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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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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DELAWARE 515 WEST GREENS ROAD, SUITE 1200 93-0711613
(State or Other Jurisdiction of HOUSTON, TEXAS 77067 (I.R.S. Employer
Incorporation or organization) (281) 874-0035 Identification No.)
(Address, Including Zip Code, and
Telephone
Number, Including Area Code, of
Registrant's
Principal Executive Offices)
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ANTHONY G. PETRELLO With a copy to:
PRESIDENT AND CHIEF OPERATING OFFICER
NABORS INDUSTRIES, INC. ROBERT W. ERICSON, ESQ.
515 WEST GREENS ROAD, SUITE 1200 ALAN J. RICE, ESQ.
HOUSTON, TEXAS 77067 WINSTON & STRAWN
(Name, Address, Including Zip Code, and Telephone 200 PARK AVENUE
Number, Including Area Code, of Agent for Service) NEW YORK, NEW YORK 10166
(212) 294-6700
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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. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
TITLE OF SHARES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE FEE(3)
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Debt Securities...........................
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Preferred Stock, par value $.10 per
share...................................
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Common Stock, par value $.10 per share....
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Depositary Shares(4)......................
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Warrants(5)...............................
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Total............................. $500,000,000(6) $500,000,000 $139,625.76(7)
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(1) The amount of securities to be registered consists of $500,000,000 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. An additional $350,000,000 of securities was
previously registered on a Registration Statement on Form S-3 (No.
333-25233). Pursuant to Rule 429 under the Securities Act of 1933, as
amended (the "Securities Act"), this amount includes $25,000,000 of
securities being carried forward from earlier registration statements on
Form S-3 (No. 333-25233) 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 $500,000,000. The
Prospectus herein covers $500,000,000 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 shares of Common Stock that may be sold by or for the account of
selling stockholders.
(7) Pursuant to Rule 429 under the Securities Act, the amount of $25,000,000 of
securities covered by an earlier Registration Statement on Form S-3 (No.
333-25233) is being carried forward and the corresponding registration fee
of $7,575.76 was previously paid at that time. Accordingly, $132,050 is paid
herewith.
The Prospectus contained in the Registration Statement relates to the
Registration Statement on Form S-3 (No. 333-25233) 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.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED JUNE 18, 1999
PROSPECTUS
[INSERT LOGO]
$
NABORS INDUSTRIES, INC.
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK,
DEPOSITARY SHARES, AND WARRANTS
This Prospectus relates to Nabors Industries, Inc.'s:
- debentures, notes and other debt securities in one or more series which
may be either senior debt securities or subordinated debt securities;
- shares of Nabors' preferred stock, $.10 par value per share issuable in a
series to be designated by its board of directors (which may be issued in
the form of depositary shares evidenced by depositary receipts);
- shares of its common stock, $.10 par value per share; and
- warrants to purchase debt securities, preferred stock or common stock of
Nabors.
Specific terms of the particular securities being offered will be disclosed
in an accompanying Prospectus Supplement.
In addition, shares of common stock may be offered from time to time by
stockholders of Nabors. 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. Nabors will not receive proceeds of any sale of
shares by the Selling Stockholders.
The aggregate initial offering price of all of the securities which may be
sold pursuant to this prospectus will not exceed U.S. $500,000,000, or its
equivalent based on the applicable exchange rate at the time of issue in one or
more foreign currencies or currency units as shall be designated by Nabors.
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 June 17,
1999, the closing price of a share of common stock on that exchange was $24.3125
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 Nabors. The subordinated debt
securities, when issued, will be subordinated in right of payment to all senior
debt of Nabors.
A Prospectus Supplement may contain information concerning certain United
States federal income tax considerations applicable to the securities offered.
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YOU SHOULD CAREFULLY REVIEW "RISK FACTORS" BEGINNING ON PAGE 3 FOR A
DISCUSSION OF THINGS YOU SHOULD CONSIDER WHEN INVESTING IN SECURITIES OF NABORS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is , 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT OFFER OR SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS PROHIBITED.
