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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1997
REGISTRATION NO. 333-25233
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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NABORS INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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515 WEST GREENS ROAD, SUITE 1200
HOUSTON, TEXAS 77067
DELAWARE (281) 874-0035 93-0711613
(State or Other Jurisdiction (Address, Including Zip Code, and Telephone Number, (I.R.S. Employer
of Including Area Code, of Registrant's Principal Executive Identification No.)
Incorporation or Offices)
Organization)
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ANTHONY G. PETRELLO With a copy to:
PRESIDENT AND CHIEF OPERATING OFFICER
NABORS INDUSTRIES, INC. HOWARD M. BERKOWER, ESQ.
515 WEST GREENS ROAD, SUITE 1200 BAKER & MCKENZIE
HOUSTON, TEXAS 77067 805 THIRD AVENUE
(281) 874-0035 NEW YORK, NEW YORK 10122
(Name, Address, Including Zip Code, and Telephone Number, (212) 751-5700
Including Area Code, of Agent for Service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box. [
]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING
TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(3)
- ---------------------------------------------------------------------------------------------------------------------------
Debt Securities..........................................
Preferred Stock, par value $.10 per share................
Common Stock, par value $.10 per share...................
Depositary Shares(4).....................................
Warrants(5)..............................................
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Total............................................ $350,000,000(6) $350,000,000
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TITLE OF SHARES AMOUNT OF
TO BE REGISTERED REGISTRATION FEE
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Debt Securities..........................................
Preferred Stock, par value $.10 per share................
Common Stock, par value $.10 per share...................
Depositary Shares(4).....................................
Warrants(5)..............................................
- -----------------------------------------------------------------------------------------------------------------------
Total............................................ $106,060.61(7)
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(1) The amount to be registered consists of $350,000,000 of an indeterminate
number or amount of Debt Securities, Preferred Stock, Common Stock,
Depositary Shares or Warrants as may from time to time be issued at
indeterminate prices. Pursuant to Rule 429 under the Securities Act of 1933,
as amended, this amount includes $77,500,000 of securities being carried
forward from an earlier registration statement on Form S-3 (No. 333-02477)
which have not been sold.
(2) Such amount in U.S. dollars or the equivalent thereof in one or more foreign
currencies, currency units or composite currencies as shall result in an
initial public offering price for all securities of $350,000,000. The
Prospectus herein covers $350,000,000 of securities. In addition, this
Registration Statement includes such presently indeterminate amount or
number of Debt Securities, Preferred Stock, Common Stock and Depositary
Shares as may be issuable from time to time upon conversion or exchange of
the securities being registered hereunder.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933, as amended. No separate
consideration will be received for any Debt Securities, Preferred Stock,
Common Stock or Depositary Shares issuable upon conversion of or in exchange
for Debt Securities or Preferred Stock.
(4) Such indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. If the Registrant elects to
offer to the public fractional interests in shares of Preferred Stock
registered hereunder, Depositary Receipts will be distributed to persons
purchasing those fractional interests, and shares of Preferred Stock will be
issued to the Depositary under the Deposit Agreement.
(5) Warrants to purchase Debt Securities, Preferred Stock or Common Stock may be
sold separately or with Debt Securities, Preferred Stock or Common Stock.
(6) Includes $50,000,000 of Common Stock that may be sold by or for the account
of selling stockholders.
(7) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
amount of $77,500,000 of securities covered by an earlier Registration
Statement on Form S-3 (No. 333-02477) is being carried forward and the
corresponding registration fee of $23,484.85 was previously paid at that
time. Accordingly, $82,575.76 is paid herewith.
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The Prospectus contained in this Registration Statement relates to the
Registration Statement on Form S-3 (No. 333-02477) of the Registrant, and it is
intended to be the combined prospectus referred to in Rule 429 under the
Securities Act of 1933, as amended. This Registration Statement, which is a new
registration statement, also constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 333-02477 and such Post-Effective Amendment shall
hereafter become effective concurrently with the effectiveness of this
Registration Statement in accordance with Section 8(c) of the Securities Act of
1993, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 29, 1997
PROSPECTUS
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[NABORS $350,000,000
INDUSTRIES, NABORS INDUSTRIES, INC.
INC. LOGO] DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK,
DEPOSITARY SHARES AND WARRANTS
</TABLE>
Nabors Industries, Inc. (collectively with its subsidiaries (unless the
context otherwise requires), the "Company") may from time to time offer,
together or separately, in amounts, at prices and on terms to be determined at
the time of the offering, its (i) debt securities (the "Debt Securities"), which
may be either senior debt securities (the "Senior Debt Securities") or
subordinated debt securities (the "Subordinated Debt Securities"), (ii) shares
of its preferred stock, $.10 par value per share (the "Preferred Stock"), which
may be issued in the form of Depositary Shares (as defined herein) evidenced by
Depositary Receipts (as defined herein), (iii) shares of its common stock, $.10
par value per share (the "Common Stock"), and (iv) warrants to purchase Debt
Securities, Preferred Stock or Common Stock of the Company, as the Company shall
designate at the time of the offering (the "Warrants"). (The Debt Securities,
Preferred Stock, Depositary Shares, Common Stock and Warrants are collectively
called the "Securities.") Securities may be sold for U.S. dollars or one or more
foreign currencies, currency units or composite currencies -- in each case, as
the Company specifically designates.
In addition, shares of Common Stock may be offered from time to time by
stockholders of the Company who acquire their shares in connection with future
acquisitions by the Company ("Selling Stockholders"). Any Selling Stockholders
will be identified, and the number of shares to be offered by them will be
specified, in a Prospectus Supplement to this Prospectus. The Company will not
receive proceeds of any sale of shares by the Selling Stockholders.
The Securities offered pursuant to this Prospectus may be issued in one or
more series or issuances and will be limited to $350,000,000 in aggregate
initial public offering price or the equivalent in one or more foreign
currencies, currency units or composite currencies. Certain specific terms of
the particular Securities in respect of which this Prospectus is being delivered
will be set forth in an accompanying Prospectus Supplement, including, where
applicable, (i) in the case of Debt Securities, the specific title, aggregate
principal amount, the denomination, whether such Debt Securities are secured or
unsecured obligations, maturity, premium, if any, the interest, if any (which
may be fixed, floating or adjustable rate), the time and method of calculating
payment of interest, if any, the place or places where principal of (and
premium, if any) and interest, if any, on such Debt Securities will be payable,
the currency, currency unit or composite currency in which principal of (and
premium, if any) and interest, if any, on such Debt Securities will be payable,
any terms of redemption at the option of the Company or the holder, any sinking
fund provisions, terms for any conversion or exchange into Securities or other
securities of the Company (however, any such other securities issuable upon
conversion or exchange of Debt Securities will be subject to registration under
the Securities Act (as defined herein) or an applicable exemption therefrom),
the initial public offering price, listing (if any) on a securities exchange and
other terms, (ii) in the case of Preferred Stock, the specific title, the
aggregate number of shares offered, any dividend (including the method of
calculating payment of dividends), liquidation, redemption, voting and other
rights, any terms for any conversion or exchange into Securities or other
securities of the Company (however, any such other securities issuable upon
conversion or exchange of Preferred Stock will be subject to registration under
the Securities Act or an applicable exemption therefrom), the initial public
offering price, listing (if any) on a securities exchange and other terms, (iii)
in the case of Warrants, the duration, purchase price, exercise price and
detachability of such Warrants, any listing of the Warrants or underlying
Securities on a securities exchange, a description of the securities for which
each Warrant is exercisable and other terms, and (iv) in the case of Depositary
Shares, the fractional share of Preferred Stock represented by each such
Depositary Share. If so specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued in whole or in part in the form of one or
more temporary or permanent global securities ("Global Securities").
The Common Stock is listed on the American Stock Exchange under the trading
symbol "NBR." Any Common Stock sold pursuant to a Prospectus Supplement will be
listed on that exchange, subject to official notice of issuance. On April ,
1997, the closing price of a share of Common Stock on that exchange was
$ per share.
Unless otherwise specified in a Prospectus Supplement, the Senior Debt
Securities, when issued, will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated Debt
Securities, when issued, will be subordinated in right of payment to all Senior
Debt (as defined herein) of the Company.
The Prospectus Supplement may contain information concerning certain United
States federal income tax considerations applicable to the Securities offered.
This Prospectus may not be used to consummate sales of Securities, unless
accompanied by a Prospectus Supplement. Any statement contained in this
Prospectus will be deemed to be modified or superseded by any inconsistent
statement contained in an accompanying Prospectus Supplement.
SEE "RISK FACTORS" ON PAGE 3 HEREOF FOR A DESCRIPTION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Securities will be sold directly, through agents, underwriters or
dealers as designated from time to time, or through a combination of such
methods. If agents of the Company or any dealers or underwriters are involved in
the sale of the Securities in respect of which this Prospectus is being
delivered, the names of the agents, dealers or underwriters and any applicable
commissions or discounts will be set forth in or may be calculated from the
Prospectus Supplement with respect to such Securities. See "Plan of
Distribution" for possible indemnification arrangements with agents, dealers and
underwriters.
THE DATE OF THIS PROSPECTUS IS , 1997.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities being
offered by this Prospectus. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain items of which are contained in exhibits and
schedules to the Registration Statement as permitted by the rules and
regulations of the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits thereto, and the financial statements and
notes filed as a part thereof. Statements made in this Prospectus concerning the
contents of any contract, agreement or other document filed with the Commission
as an exhibit are not necessarily complete. With respect to each such contract,
agreement or other document filed with the Commission as an exhibit, reference
is made to the exhibit for a more complete description of the matter involved,
and each such statement shall be deemed qualified in its entirety by such
reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. The reports, proxy statements and other information filed by the
Company with the Commission pursuant to the informational requirements of the
Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549, and at the Commission's Regional Offices at 7 World Trade
Center, 13th Floor, New York, New York 10048 and the Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
documents can also be obtained at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington
D.C. 20549. The Company is an electronic filer under the EDGAR (Electronic Data
Gathering, Analysis and Retrieval) system maintained by the Commission. The
Commission maintains a Web site (http://www.sec.gov) on the Internet that
contains reports, proxy and information statements and other information
regarding companies that file electronically with the Commission. In addition,
documents filed by the Company can be inspected at the offices of the American
Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which the Company has filed with the Commission,
are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996 (the "1996 Form 10-K");
(2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1996;
(3) The Company's Current Report on Form 8-K filed with the Commission on
March 3, 1997; and
(4) The description of the Common Stock and the Preferred Stock contained
in Amendment No. 1 to the Registration Statement on Form 8-A (File No.
1-9245) filed with the Commission on May 20, 1992, and any subsequent
amendment thereto filed for the purposes of updating such description.
All documents and reports filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents or reports. Any statement contained in a
document which is, or is 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 other subsequently filed
document which also is, or is deemed to be, incorporated by reference herein)
modifies or supersedes the previous statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request, a copy of any document incorporated by reference in this Prospectus,
other than exhibits to any such document not specifically described above.
Requests for such documents should be directed to Daniel McLachlin, Corporate
Secretary, Nabors Industries, Inc., 515 West Greens Road, Suite 1200, Houston,
Texas 77067; telephone number: (281) 874-0035.
