will
cause the conversion thereof utilizing the same procedures as those provided for
delivery of Preferred Stock to effect such conversion. If the Depositary Shares
evidenced by a Depositary Receipt are to be converted in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary Shares not to
be converted. No fractional shares of Common Stock will be issued upon
conversion, and if such conversion would result in a fractional share being
issued, an amount will be paid in cash by the Company equal to the value of the
fractional interest based upon the closing price of the Common Stock on the last
business day prior to the conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between the Company and the Preferred Stock
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Receipts or that would be materially and
adversely inconsistent with the rights granted to the holders of the related
series of Preferred Stock will not be effective unless such amendment has been
approved by the existing holders of at least two thirds of the Depositary Shares
evidenced by the Depositary Receipts then outstanding. No amendment shall impair
the right, subject to certain exceptions in the Deposit Agreement, of any holder
of Depositary Receipts to surrender any Depositary Receipt with instructions to
deliver to the holder the related series of Preferred
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Stock and all money and other property, if any, represented thereby, except in
order to comply with law. Every holder of an outstanding Depositary Receipt at
the time any such amendment becomes effective shall be deemed, by continuing to
hold such Receipt, to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby.
The Deposit Agreement may be terminated by the Company upon not less than
30 days' prior written notice to the Preferred Stock Depositary if a majority of
each series of Preferred Stock subject to such Deposit Agreement consents to
such termination, whereupon the Preferred Stock Depositary shall deliver or make
available to each holder of Depositary Receipts, upon surrender of the
Depositary Receipts held by such holder, such number of whole or fractional
shares of each such series of Preferred Stock as are represented by the
Depositary Shares evidenced by such Depositary Receipts together with any other
property held by the Preferred Stock Depositary with respect to such Depositary
Receipts. In addition, the Deposit Agreement will automatically terminate if (i)
all outstanding Depositary Shares issued thereunder shall have been redeemed,
(ii) there shall have been a final distribution in respect of each series of
Preferred Stock subject to such Deposit Agreement in connection with any
liquidation, dissolution or winding up of the Company and such distribution
shall have been distributed to the holders of Depositary Receipts evidencing the
Depositary Shares representing such series of Preferred Stock or (iii) each
share of Preferred Stock subject to such Deposit Agreement shall have been
converted into capital stock of the Company not so represented by Depositary
Shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. In addition, the
Company will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
However, holders of Depositary Receipts will pay certain transfer and other
taxes and governmental charges, as well as the fees and expenses of the
Preferred Stock Depositary for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF PREFERRED STOCK DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary. A successor
Preferred Stock Depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented from or delayed in, by law or any circumstances beyond its control,
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performing their duties thereunder in good faith and without
negligence (in the case of any action or inaction in the voting of a series of
Preferred Stock represented by the Depositary Shares), gross negligence or
willful misconduct, and the Company and the Preferred Stock Depositary will not
be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Receipts, Depositary Shares or shares of a series of Preferred Stock
represented thereby unless satisfactory indemnity is furnished. The Company and
the Preferred Stock Depositary may rely on written advice of counsel or
accountants, or information provided by persons presenting shares of a series of
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Preferred Stock represented thereby for deposit, holders of Depositary Receipts
or other persons believed in good faith to be competent to give such
information, and on documents believed in good faith to be genuine and signed by
a proper party.
In the event the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Company.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock and Common Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities, Preferred Stock or Common Stock. Each series of Warrants will be
issued under a separate warrant agreement (a "Warrant Agreement") to be entered
into between the Company and a bank or trust company, as Warrant Agent (the
"Warrant Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of offered Warrants. The Warrant Agent will act solely as an
agent of the Company in connection with the Warrant certificates relating to the
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holders of Warrant certificates or beneficial owners of
Warrants. The following summaries of certain provisions of the Warrant
Agreements and Warrants do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
Warrant Agreement and the Warrant certificates relating to each series of
Warrants which will be filed with the Commission and incorporated by reference
as an exhibit to the Registration Statement of which this Prospectus is a part
at or prior to the time of the issuance of such series of Warrants.