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TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS.................................. i
WHERE YOU CAN FIND MORE INFORMATION......................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 2
NABORS...................................................... 2
RISK FACTORS................................................ 3
USE OF PROCEEDS............................................. 8
RATIO OF EARNINGS TO FIXED CHARGES.......................... 8
DESCRIPTION OF DEBT SECURITIES.............................. 8
DESCRIPTION OF CAPITAL STOCK AND DEPOSITARY SHARES.......... 19
DESCRIPTION OF WARRANTS..................................... 25
SELLING STOCKHOLDERS........................................ 27
PLAN OF DISTRIBUTION........................................ 27
VALIDITY OF SECURITIES...................................... 29
EXPERTS..................................................... 29
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FORWARD-LOOKING STATEMENTS
The statements in this document and the documents incorporated by reference
that relate to matters that are not historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. When used in this document
and the documents incorporated by reference, words such as "anticipate,"
"believe," "expect," "plan," "intend," "estimate," "project," "will," "could,"
"may," "predict," and similar expressions are intended to identify
forward-looking statements. Future events and actual results may differ
materially from the results set forth in or implied in the forward-looking
statements. Factors that might cause such a difference include:
- fluctuations in worldwide prices and demand for oil and gas;
- fluctuations in levels of oil and gas exploration and development
activities;
- fluctuations in the demand for contract drilling services;
- the existence of competitors, technological changes and developments in
the industry;
- the existence of operating risks inherent in the contract drilling
industry;
- the existence of regulatory uncertainties, the possibility of political
instability in any of the countries in which Nabors does business; and
- year 2000 issues and general economic conditions, in addition to the
other matters discussed under "Risk Factors."
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the Securities and Exchange Commission's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the Securities and Exchange Commission at (800) SEC-0330 for further
information on the public reference rooms. Our Securities and Exchange
Commission filings are also available to the public at the Securities and
Exchange Commission's web site at http://www.sec.gov. In addition, documents
filed by Nabors 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 Securities and Exchange Commission allows us to "incorporate by
reference" into this prospectus the information we file with it, which means
that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of
this prospectus, and later information that we file with the Securities and
Exchange Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the Securities and Exchange Commission under section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until our offering is completed:
(1) Nabors' Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (the "1998 Form 10-K");
(2) Nabors' Current Report on Form 8-K filed with the Securities and
Exchange Commission on April 22, 1999;
(3) Nabors' Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1999; 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 Securities and Exchange Commission on May
20, 1992, and any subsequent amendment thereto filed for the purposes of
updating such description.
Nabors 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.
NABORS
Nabors is the largest land drilling contractor in the world, with over 470
actively marketed land rigs as of May 31, 1999. We conduct oil and gas land
drilling operations in the lower 48 states of the United States, Alaska and
Canada, and internationally, primarily in South America and the Middle East.
Offshore, we market 25 platform, six jack-up and two barge drilling rigs in the
Gulf of Mexico and several international markets. To supplement our primary
businesses, we offer a number of ancillary well-site services, including oil
field management, engineering, transportation, construction, maintenance, well
logging and other support services, in selected domestic and international
markets. In addition, we manufacture and lease or sell top drives for a broad
range of drilling rig applications and we also manufacture and lease or sell rig
instrumentation equipment and software to monitor rig performance. Our customers
include major oil and gas companies, foreign national oil and gas companies and
independent oil and gas companies. We conduct our operations primarily through
subsidiaries and joint ventures.
Nabors was incorporated in Delaware on May 3, 1978. Our principal executive
offices are located at 515 West Greens Road, Suite 1200, Houston, Texas 77067.
Our phone number is (281) 874-0035.
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RISK FACTORS
You should carefully consider the following risk factors and all of the
other information set forth or incorporated by reference in this Prospectus and
any applicable Prospectus Supplement before you purchase any of Nabors'
securities. This Prospectus, any applicable Prospectus Supplement and the
documents incorporated by reference contain forward-looking statements which
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including those set forth in the following risk factors and elsewhere
in this Prospectus, any applicable Prospectus Supplement and the documents
incorporated by reference into this document. See "Forward-Looking Statements."
RISKS RELATED TO NABORS' BUSINESS GENERALLY
Decreased oil and gas prices Nabors' operations are materially dependent
could adversely affect drilling upon the level of activity in oil and gas
activity and Nabors' revenues, exploration and production. Both short-term
cash flows and profitability. and long-term trends in oil and gas prices
affect the level of such activity. Oil and
gas prices and, therefore, the level of
drilling, exploration and production
activity, can be volatile. Worldwide
military, political and economic events,
including initiatives by the Organization
of Petroleum Exporting Countries, affect
both the demand for, and the supply of, oil
and gas. Fluctuations during the last year
in the demand and supply of oil and gas
have contributed to, and are likely to
continue to contribute to, price
volatility. Nabors believes that any
prolonged reduction in oil and gas prices
would depress the level of exploration and
production activity. This would likely
result in a corresponding decline in the
demand for Nabors' services and could have
a material adverse effect on Nabors'
revenues, cash flows and profitability.
There can be no assurances as to the future
level of demand for Nabors' services or
future conditions in the drilling industry.