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RISK FACTORS
In addition to the other information contained or incorporated by reference
in this Prospectus or any Prospectus Supplement, the following factors should be
considered carefully by prospective investors in evaluating the Company before
purchasing any of the securities offered hereby. The information contained or
incorporated by reference in this Prospectus or any Prospectus Supplement
includes forward-looking statements that involve risks and uncertainties, a
number of which are identified in this "Risk Factors" section. These risks and
uncertainties include, without limitation, industry conditions and the
variability of demand for contract drilling and related oilfield services,
intense competition, operating risks inherent in a hazardous industry, the
adequacy and availability of insurance, risks associated with international
operations, regulations pertaining to environmental matters and the other
matters detailed or referred to below and from time to time in the Company's
other reports filed with the Commission. The Company's actual results may differ
materially from the results set forth in or implied by any forward-looking
statements, due to such risks and uncertainties.
Business-Related Risks. The information set forth under the captions
"Industry Conditions, Competition and Seasonality," "Operating Risks and
Insurance," "International Operations" and "Governmental Matters" in Part I of
the Company's 1996 Form 10-K, in addition to the other information included in
the 1996 Form 10-K, is specifically incorporated by reference herein.
International Operations. A significant portion of the Company's business
is derived from international markets, including major operations in the Middle
East and South and Central America, as well as other operations in the
Commonwealth of Independent States, the Far East and Africa. Such operations may
be subject to various risks, including the risk of war and civil disturbances
and government activities, that may limit or disrupt markets, restrict the
movement of funds or result in the deprivation of contract rights or the taking
of property without fair compensation. In certain countries, such operations may
be subject to the additional risk of fluctuating currency values and exchange
controls. In the international markets in which the Company operates, it is
subject to various laws and regulations with respect to the operation and
taxation of its business and the import and export of its equipment from country
to country, the imposition, application and interpretation of which can prove to
be uncertain.
Dividend Policies; Restrictions on Payment of Dividends. The Company does
not anticipate that it will pay any dividends on the Common Stock in the
foreseeable future. Certain of the Company's debt instruments include covenants
restricting the Company's ability to pay dividends or to make certain other
distributions to stockholders. In connection with the offering of any
dividend-paying Preferred Stock hereby, the applicable Prospectus Supplement
will set forth the amount available for distribution as of the end of the most
recent fiscal period under the Company's debt instruments.
Holding Company Structure. The Company is a holding company, and it
conducts substantially all of its operations through subsidiaries. Consequently,
the Company will rely principally on dividends or advances from its subsidiaries
for the funds necessary to, among other things, pay principal of and any
interest or premium on the Debt Securities and the other indebtedness of the
Company. The ability of the Company's subsidiaries to pay dividends is subject
to applicable state law and certain other restrictions. Any right of the holders
of the Debt Securities to participate in the assets of any subsidiary upon the
subsidiary's liquidation or recapitalization will be effectively subordinated to
the claims of the subsidiary's creditors and preferred stockholders (if any),
except to the extent that the Company is itself recognized as a creditor of the
subsidiary.
Absence of Public Market for Certain of the Securities. All Debt
Securities, Preferred Stock, Depositary Shares and Warrants will be new issues
of securities with no established trading market. Any underwriters to whom Debt
Securities, Preferred Stock, Depositary Shares or Warrants are sold by the
Company for public offering and sale may make a market in such Securities, but
the underwriters 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 any secondary market for Debt Securities, Preferred Stock,
Depositary Shares or Warrants.
Market Risk with Respect to Common Stock; Certain Investment
Limitations. The Common Stock is listed for trading on the American Stock
Exchange. However, the prices at which shares of Common Stock trade may depend
on many factors, including prevailing interest rates, markets for similar
securities, industry
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conditions and the performance of, and investor expectations for, the Company.
No assurance can be given that a holder of shares of Common Stock will be able
to sell those shares at any particular price. Certain institutional investors
may invest only in dividend-paying equity securities or may operate under other
restrictions that may prohibit or limit their ability to invest in the Common
Stock.
Shares Available for Future Sale. As of March 31, 1997, there were
93,310,006 shares of Common Stock outstanding. As of such date, 19,729,808
shares of Common Stock were reserved for issuance pursuant to option and
employee benefit plans and 9,517,242 shares of Common Stock were reserved for
issuance upon the conversion of the 5% Notes (as defined herein). The exercise
price of many of these options is substantially lower than the trading prices of
Common Stock on that date. In addition, the exercise of certain of these options
may cause the Company to issue to the exercising holders additional options to
purchase shares of Common Stock at an exercise price equal to the fair market
value of Common Stock on the date of issuance, and the Company may issue
additional options in the future under stock option plans or otherwise. Certain
of the shares to be issued pursuant to the exercise of options may be
"restricted securities," as that term is defined in Rule 144 promulgated under
the Securities Act. The sale, or availability for sale, of substantial amounts
of Common Stock in the public market due to the exercise of options (and, where
applicable, sales pursuant to Rule 144) could adversely affect the prevailing
market price of the Common Stock and could impair the Company's ability to raise
additional capital through the sale of equity securities.
Reliance on Key Personnel. The Company's business is dependent to a
significant extent upon the performance of certain key individuals, including
Eugene M. Isenberg, Anthony G. Petrello and Richard A. Stratton. Each of these
individuals has entered into an employment agreement with the Company. The loss
of the services of Messrs. Isenberg, Petrello or Stratton could have a material
adverse effect on the Company.
Possible Deterrents to Changes of Control. The board of directors of the
Company is divided into three classes of directors, with each class serving a
staggered three-year term. See "Description of Capital Stock and Depositary
Shares -- Certain Certificate of Incorporation and By-Law Provisions." In
addition, the board of directors has the authority to issue up to 10,000,000
shares of Preferred Stock and to determine the price, rights (including voting
rights), conversion ratios, preferences and privileges of that stock without
further vote or action by the holders of the Common Stock. Although the Company
has no present plans to issue shares of Preferred Stock, the classified board
and the Board's ability to issue additional shares of Preferred Stock may
discourage, delay or prevent changes in control of the Company that are not
approved by the board of directors, thereby preventing certain stockholders of
the Company from realizing a possible premium on their shares.
THE COMPANY
The Company is the largest land drilling contractor in the world. The
Company was incorporated in Delaware in 1978 and has principally engaged in oil,
gas and geothermal land drilling operations in Alaska, the lower 48 states of
the United States and Canada, and internationally in the Middle East, the Far
East, the Commonwealth of Independent States, North and West Africa and South
and Central America. The Company, through its subsidiaries, also provides
offshore drilling, well servicing and workover services in the Gulf of Mexico,
Alaska's Cook Inlet and several international markets. A subsidiary of the
Company provides well servicing and workover services, primarily in the Rocky
Mountains and mid-continent region of the United States. The Company also
provides oilfield management, engineering, transportation, construction,
maintenance and other support services in selected domestic and international
markets. Another subsidiary of the Company, Canrig Drilling Technology Ltd.,
manufactures top drives for a broad range of drilling rig applications.
Since the current management group began directing the Company in 1987, the
Company's business philosophy has been to establish and maintain a conservative
and flexible financial posture, to build a diverse portfolio of market positions
to mitigate risk and provide potential for growth, to forge long-term
relationships with customers, to build a cadre of talented and experienced
employees, to grow and remain profitable in any market environment and to
position the business for the future by maintaining flexibility. This philosophy
has been implemented primarily through strategic acquisitions and internal
growth in existing and new markets.
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The Company also has advanced this philosophy by entering into strategic
alliances with customers and by providing integrated drilling, engineering and
other oilfield services responsive to customers' needs.
Acquisitions and Internal Growth. The Company's business philosophy has
been implemented through strategic acquisitions and internal growth in existing
and new markets. Since 1988, through acquisition of other drilling companies,
asset purchases and internal expansion, the Company has grown from a business
centered principally in Canada and Alaska to an international company operating
on land and offshore in many of the major oil, gas and geothermal markets in the
world. In 1988, the Company's rig fleet consisted of 44 land drilling rigs. As
of December 31, 1996, the active Company-owned rig fleet consisted of 362 land
drilling rigs, 34 offshore rigs and 78 land workover and well servicing rigs.
Strategic Alliances. The Company's business philosophy has also been
advanced by entering into strategic alliances with customers. An increasing
number of customers have been seeking to benefit from exploration and
development drilling programs by establishing continuing relationships, or
alliances, with a smaller number of preferred drilling contractors. These
alliances can result in long-term work and increased profitability for drilling
contractors that are selected as partners in the alliance. The Company has been
selected by operators as alliance partners in Alaska, the lower 48 states of the
United States and Canada.
Drilling and Engineering Services. The Company's business philosophy has
also been advanced by providing drilling-related services and management of
drill site activities to its customers. Many major oil and gas companies are
reducing the number of services they provide and the number of service
contractors at a drill site, and are requiring the contractors remaining provide
such drilling-related services and management. The Company also seeks to provide
innovative, quality engineering and technical support from its drilling and
oilfield support operations. The Company provides engineering services to all of
its subsidiaries and to its worldwide customers from its Houston-based
engineering groups.
USE OF PROCEEDS
The Company will receive no proceeds from the sale of shares of Common
Stock by the Selling Shareholders. With respect to offerings of Securities by
the Company, except as otherwise set forth in a Prospectus Supplement, the net
proceeds from the sale of the Securities will be used for future business
acquisitions and other general corporate purposes, including working capital,
investment in subsidiaries, the repayment of existing debt and/or the repurchase
of shares of Common Stock or other securities. The precise amounts and timing of
the application of the net proceeds for corporate purposes will depend upon a
variety of factors, including the Company's funding requirements and the
availability of alternative sources of funding. The Company routinely reviews
acquisition opportunities. Any proposal to use proceeds from any offering of
Securities in connection with an acquisition will be disclosed in the Prospectus
Supplement relating to such offering.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods set forth
below has been computed on a consolidated basis and should be read in
conjunction with the Company's consolidated financial statements (including the
notes thereto) set forth or incorporated by reference in the Company's 1996 Form
10-K for the fiscal year ended September 30, 1996 and the Company's quarterly
report on Form 10-Q for the fiscal quarter ended December 31, 1996.
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FISCAL YEARS ENDED SEPTEMBER 30,
THREE MONTHS ENDED ------------------------------------
DECEMBER 31, 1996 1996 1995 1994 1993 1992
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Ratio of Earnings to Fixed Charges..... 9.12 7.09 7.67 1.65 5.35 6.50
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of pretax income from continuing operations plus fixed
charges (excluding capitalized interest). "Fixed charges" represent interest
incurred (whether expensed or capitalized), amortization of debt expense, and
that portion of rental
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expense on operating leases deemed to be the equivalent of interest. No
Preferred Stock was outstanding during any of the periods presented and, as a
result, the ratio of earnings to combined fixed charges and Preferred Stock
dividends was the same as the ratio of earnings to fixed charges.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Senior Debt Securities are to be issued under an indenture (the "Senior
Indenture"), to be entered into between the Company and a trustee named in the
applicable Prospectus Supplement. The Subordinated Debt Securities are to be
issued under a separate indenture (the "Subordinated Indenture"), to be entered
into between the Company and a trustee named in the applicable Prospectus
Supplement. (The Senior Indenture and the Subordinated Indenture are referred to
collectively herein as the "Indentures." The trustee under the Senior Indenture
and the trustee under the Subordinated Indenture are each referred to herein as
the "Trustee.") The following summaries of certain provisions of the Senior Debt
Securities, the Subordinated Debt Securities and the Indentures do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Indentures applicable to a particular
series of Debt Securities, including the definitions therein of certain terms.