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will describe
the terms of such Warrants, including, in the case of Warrants for the purchase
of Debt Securities, the following where applicable: (i) the offering price; (ii)
the denominations and terms of the series of Debt Securities purchasable upon
exercise of such Warrants and whether such Debt Securities are Senior Debt
Securities or Subordinated Debt Securities; (iii) the designation and terms of
any series of Debt Securities with which such Warrants are being offered and the
number of such Warrants being offered with each such Debt Security; (iv) the
date, if any, on and after which such Warrants and any related series of Debt
Securities will be transferable separately; (v) the principal amount of the
series of Debt Securities purchasable upon exercise of each such Warrant and the
price at which such principal amount of Debt Securities of such series may be
purchased upon such exercise; (vi) the date on which the right to exercise such
Warrants shall commence and the date (the "Expiration Date") on which such right
shall expire; (vii) whether the Warrants will be issued in registered or bearer
form; (viii) any special United States Federal income tax consequences; (ix) the
terms, if any, on which the Company may accelerate the date by which the
Warrants must be exercised; and (x) any other terms of such Warrants.
In the case of Warrants for the purchase of Preferred Stock or Common
Stock, the applicable Prospectus Supplement will describe the terms of such
Warrants, including the following where applicable: (i) the offering price; (ii)
the aggregate number of shares purchasable upon exercise of such Warrants and
the exercise price; (iii) the designation and terms of the series of Preferred
Stock or Common Stock with which such Warrants are being offered, if any, and
the number of such Warrants being offered with each such Preferred Stock or
Common Stock; (iv) the date, if any, on and after which such Warrants and any
related series of Preferred Stock or Common Stock will be transferable
separately; (v) the date on which the right to exercise such Warrants shall
commence and the Expiration Date; (vi) any special United States Federal income
tax consequences; (vii) the terms, if any, on which the
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Company may accelerate the date by which the Warrants must be exercised; and
(viii) any other terms of such Warrants.
Warrant certificates may be exchanged for new Warrant certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the applicable Warrant Agent or any other office indicated in the applicable
Prospectus Supplement. Prior to the exercise of any Warrant to purchase Debt
Securities, holders of such Warrants will not have any of the rights of holders
of the Debt Securities purchasable upon such exercise, including the right to
receive payments of principal, premium, if any, or interest, if any, on such
Debt Securities or to enforce covenants in the applicable Indenture. Prior to
the exercise of any Warrants to purchase Preferred Stock or Common Stock,
holders of such Warrants will not have any rights of holders of such Preferred
Stock or Common Stock, including the right to receive payments of dividends, if
any, on such Capital Stock, or to exercise any applicable right to vote.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of Debt Securities or number of shares of Preferred Stock or Common
Stock, as the case may be, at such exercise price as shall in each case be set
forth in, or calculable from, the Prospectus Supplement relating to the offered
Warrants. After the close of business on the Expiration Date (or such later date
to which such Expiration Date may be extended by the Company), unexercised
Warrants will become void.
Warrants may be exercised by delivering to the applicable Warrant Agent
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities, Preferred Stock or Common Stock, as
the case may be, purchasable upon such exercise together with certain
information set forth on the reverse side of the Warrant certificate. Warrants
will be deemed to have been exercised upon receipt of payment of the exercise
price in cash or by certified or official bank check, subject to the receipt
within five (5) business days of the Warrant certificate evidencing such
Warrants. Upon receipt of such payment at the corporate trust office of the
applicable Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, issue and
deliver the Debt Securities, Preferred Stock or Common Stock, as the case may
be, purchasable upon such exercise. If fewer than all of the Warrants
represented by such Warrant certificate are exercised, a new Warrant certificate
will be issued for the remaining amount of Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
The Warrant Agreements may be amended or supplemented without the consent
of the holders of the Warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the Warrants and that do not adversely
affect the interests of the holders of the applicable Warrants.
WARRANT ADJUSTMENTS
The applicable Prospectus Supplement will specify the manner, if any, in
which the exercise price of, and the number or amount of securities covered by,
a Warrant for Preferred Stock or Common Stock is subject to adjustment in
certain circumstances.