Beginning in early 1998, domestic land
drillers, including Nabors, experienced a
significant downturn in demand for their
drilling rigs. The downturn has since
impacted offshore and international
drilling activity. Nabors believes the
downturn is attributable in large part to
sharp drops in oil prices that began in
late 1997 and have continued through 1998
and into 1999. The decline in crude oil
prices negatively impacted the revenues of
oil companies, who have responded by
reducing exploration and development
activity. Decreased demand has adversely
affected Nabors by lowering utilization of
Nabors' rigs and reducing the day rates
Nabors can charge for its rigs. Although
oil and gas prices have improved recently,
drilling activity continues to lag behind.
There can be no assurance as to when rig
use will increase.
Nabors operates in a highly The drilling and workover industry in which
competitive industry with Nabors operates is very competitive.
excess drilling capacity, which Contract drilling companies compete
may adversely affect Nabors' primarily on a regional basis, and
results of operations. competition may vary significantly from
region to region at any particular time.
Many drilling rigs can be readily moved
from one region to another in response to
changes in levels of activity, which may
result in an oversupply of rigs in such
area. In many markets in which Nabors
operates, the number of rigs available for
use exceeds the demand for
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rigs, resulting in price competition. Most
drilling and workover contracts are awarded
on the basis of competitive bids, which
also results in intense price competition.
The land drilling market generally is more
competitive than the offshore drilling
market because there are a larger number of
rigs and competitors.
In all of the markets in which Nabors
operates, price and the availability and
condition of equipment are the most
significant factors in determining which
drilling contractor is awarded a job. Other
factors include the availability of trained
personnel possessing the required
specialized skills, the overall quality of
service and safety record and the ability
to offer ancillary services. In
international markets, experience in
operating in certain environments and
customer alliances have also been factors
in the selection of Nabors.
Certain competitors are present in more
than one of Nabors' regions, although no
one competitor operates in all of these
areas. In the lower 48 states of the United
States, the next largest competitors have
over 100 rigs, based on industry reports,
and several hundred competitors have
smaller national, regional or local rig
operations. In the Alaska market, Nabors
has approximately five major competitors.
In Canada and offshore, Nabors competes
with several companies of varying size,
many of which have more significant
operations in those areas than Nabors.
Internationally, Nabors competes directly
with various competitors at each location
where it operates. Nabors believes that the
market for land drilling contracts will
continue to be competitive for the
foreseeable future. Although Nabors
believes it has a strong competitive
position in the domestic land market,
certain of its competitors internationally
and offshore may be better positioned in
these markets and have newer and more
desirable equipment, allowing them to
compete more effectively.
The nature of Nabors' operations Nabors' operations are subject to many
present inherent risks of loss hazards inherent in the drilling, workover
that, if not insured or and well servicing industries, including
indemnified against, could blowouts, cratering, explosions, fires,
adversely affect its results loss of well control, loss of hole, damaged
of operations. or lost drilling equipment and damage or
loss from inclement weather, any of which
could result in personal injury or death,
damage to or destruction of equipment and
facilities, suspension of operations,
environmental damage and damage to the
property of others. Nabors' offshore
operations are also subject to the hazards
of marine operations including capsizing,
grounding, collision, damage from heavy
weather or sea conditions and unsound
bottom conditions. In addition, Nabors'
international operations are subject to
risks of war, civil disturbances or other
political events. Generally, drilling
contracts provide for the division of
responsibilities between a drilling company
and its customer, and Nabors seeks to
obtain indemnification from its
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customers by contract for certain of these
risks. To the extent that Nabors is unable
to transfer such risks to customers by
contract or indemnification agreements,
Nabors seeks protection through insurance
which its management considers to be
adequate. However, there is no assurance
that such insurance or indemnification
agreements will adequately protect Nabors
against liability from all of the
consequences of the hazards described
above. The occurrence of an event not fully
insured or indemnified against, or the
failure of a customer to meet its
indemnification obligations, could result
in substantial losses to Nabors. In
addition, there can be no assurance that
insurance will be available to cover any or
all of these risks, or, even if available,
that it will be adequate or that insurance
premiums or other costs will not rise
significantly in the future, so as to make
such insurance prohibitive.
The profitability of Nabors' Nabors' business is subject to additional
international operations risks of loss associated with conducting
could be adversely affected by business abroad. Nabors derives a
war, civil disturbance or significant portion of its business from
economic turmoil. international markets, including major
operations in Canada, the Middle East, the
Commonwealth of Independent States and
South and Central America. These operations
are subject to various risks, including the
risk of war, civil disturbances and
governmental 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, Nabors' operations may be
subject to the additional risk of
fluctuating currency values and exchange
controls. In the international markets in
which Nabors operates, it is subject to
various laws and regulations that govern
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.