Copies of the forms of the Indentures are filed as exhibits to the Registration
Statement of which this Prospectus is a part, and the following summary is
qualified in its entirety by reference to such exhibits. See "Available
Information." Article and Section references used herein are references to the
applicable Indenture. Capitalized terms not otherwise defined in this
Description of Debt Securities will have the meaning given in the Indentures.
Wherever particular Sections, Articles or defined terms of the Indentures are
referred to, it is intended that those Sections, Articles or defined terms shall
be incorporated herein by reference.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and each Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more series.
Unless otherwise specified in the applicable Prospectus Supplement, the Senior
Debt Securities, when issued, will be unsecured and unsubordinated obligations
of the Company and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company. The Subordinated Debt Securities,
when issued, will be subordinated in right of payment to the prior payment in
full of all Senior Debt (as defined below) of the Company, as described under
"-- Subordination of Subordinated Debt Securities" and in the Prospectus
Supplement applicable to an offering of Subordinated Debt Securities. The Debt
Securities will be payable in currency of the United States or in such other
foreign currency, currency unit or composite currency as may be specified in the
applicable Prospectus Supplement.
The Prospectus Supplement relating to the offering of particular Debt
Securities (the "Offered Debt Securities") will set forth whether the Offered
Debt Securities will be Senior Debt Securities or Subordinated Debt Securities,
and will further set forth (to the extent applicable) the following terms of the
Offered Debt Securities: (1) the title of the Offered Debt Securities; (2) any
limit on the aggregate principal amount of the Offered Debt Securities; (3) the
Person to whom any interest on the Offered Debt Securities will be payable, if
other than the Person in whose name such Offered Debt Securities are registered
on any Regular Record Date; (4) the date or dates, or the method or methods (and
related procedures) by which such date or dates will be determined or extended,
on which the principal of the Offered Debt Securities will be payable; (5) the
rate or rates per annum (which may be fixed, floating or adjustable) at which
the Offered Debt Securities will bear interest, if any, or the formula pursuant
to which such rate or rates shall be determined, the date or dates from which
such interest will accrue and the dates on which such interest, if any, will be
payable and the Regular Record Dates for such interest payment dates; (6)
whether the Offered Debt Securities will be secured; (7) the place or places
where principal of (and premium, if any) and interest, if any, on the Offered
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<PAGE> 8
Debt Securities will be payable; (8) if applicable, the price at which, the
periods within which and the terms and conditions upon which the Offered Debt
Securities may be redeemed in whole or in part at the option of the Company; (9)
if applicable, any obligation of the Company to redeem or purchase Offered Debt
Securities pursuant to any sinking fund or analogous provision or at the option
of a Holder thereof, and the period or periods within which, the price or prices
at which and the terms and conditions upon which the Offered Debt Securities
will be redeemed or purchased, in whole or in part; (10) if applicable, the
terms of any right to convert or exchange the Offered Debt Securities into
Securities or other securities of the Company (provided, however, that any such
other securities issuable upon conversion or exchange of Offered Debt Securities
will be subject to registration under the Securities Act or an applicable
exemption therefrom); (11) if other than denominations of $1,000 and any
integral multiple thereof (or the equivalent thereof in one or more foreign
currencies, currency units or composite currencies), the denominations in which
the Offered Debt Securities will be issuable; (12) if the amount of payments of
principal of (or premium, if any) or interest, if any, on the Offered Debt
Securities may be determined with reference to one or more indices, the manner
in which such amounts will be determined; (13) if other than currency of the
United States, one or more foreign currencies, currency units or composite
currencies in which the Offered Debt Securities are to be denominated; (14) if
other than the coin or currency in which the Offered Debt Securities are to be
denominated, the coin or currency in which payment of the principal of or
interest on the Offered Debt Securities shall be payable; (15) the price or
prices (expressed as a percentage of the principal amount thereof) at which such
Debt Securities will be issued and the portion of the principal amount of the
Offered Debt Securities, if other than the principal amount thereof, payable
upon acceleration of maturity thereof; (16) whether all or any part of the
Offered Debt Securities will be issued in the form of a Global Security or
Securities and, if so, the depositary for, and other terms relating to, such
Global Security or Securities; (17) whether any of the Offered Debt Securities
are Original Issue Discount Securities (as defined herein); (18) whether the
interest, if any, on the Offered Debt Securities is to be payable in securities
of the Company, and the terms and conditions applicable to any such payment;
(19) any event or events of default applicable with respect to the Offered Debt
Securities in addition to those provided in the Indentures; (20) any other
covenant or warranty included for the benefit of the Offered Debt Securities in
addition to (and not inconsistent with) those included in the Indentures for the
benefit of Debt Securities of all series, or any other covenant or warranty
included for the benefit of the Offered Debt Securities in lieu of any covenant
or warranty included in the Indentures for the benefit of Debt Securities of all
series, or any provision that any covenant or warranty included in the
Indentures for the benefit of Debt Securities of all series shall not be for the
benefit of the Offered Debt Securities, or any combination of such covenants,
warranties or provisions; (21) any restriction or condition on the
transferability of the Offered Debt Securities; (22) any authenticating or
paying agents, registrars, conversion agents or other agents with respect to the
Offered Debt Securities; and (23) any other terms of the Offered Debt
Securities. (Indentures, Section 301.) Debt Securities may also be issued under
the Indentures upon the exercise of Warrants. See "Description of Warrants."
Debt Securities may be issued at a discount from their stated principal
amount. Certain United States federal income tax considerations applicable to
any Debt Security issued with original issue discount (an "Original Issue
Discount Security") and any Debt Security on which the interest is to be payable
in securities of the Company may be described in an applicable Prospectus
Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency, currency unit or composite currency or if the principal of
(and premium, if any) and interest on any series of Debt Securities is payable
in one or more foreign currencies, currency units or composite currencies, the
restrictions, elections, general tax considerations, specific terms and other
information with respect to such Debt Securities and such foreign currencies,
currency units or composite currencies will be set forth in an applicable
Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued as registered securities without
coupons in denominations of $1,000 or any integral multiple of $1,000 (or the
equivalent thereof in one or more foreign currencies, currency units or
composite currencies). (Indentures, Section 302.) No service charge will be made
for any transfer or exchange of such Offered Debt
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<PAGE> 9
Securities, but the Company or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Indentures, Section 305.)
Since the Company is a holding company, the rights of the Company, and
hence the rights of creditors of the Company (including the Holders of the Debt
Securities), to participate in any distribution of the assets of any subsidiary
upon its liquidation or reorganization or otherwise are necessarily subject to
the prior claims of creditors of the subsidiary, except to the extent that the
Company may be recognized as a creditor of the subsidiary. Generally, the Debt
Securities will be effectively subordinated to all existing and future
indebtedness of the Company's operating subsidiaries.
Unless otherwise specified in an applicable Prospectus Supplement, the
Indentures will not contain any provisions that limit the ability of the Company
or any subsidiary to incur indebtedness or that afford Holders of the Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Company or any subsidiary.
Other Indebtedness. Certain of the Company's existing debt instruments
impose, and future debt instruments may impose, certain restrictions on the
Company, including restrictions on the payment of dividends and certain business
combinations, and require the Company to maintain certain financial ratios. On
May 28, 1996, the Company issued $172.5 million of 5% Convertible Subordinated
Notes with a scheduled maturity on May 15, 2006 (the "5% Notes"). Interest on
the 5% Notes is payable semi-annually on May 15 and November 15 of each year
commencing November 15, 1996. The 5% Notes are convertible into common shares of
the Company at any time, at a conversion price of $18.125 per share, subject to
an adjustment in certain events. The 5% Notes are redeemable at the option of
the Company, in whole or in part, at any time on or after May 15, 1999,
initially at 103.5% and at decreasing prices thereafter to 100% at maturity, in
each case together with accrued and unpaid interest. The 5% Notes also may be
repaid at the option of the holder at 101%, together with accrued and unpaid
interest, any time prior to May 15, 2006 if there is a change in control, as
defined in the subordinated indenture. The proceeds from the 5% Notes were used
to repay several term loans and reduce outstanding borrowings on the Company's
credit facilities. The remaining proceeds are to be used for general corporate
purposes, including working capital.
The Company issued 9.18% Senior Secured Notes due July 31, 2006 in the
principal amount of $40.0 million (the "9.18% Notes") to the John Hancock Mutual
Life Insurance Company, pursuant to an Amended and Restated Note Purchase
Agreement dated October 1, 1992. The 9.18% Notes impose certain restrictions on
the Company, including restrictions on additional borrowings, liens,
transactions with affiliates, dividends and other payments in respect of capital
stock and certain business combinations. The Company may pay dividends to the
extent that the Company's cumulative dividends, plus certain other payments
since March 31, 1989, do not exceed 50% of the Company's cumulative net income
since March 31, 1989, plus the proceeds of any offering of equity securities of
the Company that are not redeemable at the option of the holder of the
securities. As of September 30, 1996, retained earnings available for dividends
totaled approximately $178 million. Also, proceeds from the sale of certain
assets must be used to prepay the 9.18% Notes to the extent that an amount equal
to those proceeds is not invested by the Company during a two-year period. The
9.18% Notes also require that certain financial tests be met by the Company on a
consolidated basis, the most restrictive of which requires working capital to be
in excess of $5.0 million. The 9.18% Notes are collateralized by the pledge of
all of the shares of one of the Company's subsidiaries operating in the Gulf of
Mexico and certain other subsidiary assets. Interest on the 9.18% Notes is
payable semi-annually on July 31 and January 31 of each year.
During 1995, a subsidiary of the Company entered into a revolving loan
agreement with a financial institution whereby it can borrow up to $20.0 million
for the construction of certain drilling equipment. Borrowings under the
agreement are guaranteed by the Company and bear interest at 90-day LIBOR plus
.50%. As of December 31, 1996, the amount of outstanding borrowings under this
agreement was approximately $13.0 million.
The Company has available lines of credit with a number of banks that
permit borrowings of up to $64.5 million at interest rates generally not to
exceed, at the option of the Company, each bank's prime rate or
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LIBOR plus .75%. Under these lines of credit, the Company had short-term
borrowings and letters of credit outstanding of approximately $20.2 million as
of December 31, 1996.
The information included in item 8 (entitled "Financial Statements and
Supplementary Data") in Part II of the Company's 1996 Form 10-K is specifically
incorporated by reference herein.
EVENTS OF DEFAULT AND NOTICE THEREOF
Unless otherwise specified in the applicable Prospectus Supplement, the
following events are defined in the Indentures as "Events of Default" with
respect to Debt Securities of any series: (1) failure to pay principal
(including any sinking fund payment) of, or premium (if any) on, any Debt
Security of that series when due (in the case of the Subordinated Indenture,
whether or not payment is prohibited by the subordination provisions) and such
failure continues for a period of 10 days; (2) failure to pay interest, if any,
on any Debt Security of that series when due and such failure continues for a
period of 30 days; (3) failure by the Company to perform any other covenant in
the Indentures (other than a covenant included in the Indentures solely for the
benefit of a series of Debt Securities other than that series) which continues
for a period of 90 days after written notice to the Company; (4) due
acceleration of any indebtedness for borrowed money in a principal amount in
excess of $25.0 million for which the Company or any Principal Subsidiary is
liable, including Debt Securities of another series, or a default by the Company
or any Principal Subsidiary in the payment at final maturity of outstanding
indebtedness for borrowed money in a principal amount in excess of $25.0
million, and such acceleration or default at maturity shall not be waived,
rescinded or annulled within 30 days after written notice to the Company
thereof, unless such acceleration or default at maturity shall be remedied or
cured by the Company or such Principal Subsidiary or rescinded, annulled or
waived by the holders of such indebtedness, in which case such acceleration or
default at maturity shall not constitute an Event of Default under this
provision; and (5) certain events of insolvency, reorganization, receivership or
liquidation of the Company. (Indentures, Section 501.)