PLAN OF DISTRIBUTION
The Company may sell the Securities in and/or outside the United States:
(i) through underwriters; (ii) through dealers acting as principal or as agent;
(iii) directly to a limited number of purchasers or to a single purchaser; or
(iv) through agents. The applicable Prospectus Supplement with respect to the
any offering of Securities will set forth the terms of the offering of the
Securities, including the name or names of any underwriters, dealers or agents,
the purchase price of the Securities and the proceeds to the Company from such
sale, any delayed delivery arrangements, any discounts or commissions and other
items constituting compensation allowed or paid to any underwriters, dealers or
agents, any aggregate
27
<PAGE> 40
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any aggregate initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Securities will be named in the Prospectus
Supplement relating to such offering and, if an underwriting syndicate is used,
the managing underwriter or underwriters will be set forth on the cover of such
Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters to purchase the Securities
will be subject to conditions precedent, and the underwriters will be obligated
to purchase all the Securities if any are purchased.
If dealers are utilized in the sale of Securities in respect of which this
Prospectus is delivered, the Company will sell such Securities to the dealers
acting as principals or agents. The dealers may then resell such Securities to
the public at varying prices to be determined by such dealers at the time of
resale. The terms of the transaction will be set forth in the Prospectus
Supplement relating thereto to the extent required by the Securities Act.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Securities in respect to which this Prospectus is delivered will be
named, and any commissions payable by the Company to such agent will be set
forth, in the Prospectus Supplement relating thereto to the extent required by
the Securities Act. Unless otherwise indicated in the Prospectus Supplement, any
such agent will be acting on a reasonable best efforts basis for the period of
its appointment.
The Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales, including the terms of any bidding or auction process, will be described
in the Prospectus Supplement relating thereto.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject only to those conditions set forth in the
applicable Prospectus Supplement, and the Prospectus Supplement will set forth
the commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business or otherwise.
Each series of Securities, other than the Common Stock, will be a new issue
with no established trading market. The Common Stock is listed on the New York
Stock Exchange and the Pacific Stock Exchange. Any Common Stock sold pursuant to
a Prospectus Supplement will be listed on such exchanges, subject to official
notice of issuance. The Company may elect to list any series of Debt Securities,
Preferred Stock, Depositary Shares or Warrants on an exchange, but is not
obligated to do so. If so indicated in the applicable Prospectus Supplement, any
underwriters or agents to or through whom Securities are sold by the Company may
make a market in such Securities, but such underwriters or agents will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any Securities.
28
<PAGE> 41
LEGAL MATTERS
The validity of the Securities is being passed upon for the Company by King
& Spalding, Houston, Texas, and, unless otherwise indicated in the applicable
Prospectus Supplement, for the underwriters, dealers or other agents by Simpson
Thacher & Bartlett, New York, New York.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K of Union Texas Petroleum Holdings, Inc. for the
year ended December 31, 1996, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
With respect to the unaudited consolidated financial information of Union
Texas Petroleum Holdings, Inc. for the three-month periods ended March 31, 1997
and 1996 incorporated by reference in this Prospectus, Price Waterhouse LLP
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
report dated April 22, 1997 incorporated by reference herein, states that they
did not audit and they do not express an opinion on that unaudited consolidated
financial information. Price Waterhouse LLP has not carried out any significant
or additional audit tests beyond those which would have been necessary if their
report had not been included. Accordingly, the degree of reliance on their
report on such information should be restricted in light of the limited nature
of the review procedures applied. Price Waterhouse LLP is not subject to the
liability provisions of section 11 of the Securities Act of 1933 for their
report on the unaudited consolidated financial information because this report
is not a "report" or a "part" of the registration statement prepared or
certified by Price Waterhouse LLP within the meaning of sections 7 and 11 of the
Act.
29
<PAGE> 42
======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds........................ S-2
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends............................ S-2
Description of Series A Preferred
Stock................................ S-2
Certain United States Federal Income
Tax Consequences..................... S-9
Book-Entry Procedures and Settlement... S-9
Underwriting........................... S-11
Legal Matters.......................... S-12
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 3
Ratio of Earnings to Fixed Charges..... 3
Description of Debt Securities......... 4
Description of Capital Stock........... 18
Description of Depositary Shares....... 22
Description of Warrants................ 26
Plan of Distribution................... 27
Legal Matters.......................... 29
Experts................................ 29
</TABLE>
======================================================
======================================================
1,750,000 SHARES
[UNION TEXAS PETROLEUM HOLDINGS, INC. LOGO]
UNION TEXAS PETROLEUM
HOLDINGS, INC.
7.14% SERIES A CUMULATIVE
PREFERRED STOCK
---------------------
PROSPECTUS SUPPLEMENT
---------------------
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
March 3, 1998
======================================================