No Event of Default with respect to Debt Securities of a particular series
will necessarily constitute an Event of Default with respect to Debt Securities
of any other series. If an Event of Default with respect to any outstanding
series of Debt Securities occurs and continues, then either the Trustee or the
Holders of at least 25% in principal amount of the outstanding Debt Securities
of that series may declare the principal amount (or, if the Debt Securities of
that series are Original Issue Debt Securities, such portion of the principal
amount as may be specified in the terms of that series) of all Debt Securities
of that series to be due and payable immediately; however, under certain
circumstances, the Holders of a majority in aggregate principal amount of
outstanding Debt Securities of that series may rescind or annul such declaration
and its consequences. (Indentures, Section 502.)
Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to the principal amount of such Original Issue
Discount Securities due on acceleration upon the occurrence of an Event of
Default and the continuation thereof.
The Trustee is not charged with knowledge of any Event of Default unless
written notice thereof has been given to the Trustee by the Company, the Paying
Agent or Holders of at least 25% in principal amount of the outstanding Debt
Securities of that series. (Indentures, Section 501.) Each Indenture provides
that the Trustee may withhold notice to the Holders of the Debt Securities of
any default (except in payment of principal (or premium, if any) or interest, if
any) if it considers it in the interest of the Holders of the Debt Securities to
do so. (Indentures, Section 602.) The Company must furnish annually to the
Trustee a statement by one of certain specified officers of the Company as to
the compliance with all conditions and covenants of the Indentures. (Indentures,
Section 1004.)
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series will 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 that series, and to waive certain
defaults. (Indentures, Sections 512 and 513.)
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The Indentures provide that, if an Event of Default occurs and continues,
then the Trustee must exercise such of its rights and powers under the
Indentures, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs. (Indentures, Section 601.) Subject to these provisions,
the Trustee will be under no obligation to exercise any of its rights or powers
under the Indentures at the request of any of the Holders of Debt Securities
unless they have offered to the Trustee security or indemnity in form and
substance reasonably satisfactory to the Trustee against the costs, expenses and
liabilities that it might incur in compliance with the Holders' request.
(Indentures, Section 603.)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indentures or for any remedy thereunder,
unless (1) that Holder has previously given to the Trustee written notice of a
continuing Event of Default, (2) the Holders of at least 25% in principal amount
of the outstanding Debt Securities of the same series have made a written
request, and offered indemnity to the Trustee in form and substance reasonably
satisfactory to the Trustee, to institute the proceeding as Trustee, (3) the
Trustee has not received from the Holders of a majority in principal amount of
the outstanding Debt Securities of the same series a direction inconsistent with
the request, and (4) the Trustee has failed to institute such proceeding within
60 days of the written request therefor. (Indentures, Section 507.) However,
these limitations do not apply to a suit instituted by a Holder of a Debt
Security for enforcement of payment of the principal of (or premium, if any) or
interest, if any, on that Holder's Debt Security on or after the respective due
dates expressed in that Debt Security, or of the right to convert that Holder's
Debt Security in accordance with the Indentures (if applicable). (Indentures,
Section 508.)
MODIFICATION AND WAIVER
Each Indenture allows the Company and the Trustee, from time to time,
without the consent of the Holders of any series of Debt Securities, to amend
the Indenture or the applicable series of Debt Securities for certain specified
purposes, including curing ambiguities or inconsistencies and making any change
that does not adversely affect the rights of any Holder of that series of Debt
Securities. (Indentures, Section 901.) Modifications and amendments of the
Indentures may also be made by the Company and the Trustee, with the consent of
the Holders of not less than a majority of principal amount of each series of
the outstanding Debt Securities issued under the Indentures which is affected by
the modification or amendment; however, no such modification or amendment may,
without the consent of each Holder of a Debt Security affected thereby: (1)
change the Stated Maturity of the principal of or any installment of principal
or interest, if any, on any such Debt Security, except that, with the consent of
the Holders of not less than 75% of the outstanding Debt Securities of any
series, the Company may postpone any interest payment in respect of that series
for a period not to exceed three years; (2) reduce the principal amount of (or
premium, if any) or the interest rate, if any, on any such Debt Security or the
principal amount due upon acceleration of any Original Issue Discount Security;
(3) change the place or currency of payment of principal of (or premium, if any)
or the interest, if any, on any such Debt Security; (4) impair the right to
institute suit for the enforcement of any such payment on or with respect to any
such Debt Security; (5) reduce the percentage of the principal amount of Debt
Securities necessary to modify or amend the Indentures; (6) in the case of the
Subordinated Indenture, modify the subordination provisions in a manner adverse
to the holders of the Subordinated Debt Securities; or (7) modify the foregoing
requirements or reduce the percentage of outstanding Debt Securities necessary
to waive compliance with certain provisions of the Indentures or to waive
certain defaults. (Indentures, Section 902.)
The holders of at least a majority of the aggregate principal amount of the
outstanding Debt Securities of any series may, on behalf of all Holders of that
series, waive compliance by the Company with any of the provisions of the
Indentures and waive any past default under the applicable Indenture, except a
default in the payment of principal (and premium, if any), or interest (if any)
or in the performance of certain covenants. (Indentures, Sections 908 and 513.)
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DEFEASANCE AND COVENANT DEFEASANCE
The Indentures allow the Company to elect either (1) to defease and be
discharged from all of its obligations with respect to any series of Debt
Securities (including, in the case of Subordinated Debt Securities, the
provisions described under "-- Subordination of Subordinated Debt Securities"
and except for the obligations to exchange or register the transfer of such Debt
Securities, to replace temporary, mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of such Debt Securities,
and to hold monies for payments in trust) ("defeasance"), or (2) to be released
from its obligations with respect to any series of Debt Securities concerning
the restrictions described under "-- Consolidation, Merger or Sale of Assets"
and any other covenants applicable to such Debt Securities (including, in the
case of Subordinated Debt Securities, the provisions described under
"--Subordination of Subordinated Debt Securities") which are subject to covenant
defeasance ("covenant defeasance"), and the occurrence of an event described and
notice thereof in clauses (3) and (4) under "-- Events of Default and Notice
Thereof" (with respect to covenants subject to covenant defeasance) shall no
longer be an Event of Default, in each case, upon the irrevocable deposit with
the Trustee (or other qualifying trustee), in trust for such purpose, of money
and U.S. Government Obligations that, through the payment of principal and
interest in accordance with their terms, will provide money in an amount
sufficient to pay the principal of (and premium, if any) and interest, if any,
on such Debt Securities on the scheduled due dates therefor. Such a trust may
only be established if, among other things, (a) the Company has delivered to the
Trustee (i) in the case of defeasance, an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (B) since the date of the Indenture, there has been
a change in the applicable United States federal income tax law, in the case of
either (A) or (B) to the effect that the holders of such Securities will not
recognize gain or loss for United States federal income tax purposes as a result
of the deposit, defeasance and discharge to be effected with respect to such
Securities and will be subject to United States federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit, defeasance and discharge were not to occur or (ii) in the case of
covenant defeasance, an Opinion of Counsel to the effect that the Holders of
such Debt Securities will not recognize gain or loss for United States federal
income tax purposes as a result of such deposit and covenant defeasance and will
be subject to United States federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit and
covenant defeasance had not occurred, (b) no Event of Default or event which
with the giving of notice or lapse of time, or both, would become an Event of
Default under the applicable Indenture shall have occurred and be continuing on
the date of such deposit and (c) in the case of Subordinated Debt Securities,
(i) no default in the payment of principal of (or premium, if any) or interest,
if any, on any Senior Debt beyond any applicable grace period shall have
occurred and be continuing, or (ii) no other default with respect to any Senior
Debt shall have occurred and be continuing and shall have resulted in the
acceleration of such Senior Debt. The Company may exercise its defeasance option
with respect to such Debt Securities notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its defeasance option,
payment of such Debt Securities may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of
such Debt Securities may not be accelerated by reference to the covenants noted
under clause (2) above. If the Company omits to comply with its remaining
obligations with respect to such Debt Securities under the applicable Indenture
after exercising its covenant defeasance option, and if such Debt Securities are
declared due and payable because of the occurrence of any Event of Default, then
the amount of money and U.S. Government Obligations on deposit with the Trustee
may, in certain circumstances, be insufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from the Event of Default;
however, the Company will remain liable for making such payments. (Indentures,
Article Thirteen.)
CERTAIN COVENANTS
Maintenance of Office or Agency. The Company must maintain an office or
agency in each Place of Payment for each series of Debt Securities, both for
notice and demand purposes and for the purposes of presenting or surrendering
Debt Securities for payment or registration of transfer or exchange.
(Indentures, Section 1002.)
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Paying Agents, Etc. If the Company acts as its own Paying Agent with
respect to any series of Debt Securities, then, on or before each due date of
the principal of or interest on any Debt Securities of that series, it must
segregate and hold in trust for the benefit of the persons entitled thereto a
sum that is sufficient to pay the amount due and must notify the Trustee
promptly of its action or failure so to act. If the Company has one or more
Paying Agents for any series of Debt Securities, then, prior to each due date of
the principal of or interest on any Debt Securities of that series, it must
deposit with a Paying Agent a sum sufficient to pay such amount, and must
promptly notify the Trustee of its action or failure to so act (unless the
Paying Agent is the Trustee). All amounts that are paid by the Company to a
Paying Agent for the payment of principal of and interest on any Debt Securities
and that remain unclaimed for two years after such principal and interest has
become due and payable may be repaid to the Company, and thereafter the holder
of those Debt Securities may look only to the Company for payment thereof.
(Indentures, Section 1003.)
Restrictive Covenants. Any restrictive covenants applicable to any series
of Debt Securities will be described in an applicable Prospectus Supplement.
CONSOLIDATION, MERGER OR SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or sell
its property and assets as, or substantially as, an entirety to any Person and
may not permit any Person to merge into or consolidate with the Company unless
(i) either the Company will be the resulting or surviving entity or any
successor or purchaser is a corporation, partnership or trust organized under
the law of the United States of America, any State or the District of Columbia,
and any such successor or purchaser expressly assumes the Company's obligations
under the Debt Securities in a supplemental indenture, (ii) immediately after
giving effect to the transaction, no Event of Default shall have occurred and be
continuing, and (iii) certain other conditions are met. (Indentures, Section
801.)
CONVERSION RIGHTS
The terms on which Debt Securities of any series may be convertible or
exchangeable into Securities or other securities of the Company will be set
forth in the Prospectus Supplement relating to that series of Debt Securities
(however, any such other securities issuable upon conversion or exchange of Debt
Securities will be subject to registration under the Securities Act or an
applicable exemption therefrom). The terms will 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 requiring the number of
securities to be received by the holders of Debt Securities to be calculated
according to the market price of the securities to be received, as of a time
stated in the Prospectus Supplement. (Indentures, Section 301 and Article
Twelve.)
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, the
following provisions will apply to the Subordinated Debt Securities.
To the extent set forth in the Subordinated Indenture, the Subordinated
Debt Securities will be subordinated in right of payment to the prior payment in
full of all Senior Debt, including any Senior Debt Securities. (Subordinated
Indenture, Section 1501.) Upon any liquidation, dissolution, winding up,
reorganization, assignment for the benefit of creditors or marshaling of assets
or any bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceeding of the Company, the
holders of Senior Debt will first be entitled to receive payment in full of
principal of (and premium, if any) and interest, if any, on the Senior Debt
before the holders of Subordinated Debt Securities will be entitled to receive
or retain any payment in respect of the principal of (and premium, if any) or
interest, if any, on the Subordinated Debt Securities. (Subordinated Indenture,
Section 1502.)
Because of the subordination of the Subordinated Debt Securities, if the
Company is liquidated or insolvent, then Holders of Subordinated Debt Securities
may recover less, ratably, than holders of Senior Debt or other creditors of the
Company who are not subordinated to holders of Senior Debt.
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If the maturity of any Subordinated Debt Securities is accelerated, then
the holders of all Senior Debt outstanding at that time will first be entitled
to receive payment in full of all amounts due with respect to their Senior Debt
(including any amounts due upon acceleration) before the Holders of the
Subordinated Debt Securities will be entitled to receive any payment upon the
principal of (or premium, if any) or interest, if any, on the Subordinated Debt
Securities. (Subordinated Indenture, Section 1503.)
The Company is prohibited from making payments of principal (or premium, if
any) or interest, if any, in respect of the Subordinated Debt Securities if a
default in any payment with respect to Senior Debt, or an event of default with
respect to any Senior Debt resulting in the acceleration of the maturity
thereof, has occurred and continues, or if any judicial proceeding is then
pending with respect to any such default. (Subordinated Indenture, Section
1504.) For purposes of the subordination provisions, the payment, issuance and
delivery of cash, property or securities (other than stock and certain
subordinated securities of the Company) upon conversion of a Subordinated Debt
Security will be deemed to constitute payment on account of the principal of
such Subordinated Debt Security. (Subordinated Indenture, Section 1516.)
Therefore, these conversion payments, issuances or deliveries will be
subordinated to the same extent as payments of principal of the Subordinated
Debt Securities.
"Debt" means (without duplication and without regard to any portion of
principal amount that has not accrued and to any interest component thereof
(whether accrued or imputed) that is not due and payable), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (1) every obligation of such Person for money
borrowed; (2) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (3) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (4)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (5) every capital lease
obligation of such Person; (6) the maximum fixed redemption or repurchase price
of redeemable stock of such Person at the time of determination; and (7) every
obligation of the type referred to in clauses (1) through (6) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent that such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Subordinated Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Subordinated Debt
Securities or to other Debt which is pari passu with, or subordinated to, the
Subordinated Debt Securities; however, Senior Debt will not be deemed to include
(1) the Subordinated Debt Securities, (2) the Debt referred to in clause (6) of
the definition of Debt or (3) the 5% Notes.
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Debt, which may include indebtedness that is senior to the
Subordinated Debt Securities, but subordinate to other obligations of the
Company. The Senior Debt Securities, when issued, will constitute Senior Debt.
The indebtedness represented by the Notes, and all borrowings under revolving
credit and other credit facilities maintained by the Company or its
subsidiaries, will also constitute Senior Debt. At December 31, 1996, Senior
Debt outstanding aggregated approximately $86.0 million. See
"-- General -- Other Indebtedness."
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of Subordinated Debt Securities of a particular
series.
GLOBAL SECURITIES
Debt Securities of a series may be issued in the form of one or more Global
Securities that will be deposited with a depositary or its nominee. In such a
case, one or more Global Securities will be issued in a
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denomination or aggregate denominations equal to the portion of the aggregate
principal amount of Outstanding Debt Securities of the series to be represented
by such Global Security or Securities. Unless and until it is exchanged in whole
or in part for Debt Securities in definitive registered form, a Global Security
may not be registered for transfer or exchange except as a whole by the
depositary for such Global Security to the depositary's nominee and except in
the circumstances described in the applicable Prospectus Supplement.
(Indentures, Sections 204 and 305.)
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in an applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, if Debt
Securities are to be represented by a Global Security deposited with or on
behalf of a depositary, then the Global Security will be registered in the name
of the depositary or its nominee. Upon the issuance of the Global Security, and
the deposit of the Global Security with or on behalf of the depositary, the
depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by the Global
Security to the accounts of institutions that have accounts with the depositary
or its nominee ("Participants"). The accounts to be credited will be designated
by the underwriters or agents of the applicable Debt Securities or by the
Company, if the Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in the Global Securities will be limited to
Participants or Persons who hold interests through Participants. Ownership of
beneficial interests by Participants in the Global Security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the depositary or its nominee for the Global Security.
Ownership of beneficial interests in the Global Security by Persons who hold
through Participants will be shown on, and the transfer of that ownership
interest will be effected only through, records maintained by such Participants.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the depositary for a Global Security, or its nominee, is the
registered owner of the Global Security, the depositary or the nominee, as the
case may be, will be considered the sole owner or Holder of the Debt Securities
represented by the Global Security for all purposes under the applicable
Indenture. Unless otherwise specified in an applicable Prospectus Supplement,
owners of beneficial interests in Global Securities will not be entitled to have
Debt Securities of the series represented by that Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of that series in certificated form, and will not be considered
the owners or Holders of those Debt Securities for any purpose under the
applicable Indenture. Accordingly, each Person owning a beneficial interest in a
Global Security must rely on the procedures of the depositary and, if that
Person is not a Participant, on the procedures of the Participant through which
the Person owns its interest, to exercise any rights of a Holder under the
applicable Indenture. The Company understands that, under existing industry
practices, if the Company requests any action of Holders or an owner of a
beneficial interest in a Global Security desires to give any notice or take any
action that a Holder is entitled to give or take under the applicable Indenture,
then the depositary would authorize the Participants to give the notice or take
the action, and Participants would authorize beneficial owners owning through
the Participants to give the notice or take the action or would otherwise act
upon the instructions of beneficial owners owning through them.
Principal of, and any premium and interest on, a Global Security will be
payable in the manner described in an applicable Prospectus Supplement. Payment
of principal of, and any premium or interest on, Debt Securities registered in
the name of or held by a depositary or its nominee will be made to the
depositary or its nominee, as the case may be, as the registered owner or the
holder of the Global Security representing those Debt Securities. None of the
Company, the Trustee, any Paying Agent, or the Registrar for those Debt
Securities will be responsible or liable for any aspect of the records relating
to, or payments made on account of, beneficial ownership interests in a Global
Security for Debt Securities or for maintaining, supervising, or reviewing any
records relating to those beneficial ownership interests.
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THE TRUSTEE
Each Indenture contains certain limitations on the Trustee's right, if it
becomes a creditor of the Company within three months of, or subsequent to, a
default by the Company, to make payment in full of principal of, or interest on,
any series of Debt Securities when and as the principal and interest become due
and payable, to obtain payment of claims, or to realize for the Trustee's own
account on property received in respect of any claim as security or otherwise,
unless and until the default is cured. (Indentures, Section 613.)
The Trustee or its affiliates may act as depositary for funds of, make
loans to, perform other services for, or be a customer of, the Company in the
ordinary course of business.
GOVERNING LAW
The Indentures are governed by and will be construed in accordance with the
laws (except for principles of conflicts of laws) of the State of New York.
(Indentures, Section 112.)
DESCRIPTION OF CAPITAL STOCK AND DEPOSITARY SHARES
AUTHORIZED CAPITAL STOCK
Pursuant to the Company's Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the authorized capital stock of the Company
consists of 200,000,000 shares of Common Stock, par value $.10 per share (the
"Common Stock"), 8,000,000 shares of Class B Stock, par value $.10 per share
(the "Class B Stock"), none of which are outstanding, and 10,000,000 shares of
Preferred Stock, par value $.10 per share (the "Preferred Stock"), none of which
are outstanding.
As of March 31, 1997, there were 96,310,006 shares of Common Stock
outstanding, 19,729,808 shares of Common Stock reserved for issuance pursuant to
option and employee benefit plans and 9,517,242 shares of Common Stock reserved
for issuance upon the conversion of the 5% Notes.
PREFERRED STOCK
The following description sets forth certain general terms and provisions
of the Preferred Stock to which any Prospectus Supplement may relate. Certain
other terms, and the particular terms of a specific series of Preferred Stock,
will be described in the Prospectus Supplement relating to that series. If so
indicated in the applicable Prospectus Supplement, the terms of any specific
series may differ from the terms set forth below. The summary 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
their entirety by reference to the Certificate of Incorporation (as it may be
amended from time to time) and the certificate of designations relating to that
series of Preferred Stock (the "Certificate of Designations"), which will be
filed as an exhibit to or incorporated by reference in the Registration
Statement of which this Prospectus forms a part at or prior to the time of
issuance of that series of the Preferred Stock.
General. Under the Certificate of Incorporation, the Board of Directors of
the Company is authorized, without further stockholder action, to issue from
time to time up to 10,000,000 shares of Preferred Stock and to fix and determine
the voting powers, designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
of any series of Preferred Stock, including, without limitation, any voting
rights, any dividends payable and any right of the shares of that series to
convert into or be exchanged for other securities of the Company (provided,
however, that any securities issuable upon conversion or exchange of Preferred
Stock will be subject to registration under the Securities Act or an applicable
exemption therefrom). Thus, the Board of Directors of the Company, without
stockholder approval, could authorize the issuance of Preferred Stock with
voting, conversion and other rights that could adversely affect the voting power
(if any) and other rights of other series of the Preferred Stock or of the
Common Stock. As of the date of this Prospectus, the Company has no Preferred
Stock outstanding.
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The Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below, unless otherwise provided in the Prospectus
Supplement relating to a particular series of Preferred Stock. The applicable
Prospectus Supplement will describe: (1) the designation and the number of
shares offered; (2) the amount of liquidation preference per share; (3) the
price at which that Preferred Stock will be issued; (4) the dividend rate (or
method of calculation), if any, the dates on which dividends will be payable,
whether dividends will be cumulative or noncumulative and, if cumulative, the
dates from which dividends will begin to cumulate; (5) any redemption or sinking
fund provisions; (6) the terms of any rights to convert or exchange the
Preferred Stock into other securities of the Company; (7) whether the Company
has elected to offer Depositary Shares (as defined below); and (8) any
additional voting, dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions.
As indicated elsewhere herein (see "Description of Debt
Securities -- General"), because the Company is a holding company, its rights
and the rights of holders of its securities, including the holders of Preferred
Stock, to participate in the distribution of assets of any subsidiary of the
Company upon the subsidiary's liquidation or recapitalization will be subject to
the prior claims of the subsidiary's creditors and preferred stockholders,
except to the extent that the Company may itself be a creditor with recognized
claims against the subsidiary or a holder of preferred stock of the subsidiary.
The Preferred Stock will rank prior to the Common Stock and the Class B Stock
with respect to dividend rights and rights upon winding up and dissolution of
the Company.
The Preferred Stock will be issued in one or more series. The holders of
Preferred Stock will have no preemptive rights. Preferred Stock will be fully
paid and nonassessable when issued upon full payment of the purchase price
therefor. Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Preferred Stock, each series of Preferred Stock offered
hereby will rank on a parity as to dividends and liquidation rights in all
respects with each other series of Preferred Stock. The Prospectus Supplement
will contain, if applicable, a description of material United States federal
income tax consequences relating to the purchase and ownership of shares of the
series of Preferred Stock offered by the Prospectus Supplement.
Dividend Rights. Unless otherwise set forth in the applicable Prospectus
Supplement, holders of shares of each series of the Preferred Stock will 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 are set forth in the Prospectus Supplement relating to such
series of Preferred Stock. Different series of Preferred Stock may be entitled
to dividends at different rates or based upon different methods of
determination. The dividend rate may be fixed or variable or both. Each dividend
will be payable to the holders of record as they appear on the stock books of
the Company, on the record dates 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 noncumulative, as provided in the Prospectus
Supplement relating thereto.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of shares of
each series of Preferred Stock will be entitled to receive liquidating
distributions in the amount set forth in the Prospectus Supplement relating to
that series of Preferred Stock, out of assets of the Company available for
distribution to stockholders, before any distribution of assets is made to
holders of Common Stock or the Class B Stock or any other class of stock ranking
junior to that series of Preferred Stock upon liquidation.
Redemption. One or more series of the Preferred Stock may be redeemable, in
whole or in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms, at
the times and at the redemption prices set forth in the applicable Prospectus
Supplement.
Conversion and Exchange. The terms, if any, on which shares of any series
of Preferred Stock will be convertible into or exchangeable for other securities
of the Company will be set forth in the applicable Prospectus Supplement
(however, any securities issuable upon conversion or exchange of Preferred Stock
will be subject to registration under the Securities Act or an applicable
exemption therefrom). The conversion or exchange terms may include provisions
for conversion or exchange, either mandatory, at the option of the holder, or at
the option of the Company, in which case the number of other securities of the
Company to be
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received by the holders of that series of Preferred Stock would be calculated as
of a time and in the manner stated in the Prospectus Supplement.
Transfer Agent and Registrar. The transfer agent, registrar and dividend
disbursement agent for the Preferred Stock will be designated in the applicable
Prospectus Supplement. The registrar for shares of Preferred Stock will send to
stockholders notices of any meetings at which holders of the applicable series
of Preferred Stock will have the right to elect directors of the Company or to
vote on any other matter.
Voting Rights. The holders of Preferred Stock of a series offered hereby
will not have any voting rights, except as indicated in the applicable
Prospectus Supplement or as required by applicable law.
DEPOSITARY SHARES
General. The Company may, at its option, offer receipts for fractional
interests ("Depositary Shares") in Preferred Stock, rather than full shares of
Preferred Stock. In that event, receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent a fraction (which will be set forth in the
Prospectus Supplement relating to the applicable series of Preferred Stock) of a
share of a particular series of Preferred Stock, will be issued as described
below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and a depositary to be named by the Company in the
applicable Prospectus Supplement (the "Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by that Depositary Share, to all of the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption, subscription
and liquidation rights). The following summary of certain provisions of the
Deposit Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all of the provisions of the Deposit
Agreement, including the definitions therein of certain terms. Copies of the
forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to those exhibits.
Dividends and Other Distributions. The Depositary will distribute all cash
dividends or other cash distributions received in respect of the applicable
series of Preferred Stock to the record holders of Depositary Shares relating to
that series in proportion to the amount of those Depositary Shares owned by the
holders.
In the event of a distribution other than in cash, then the Depositary will
distribute property received by it to the record holders of Depositary Shares in
an equitable manner, unless the Company, after consulting with the Depositary,
determines that it is not feasible to make the distribution, in which case the
Depositary may sell the distributed property and distribute the net proceeds
from the sale to the holders.
Redemption of Depositary Shares. If a series of Preferred Stock represented
by Depositary Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Depositary resulting from any
redemption of any shares of that series of Preferred Stock held by the
Depositary. The redemption price per Depositary Share will equal the applicable
fraction of the redemption price per share payable with respect to that series
of Preferred Stock. Whenever the Company redeems shares of Preferred Stock held
by the Depositary, the Depositary will redeem, as of the same redemption date,
the number of Depositary Shares representing shares of Preferred Stock so
redeemed. If fewer than all of the Depositary Shares are to be redeemed, then
the Depositary Shares to be redeemed will be selected by lot, pro rata or by
another equitable method.
Withdrawal of Preferred Stock. Any holder of Depositary Shares may receive,
upon surrender of the corresponding Depositary Receipts to the Depositary, the
number of whole shares of the related series of Preferred Stock and any money or
other property represented by the surrendered Depositary Receipts. Holders of
Depositary Shares that surrender their Depositary Receipts will be entitled to
receive whole shares of Preferred Stock on the basis set forth in the related
Prospectus Supplement for the applicable series of Preferred Stock, but holders
of whole shares of that series of Preferred Stock will not be entitled to
subsequently deposit those shares of Preferred Stock under the Deposit Agreement
or to receive Depositary
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Receipts therefor. If the Depositary Shares surrendered by a holder in
connection with a withdrawal exceed the number of Depositary Shares that
represent the number of whole shares of Preferred Stock to be withdrawn, then
the Depositary will deliver to that holder at the same time a new Depositary
Receipt evidencing the excess number of Depositary Shares.
Voting the Preferred Stock. Upon receipt of a notice of any meeting at
which the holders of a series of Preferred Stock are entitled to vote, the
Depositary will mail the information contained in the notice to the record
holders of the Depositary Shares relating to that series of Preferred Stock.
Each record holder of the Depositary Shares on the record date (which will be
the same date as the record date for the Preferred Stock) will be entitled to
instruct the Depositary to exercise the voting rights pertaining to the shares
of Preferred Stock represented by that holder's Depositary Shares. The
Depositary will endeavor, insofar as practicable, to vote the amount of the
Preferred Stock represented by those Depositary Shares in accordance with the
holder's instructions, and the Company will take all reasonable action that the
Depositary may deem necessary in order to enable the Depositary to do so. The
Depositary will abstain from voting shares of the Preferred Stock to the extent
that it does not receive specific instructions from the holder of Depositary
Shares representing those shares of Preferred Stock.
Amendment and Termination of Deposit Agreement. The form of Depositary
Receipt evidencing the Depositary Shares and any provision of the Deposit
Agreement may at any time be amended by agreement between the Company and the
Depositary. However, any amendment that imposes any fees, taxes or other charges
payable by holders of Depositary Receipts (other than taxes and other
governmental charges, fees and other expenses payable by such holders as stated
under "-- Depositary Shares -- Charges of Depositary"), or that otherwise
prejudices any substantial existing right of holders of Depositary Receipts,
will not affect outstanding Depositary Receipts until 90 days after notice of
the amendment has been mailed to the record holders of outstanding Depositary
Receipts. Every holder of Depositary Receipts at the time the amendment becomes
effective will be deemed to consent and agree to the amendment and to be bound
by the Deposit Agreement, as so amended. No amendment may impair the right of
any owner of Depositary Shares to receive shares of the Preferred Stock and any
money or other property represented thereby, subject to the conditions specified
in the Deposit Agreement, upon surrender of the Depositary Receipts evidencing
such Depositary Shares, except in order to comply with mandatory provisions of
applicable law.
Whenever so directed by the Company, the Depositary will terminate the
Deposit Agreement by mailing notice of termination to the record holders of all
Depositary Receipts then outstanding at least 30 days before the termination
date stated in the notice. The Depositary may also terminate the Deposit
Agreement if 45 days have expired after the Depositary delivered to the Company
a written notice of its election to resign and a successor depositary has not
been appointed and accepted its appointment. If any Depositary Receipts remain
outstanding after the date of termination, the Depositary will discontinue the
transfer of Depositary Receipts, will suspend the distribution of dividends to
the holders of Depositary Receipts, and will not give any further notices (other
than notice of termination) or perform any further acts under the Deposit
Agreement, except that the Depositary will continue (1) to collect dividends and
any other distributions on the Preferred Stock and (2) to deliver the Preferred
Stock, together with the corresponding dividends and distributions and the net
proceeds of any sales of rights, preferences, privileges or other property,
without liability for interest thereon, in exchange for Depositary Receipts
surrendered. At any time after two years from the date of termination, the
Depositary may sell the Preferred Stock then held by it at public or private
sales, at such place or places and upon such terms as it deems proper, and may
hold the net proceeds of any sale, together with any money and other property
then held by it, without liability for interest thereon, for the pro rata
benefit of the holders of Depositary Receipts which have not been surrendered.
Resignation and Removal of Depositary. The Depositary may resign at any
time by delivering notice of its election to do so to the Company, and the
Company may at any time remove the Depositary. Any resignation or removal will
take effect upon the appointment of a successor Depositary and its acceptance of
such appointment. The successor Depositary must be appointed within 45 days
after delivery of the notice of resignation or removal and must be a bank or
trust company, or an affiliate of 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.
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Charges of Depositary. The Company will pay charges of the Depositary in
connection with the initial deposit of the Preferred Stock and issuance of
Depositary Receipts, all withdrawals of shares of Preferred Stock by owners of
Depositary Shares, any redemption of the deposited Preferred Stock and the
distribution of information to holders of the Depositary Receipts. Holders of
Depositary Receipts will pay other transfer and other taxes and governmental
charges and any other charges that are expressly provided in the Deposit
Agreement to be at their expense.
Miscellaneous. The Depositary will forward to the holders of Depositary
Receipts all reports and communications from the Company that are delivered to
the Depositary and that the Company is required or otherwise determines to
furnish to the holders of the corresponding series of Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Depositary under
the Deposit Agreement are limited to performing its duties thereunder without
negligence or bad faith. The obligations of the Company under the Deposit
Agreement are limited to performing its duties thereunder in good faith. Neither
the Company nor the Depositary will be required to prosecute or defend any legal
proceeding regarding any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Depositary may rely
upon the advice of counsel or accountants, or upon information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Receipts
or other persons believed to be competent and on documents believed to be
genuine.
COMMON STOCK; CLASS B STOCK
General. Holders of shares of Common Stock are entitled to one vote per
share, and holders of shares of Class B Stock have no voting rights except as
required by applicable law. Holders of shares of Common Stock do not have the
right to cumulate votes in the election of directors. A special meeting of
stockholders may be called by the Board of Directors of the Company and must be
called upon the written request of the holders of not less than 50% of the
Company's stock then outstanding and entitled to vote. Any action required or
permitted to be taken at any annual or special meeting of stockholders may be
taken without prior notice by written consent only if the consent is signed by
each stockholder entitled to vote on the matter.
Holders of Class B Stock may convert their shares into shares of Common
Stock at any time, unless the conversion would cause a holder, together with the
holder's affiliates, to own, control or vote more shares of the Company's stock
than permitted by applicable law. Stockholders of the Company do not have
preemptive rights to subscribe for shares of any class of the Company's capital
stock.
Dividends. Holders of shares of Common Stock and Class B Stock are entitled
to participate equally on a per-share basis in any dividends that the Board of
Directors of the Company may declare from time to time out of funds of the
Company legally available for the payment of dividends. However, the Company has
neither declared nor paid any cash dividends on its Common Stock or Class B
Stock since 1982. Certain of the Company's debt instruments (see "Description of
Debt Securities -- General -- Other Indebtedness") restrict, and the terms of
any series of Debt Securities or Preferred Stock issued pursuant to this
Prospectus may restrict, the Company's ability to pay dividends. Under the terms
of existing instruments, the Company may pay dividends to the extent that
cumulative dividends plus certain other payments since March 31, 1989, do not
exceed 50% of the Company's cumulative net income since March 31, 1989, plus the
proceeds of any offering of equity securities of the Company that are not
redeemable at the option of the holder of the securities. As of September 30,
1996, retained earnings available for dividends totaled approximately $178.0
million. The Company does not intend to pay any cash dividends on its Common
Stock or Class B Stock for the foreseeable future.
Transfer Agent and Registrar. The transfer agent and registrar for the
Common Stock is First Chicago Trust Company of New York.
The foregoing descriptions of the Preferred Stock and Common Stock are
summaries, and reference is herein made to the detailed provisions of the
Certificate of Incorporation (including, without limitation, the Certificate of
Designations relating to any series of Preferred Stock, filed hereafter and
incorporated by
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reference herein) and the Company's Amended and Restated By-Laws (the
"By-Laws"), copies of which are filed as exhibits to the Registration Statement.
CERTAIN CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS
Under Delaware law, a corporation may include provisions in its certificate
of incorporation which relieve its directors of monetary liability for breach of
their fiduciary duty, except under certain circumstances which include a breach
of a director's duty of loyalty, acts or omissions not in good faith or
involving intentional misconduct and a knowing violation of law, or any
transaction from which the director derived an improper personal benefit. The
Certificate of Incorporation provides that the Company's directors are not
liable to the Company or its stockholders for monetary damages for breach of
their fiduciary duties, subject to the exceptions specified by Delaware law.
Delaware law also provides that, when an officer, director, employee or
agent of a corporation is a party to, or its threatened to be made a party to,
any action, the corporation may indemnify such persons against expenses
(including attorneys' fees) and judgments, fines and amounts paid in settlement,
if that person acted in good faith and reasonably believed his or her actions
were in, or not opposed to, the best interests of the corporation, and were not
unlawful. Delaware law also provides that a person to be indemnified has the
right to be advanced any expenses incurred in his defense against any action
prior to the final disposition thereof and upon such terms as the board of
directors may determine. The Certificate of Incorporation provides these rights
to the Company's officers, directors, employees and agents. Certain directors
and officers of the Company are also parties to employment agreements which
provide for these and other indemnification rights in accordance with Delaware
law.
Under Delaware law, the power to adopt, amend and repeal by-laws is
conferred solely on the stockholders unless the corporation's certificate of
incorporation also confers this power upon its board of directors. Under the
Certificate of Incorporation the Board of Directors of the Company has been
granted this power. The Certificate of Incorporation and By-laws also provide
that the number of directors shall be fixed by resolution of the Board of
Directors of the Company from time to time, but shall not be less than five nor
more than eleven. As of the date of this Prospectus, the number of directors is
fixed at eight. These provisions, in addition to the staggered Board of
Directors discussed below and the existence of authorized but unissued capital
stock, may have the effect, either alone or in combination with each other, of
discouraging or making more difficult an acquisition of the Company deemed
undesirable by the Board of Directors of the Company.
The Certificate of Incorporation provides that the board of directors of
the Company is divided into three classes of directors. Each class of directors
serves a staggered three-year term. The classified board may make it more
difficult for any stockholder who is attempting to acquire the Company,
including a stockholder holding a majority of shares, to succeed. Such a
stockholder will be unable to force immediate changes in the composition of a
majority of the Board of Directors of the Company, since the terms of
approximately one-third of the incumbent directors would expire each year, and
at least two annual meetings would be required for stockholders to change a
majority of the Board of Directors.
DESCRIPTION OF WARRANTS
The Company may issue Warrants to purchase Debt Securities, Common Stock or
Preferred Stock (which may be represented by Depositary Shares). Warrants may be
issued independently or together with any other Securities and may be attached
to or separate from other Securities. Warrants will be issued under warrant
agreements (each, a "Warrant Agreement") to be entered into between the Company
and a warrant agent (the "Warrant Agent") specified in the applicable Prospectus
Supplement.
The following sets forth certain general terms and provisions of the
Warrants offered hereby. Copies of the forms of Warrant Agreements are filed as
exhibits to the Registration Statement of which this Prospectus is a part, and
the following summary is qualified in its entirety by reference to those
exhibits. Further terms of the Warrants and the applicable Warrant Agreement
will be set forth in the applicable Prospectus Supplement. If so indicated in
the applicable Prospectus Supplement, the terms of any Warrants may differ
-20-
<PAGE> 22
from the terms set forth below. The Warrants will be denominated in U.S. dollars
or in such foreign currency, currency unit or composite currency as may be
specified in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of any series
of Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following: (1) the title of the Warrants; (2) the
aggregate number of the Warrants; (3) the price or prices for which the Warrants
will be issued; (4) the currency, currency unit or composite currency in which
the price for the Warrants will be payable; (5) the designation, number and
terms of the Debt Securities, Common Stock or Preferred Stock purchasable upon
exercise of the Warrants, and procedures pursuant to which such numbers may be
adjusted; (6) the designation and terms of the Debt Securities, Common Stock or
Preferred Stock, if any, with which the Warrants are issued and the number of
Warrants issued with each such Security; (7) the date, if any, on and after
which the Warrants and the related underlying Security will be separately
transferable; (8) the exercise price or prices at which the Debt Securities,
Common Stock or Preferred Stock purchasable upon exercise of the Warrants may be
purchased, or provisions for determining the exercise price or prices,
procedures pursuant to which the exercise price or prices may be adjusted, and
(if not U.S. dollars) the foreign currency, currency unit or composite currency
in which the exercise price or prices are denominated; (9) the date on which the
right to exercise the Warrants will commence and the date on which that right
will expire; (10) whether the Warrants will be issued in bearer form; (11) the
minimum or maximum amount of Warrants that may be exercised at any one time;
(12) information with respect to book-entry procedures, if any; (13) a
discussion of certain United States federal income tax considerations; and (14)
any other terms of the Warrants, including terms, procedures and limitations
relating to the transferability, exchange and exercise of the Warrants.
Prior to the exercise of their Warrants, holders of Warrants will not have
any of the rights of holders of the Securities purchasable upon exercise, and
will not be entitled to (1) receive payments of principal of (or premium, if
any) or interest, if any, on any Debt Securities purchasable upon exercise, (2)
receive dividend payments, if any, with respect to any underlying Securities or
(3) exercise the voting rights of any Common Stock or Preferred Stock
purchasable upon exercise.
EXERCISE OF WARRANTS
Unless otherwise indicated in the applicable Prospectus Supplement relating
thereto, the Warrants will be issued in registered form. Each Warrant will
entitle its holder to purchase for cash the principal amount or number of
securities of the Company at the exercise price set forth in, or determinable
from, the applicable Prospectus Supplement relating to the Warrants offered
thereby. Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Warrants offered thereby at any time up to the close
of business on the expiration date set forth in the Prospectus Supplement. After
the close of business on the expiration date (or any later expiration date, as
extended by the Company), unexercised Warrants will become void.
Upon receipt of payment and of the certificate evidencing a Warrant (the
"Warrant Certificate"), properly completed and duly executed, at the corporate
trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Company will, as soon as practicable,
forward the Securities purchasable upon such exercise. If less than all of the
Warrants represented by a surrendered Warrant Certificate are exercised, a new
Warrant Certificate will be issued for the remaining Warrants.
MODIFICATIONS
The Warrant Agreements and the terms of the Warrants may be amended by the
Company and the Warrant Agent, without the consent of the holders of Warrants,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective or inconsistent provision contained therein, or in
any other manner which the Company may deem necessary or desirable and which
will not materially and adversely affect the interests of holders of outstanding
Warrants.
The Company and the Warrant Agent also may modify or amend certain other
terms of the Warrant Agreements and the Warrants with the consent of the holders
of not less than a majority in number of the
-21-
<PAGE> 23
then-outstanding unexercised Warrants affected. However, no such modification or
amendment may be made without the consent of the affected holders if the
amendment would (1) shorten the period of time during which the Warrants may be
exercised; (2) otherwise materially and adversely affect the exercise rights of
the holders of the Warrants; or (3) reduce the number of outstanding Warrants.
MERGER, CONSOLIDATION OR SALE OF ASSETS
If at any time there occurs a merger of, consolidation of, or sale of
substantially all of the assets of, the Company, as a result of which securities
underlying Warrants are converted into the right to receive stock, securities or
other property, then each outstanding Warrant will thereafter only be
exercisable for the kind and amount of stock, securities or other property
receivable upon the consummation of that transaction by a holder of the number
of securities underlying the Warrant.
ENFORCEABILITY OF RIGHTS BY HOLDERS
The Warrant Agent will act solely as an agent of the Company in connection
with the issuance and exercise of any Warrants. The Warrant Agent will have no
duty or responsibility in case of any default by the Company in the performance
of its obligations under the Warrant Agreements or the Warrant Certificates.
Each holder of Warrants may, without the consent of the Warrant Agent, enforce
by appropriate legal action, on its own behalf, its right to exercise its
Warrants.
SELLING STOCKHOLDERS
In addition to covering the offering of Securities by the Company, this
Prospectus covers the offering for resale of an unspecified number of shares of
Common Stock, not to exceed $350,000,000 in aggregate maximum offering price, by
Selling Stockholders who acquire their shares in connection with future
acquisitions by the Company. The applicable Prospectus Supplement will set
forth, with respect to each Selling Stockholder, (1) the name of the Selling
Stockholder, (2) the nature of any position, office or other materials
relationship which the Selling Stockholder will have had within the prior three
years with the Company or any of its predecessors or affiliates, (3) the number
of shares of Common Stock owned by the Selling Stockholder prior to the
offering, (4) the amount of Common Stock to be offered for the Selling
Stockholder's account and (5) the amount and (if one percent or more) the
percentage of the Common Stock to be owned by the Selling Stockholder after
completion of the offering.
PLAN OF DISTRIBUTION
DISTRIBUTION BY THE COMPANY
The Company may sell Securities to one or more underwriters for public
offering and sale by them, and also may sell Securities directly to investors or
to other purchasers or through dealers or agents. Any such underwriter, dealer
or agent involved in the offer and sale of the Securities will be named in the
applicable Prospectus Supplement.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Sales of Common Stock offered
hereby may be effected from time to time in one or more transactions on the
American Stock Exchange or in negotiated transactions or a combination of such
methods of sale.
In connection with distributions of Common Stock or otherwise, the Company
may enter into hedging transactions with broker-dealers in connection with which
such broker-dealers may sell Common Stock registered hereunder in the course of
hedging through short sales the positions they assume with the Company.
In connection with the sale of Securities, underwriters, dealers or agents
may receive compensation from the Company or from purchasers of Securities for
whom they may act as agents in the form of discounts,
-22-
<PAGE> 24
concessions or commissions. Underwriters may sell Securities to or through
dealers, and the dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers and agents
that participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the Company
(along with any profit on the resale of Securities by them) may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter, dealer or agent will be identified, and any such compensation
received from the Company will be described, in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus Supplement,
any agent will be acting on a best efforts basis and any dealer will purchase
Securities as a principal, and may then resell such Securities at varying prices
to be determined by the dealer.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against (and contribution toward)
certain civil liabilities, including liabilities under the Securities Act, and
to reimbursement by the Company for certain expenses.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents and underwriters or dealers to solicit offers by certain
purchasers to purchase offered 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. These contracts will be subject only to those conditions set forth in
the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of the offers.
Certain underwriters, dealers or agents and their associates may engage in
transactions with and perform services for the Company in the ordinary course of
business.
The Securities may or may not be listed on a national securities exchange
or a foreign securities exchange (other than the Common Stock, which is listed
on the American Stock Exchange). Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on the American Stock Exchange, subject to official
notice of issuance. Any underwriters to whom Securities are sold by the Company
for public offering and sale may make a market in those Securities, but the
underwriters will not be obligated to do so and may discontinue any market
making activities at any time without notice. No assurances can be given that
there will be an active trading market for the Securities.
DISTRIBUTION BY SELLING STOCKHOLDERS
Distribution of any shares to be offered by one or more of the Selling
Stockholders may be effected from time to time in one or more transactions
(which may involve block transactions) (1) on the American Stock Exchange, (2)
in the over-the-counter market, (3) in transactions otherwise than on the
American Stock Exchange or in the over-the-counter market or (4) in a
combination of any of these transactions. The transactions may be effected by
the Selling Stockholders at market prices prevailing at the time of sale, at
prices related to the prevailing market prices, at negotiated prices or at fixed
prices. The Selling Stockholders may from time to time offer their shares
through underwriters, brokers, dealers or agents, who may receive compensation
in the form of underwriting discounts, commissions or concessions from the
Selling Stockholders and/or the purchasers of the shares for whom they act as
agent. From time to time the Selling Stockholders may engage in short sales,
short sales against the box, puts and calls and other transactions in securities
of the Company, or derivatives thereof, and may sell and deliver their shares in
connection therewith. In addition, the Selling Stockholders may from time to
time sell their shares in transactions permitted by Rule 144 under the
Securities Act.
As of the date of this Prospectus, no underwriter, broker, dealer or agent
has been engaged by the Company in connection with the distribution of shares
pursuant to this Prospectus by the Selling Stockholders. To the extent required,
the number of shares to be sold, the purchase price, the name of any applicable
agent, broker, dealer or underwriter and any applicable commissions with respect
to a particular offer will be set forth in the applicable Prospectus Supplement.
The aggregate net proceeds to the Selling Stockholders
-23-
<PAGE> 25
from the sale of their shares offered hereby will be the sale price of those
shares, less any commissions, if any, and other expenses of issuance and
distribution not borne by the Company.
The Selling Stockholders and any brokers, dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of shares may
be deemed to be "underwriters" within the meaning of the Securities Act, in
which event any discounts, concessions and commissions received by such brokers,
dealers, agents or underwriters and any profit on the resale of the shares
purchased by them may be deemed to be underwriting discounts and commissions
under the Securities Act.
The applicable Prospectus Supplement will set forth the extent to which the
Company will have agreed to bear fees and expenses of the Selling Stockholders
in connection with the registration of the shares being offered hereby by them.
The Company may, if so indicated in the applicable Prospectus Supplement, agree
to indemnify Selling Stockholders against certain civil liabilities, including
liabilities under the Securities Act.
VALIDITY OF SECURITIES
The legal validity of the Securities offered pursuant to this Prospectus
will be passed upon for the Company by Baker & McKenzie, New York, New York, and
for any underwriters or agents by counsel to be named in the appropriate
Prospectus Supplement. Anthony G. Petrello, the President, Chief Operating
Officer and a director of the Company, was a partner of and is currently of
counsel to Baker & McKenzie.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the 1996 Form 10-K have been audited by Coopers & Lybrand L.L.P.,
independent accountants, as stated in their report, which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
-24-
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth the best estimate of the Company as to its
anticipated expenses and costs (other than underwriting discounts and
commissions) expected to be incurred in connection with the issuance and
distribution of the securities registered hereby (except for the Commission
registration fee, all amounts are estimates):
<TABLE>
<CAPTION>
<S> <C>
Commission registration fee................................. $ 82,575.76
American Stock Exchange listing fee......................... 17,500
Printing and engraving expenses............................. 90,000
Legal fees and expenses..................................... 175,00
Accounting fees and expenses................................ 70,000
Blue sky fees and expenses.................................. 10,000
Trustee's fees and expenses................................. 30,000
Miscellaneous............................................... 24,924.24
-----------
Total............................................. $500,000.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits the
indemnification of directors, employees and agents of Delaware corporations.
Consistent therewith, Article Seventh of the Certificate of Incorporation
states as follows:
(a) Each person who was or is made a party or is threatened to be made
a party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter collectively
referred to as a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director
or officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and administrators.
(b) The right to indemnification conferred in this Section shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition;
provided, however, that if the Delaware General Corporation Law requires,
the payment of such expenses incurred by a director or officer in advance
of the final disposition of a proceeding, shall be made only upon delivery
to the Corporation of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified
under this Section or otherwise. The Corporation may, by action of its
Board of Directors, provide information to employees and agents of the
Corporation with the same scope and effect as the foregoing indemnification
of directors and officers.
II-1
<PAGE> 27
(c) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in
this Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate
of Incorporation, By-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
(e) Any repeal or modification of this Section directly or indirectly,
such as by adoption of an inconsistent provision of this Certificate of
Incorporation, shall not apply to or have any effect on the rights of any
officer and director to indemnification and advancement of expenses with
respect to any acts or omissions occurring prior to such repeal or
modification.
(f) If this Section or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify each director and officer of the Corporation as to
expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) with respect to any proceeding to the full extent permitted by
any applicable portion of this Section that shall not have been invalidated
and to the full extent permitted by applicable law.
The Company has entered into agreements with each of its directors and
officers indemnifying each of them against expenses, settlements, judgments and
fines in connection with any threatened, pending or completed action, suit,
arbitration or proceeding where the individual's involvement is by reason of the
fact that he is or was a director or officer or served at the Company's request
as a director or officer of another organization, except that indemnification is
not provided against judgments or fines in a derivative suit unless permitted by
Delaware law.
The form(s) of proposed Underwriting Agreement(s) to be filed as (an)
exhibit(s) hereto or incorporated by reference herein may include provisions
relating to indemnification and contribution for the benefit of the underwriters
for any offering made hereby and may also contain provisions relating to the
indemnification of directors and officers of the Company against certain
liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
**1.1 -- Form of Underwriting Agreement.
**4.1 -- Form of Certificate of Designations of Preferred Stock.
*4.2 -- Form of Senior Debt Securities Indenture.
*4.3 -- Form of Subordinated Debt Securities Indenture.
*4.4 -- Form of Stock Warrant Agreement, together with form of
Warrant.
*4.5 -- Form of Debt Warrant Agreement, together with form of
Warrant.
*4.6 -- Form of Warrant Agreement for warrants not attached to
debt or equity securities.
**4.7 -- Form of Senior Debt Securities.
**4.8 -- Form of Subordinated Debt Securities.
*4.9 -- Form of Deposit Agreement, together with form of
Depositary Receipt.
**5.1 -- Opinion of Baker & McKenzie.
*12.1 -- Statement regarding computation of ratios.
</TABLE>
II-2
<PAGE> 28
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.1 -- Consent of Baker & McKenzie (included in Exhibit 5.1).
*23.2 -- Consent of Coopers & Lybrand L.L.P.
*24.1 -- Powers of Attorney (included on signature page).
**25.1 -- Statement of eligibility of trustee under the Senior Debt
Securities on Form T-1.
**25.2 -- Statement of eligibility of trustee under the
Subordinated Debt Securities on Form T-1.
</TABLE>
- ---------------
* Previously filed.
** To be filed by amendment or to be incorporated by reference in connection
with the offering of Securities.
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceedings) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed
to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of
prospectus shall be determined to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(d) The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act;
II-3
<PAGE> 29
(ii) to reflect in the Prospectus any facts of events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set
II-4
<PAGE> 30
forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
charges in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
Provided, however, that paragraphs (1) (i) and (1) (ii) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to section 13 or section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Trust Indenture Act.
II-5
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 29th day of April, 1997.
NABORS INDUSTRIES, INC.
By: /s/ ANTHONY G. PETRELLO
----------------------------------
Anthony G. Petrello,
President and Chief Operating
Officer
In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 1 has been signed by the following persons in the capacities and
on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ EUGENE M. ISENBERG* Chairman, Chief Executive April 29, 1997
- ----------------------------------------------------- Officer and Director
Eugene M. Isenberg (principal executive officer)
/s/ ANTHONY G. PETRELLO President, Chief Operating April 29, 1997
- ----------------------------------------------------- Officer and Director
Anthony G. Petrello
/s/ RICHARD A. STRATTON* Vice Chairman and Director April 29, 1997
- -----------------------------------------------------
Richard A. Stratton
/s/ BRUCE P. KOCH* Vice President of Finance April 29, 1997
- ----------------------------------------------------- (principal financial and
Bruce P. Koch accounting officer)
/s/ GARY T. HURFORD* Director April 29, 1997
- -----------------------------------------------------
Gary T. Hurford
/s/ HANS W. SCHMIDT* Director April 29, 1997
- -----------------------------------------------------
Hans W. Schmidt
/s/ MYRON M. SHEINFELD* Director April 29, 1997
- -----------------------------------------------------
Myron M. Sheinfeld
/s/ JACK WEXLER* Director April 29, 1997
- -----------------------------------------------------
Jack Wexler
/s/ MARTIN J. WHITMAN* Director April 29, 1997
- -----------------------------------------------------
Martin J. Whitman
*By: /s/ ANTHONY G. PETRELLO
-------------------------------------------------
Anthony G. Petrello
Attorney-in-Fact
</TABLE>
<PAGE> 32
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
**1.1 -- Form of Underwriting Agreement.
**4.1 -- Form of Certificate of Designations of Preferred
Stock.
*4.2 -- Form of Senior Debt Securities Indenture.
*4.3 -- Form of Subordinated Debt Securities Indenture.
*4.4 -- Form of Stock Warrant Agreement, together with form
of Warrant.
*4.5 -- Form of Debt Warrant Agreement, together with form
of Warrant.
*4.6 -- Form of Warrant Agreement for warrants not attached
to debt or equity securities.
**4.7 -- Form of Senior Debt Securities.
**4.8 -- Form of Subordinated Debt Securities.
*4.9 -- Form of Deposit Agreement, together with form of
Depositary Receipt.
**5.1 -- Opinion of Baker & McKenzie.
*12.1 -- Statement regarding computation of ratios.
23.1 -- Consent of Baker & McKenzie (included in
Exhibit 5.1).
*23.2 -- Consent of Coopers & Lybrand L.L.P.
*24.1 -- Powers of Attorney (included on signature page).
**25.1 -- Statement of eligibility of trustee under the
Senior Debt Securities on Form T-1.
**25.2 -- Statement of eligibility of trustee under the
Subordinated Debt Securities on Form T-1.
</TABLE>
- ---------------
* Previously filed.
** To be filed by amendment or to be incorporated by reference in connection
with the offering of Securities.