Exposure to environmental The drilling of oil and gas wells is
liabilities could subject to various federal, state, local
adversely affect Nabors' and foreign laws, rules and regulations.
results of operations. The cost to Nabors of compliance with these
laws and regulations may be substantial.
For example, federal law imposes specific
design and operational standards on rigs
and platforms. Failure to comply with these
requirements could subject Nabors to
substantial civil and criminal penalties as
well as potential court injunctions. In
addition, federal law imposes a variety of
regulations on "responsible parties"
related to the prevention of oil spills and
liability for damages from such spills.
Nabors, as an owner and operator of onshore
and offshore rigs, may be deemed to be a
responsible party under federal law.
Federal law assigns liability to a
responsible party of oil removal costs and
subjects a responsible party to a variety
of public and private damages. In some
circumstances, federal law imposes
liability without regard to negligence or
fault, resulting in substantial costs to
the party upon whom such liability is
imposed. Nabors generally tries to require
its
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customers to contractually assume
responsibility for compliance with
environmental regulations. However, Nabors
is not always successful in shifting all of
these risks.
RISKS RELATED TO NABORS' OPERATIONS
Nabors could be adversely
affected if it loses
the services of Mr. Isenberg, Mr.
Petrello or
Mr. Stratton. Nabors' 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 Nabors. The loss of the
services of Mr. Isenberg, Mr. Petrello
and/or Mr. Stratton could have a material
adverse affect upon Nabors.
Nabors, as a holding company,
depends on
its subsidiaries to meet its
financial
obligations. We are a holding company with no
significant assets other than the stock of
our subsidiaries. In order to meet our
financial needs, we will rely exclusively
on repayments of interest and principal on
intercompany loans made by us to our
operating subsidiaries and income from
dividends and other cash flow from such
subsidiaries. We cannot assure you that our
operating subsidiaries will generate
sufficient net income to pay upstream
dividends or cash flow to make payments of
interest and principal to us in respect of
our intercompany loans.
Existing dividend policies and
contractual
restrictions limit our ability to
pay dividends. As part of our policy, Nabors has not paid
any dividends on any common stock since
1982. We do not anticipate that we will pay
any dividends on the common stock in the
foreseeable future. Certain of our debt
instruments include covenants restricting
Nabors' ability to pay dividends or to make
certain other distributions to
stockholders. In connection with the
offering of any dividend-paying Preferred
Stock, the applicable Prospectus Supplement
will set forth the amount available for
distribution as of the end of the most
recent fiscal period under our debt
instruments.
As Nabors and its shareholders
have a
considerable number of shares of
common
stock available for issuance and
resale,
significant issuances or resales
in the future
may adversely affect the market
price of the
common stock. As of May 31, 1999, there were 107,010,097
shares of common stock outstanding,
19,543,434 shares of common stock were
reserved for issuance pursuant to option
and employee benefit plans, and 9,517,132
shares of common stock were reserved for
issuance upon the conversion of certain of
our debt securities. In addition, we have
reserved 333,998 shares of common stock for
issuance upon the exercise of outstanding
warrants and 19,750,000 shares of common
stock for issuance upon the consummation of
our pending acquisition of Pool Energy
Services Co. For more information
concerning this pending acquisition, please
see our Form 10-Q for the period ended
March 31, 1999 under "Management's
Discussion and Analysis of Financial
Condition and Results of Operations --
Liquidity and Capital Resources." 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 Nabors 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 we may
issue additional
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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 our ability
to raise additional capital through the
sale of equity securities.
Provisions of our organizational Nabors' board of directors is divided into
documents may deter a change of three classes of directors, with each class
control transaction and decrease serving a staggered three-year term. In
the likelihood of a shareholder addition, our board of directors has the
receiving a change of control authority to issue up to 10,000,000 shares
premium. 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 we have 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 Nabors that are not approved by
the board of directors, thereby possibly
preventing certain Nabors' stockholders
from realizing a possible premium on their
shares.
The absence of a public market All Debt Securities, Preferred Stock,
for certain of the securities Depositary Shares and Warrants sold or
described herein could limit offered under this Prospectus will be new
a purchaser's ability to issues of securities of Nabors with no
resell them. established trading market. Any
underwriters to whom Nabors sells Debt
Securities, Preferred Stock, Depositary
Shares or Warrants 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.
Consequently, no assurance can be given as
to the liquidity of any secondary market
for Debt Securities, Preferred Stock,
Depositary Shares or Warrants.
Year 2000 issues present risks to The year 2000 issue refers to the potential
our business operations in inability of computer systems and
several ways. technologies to properly recognize and
process dates beyond December 31, 1999. In
such case our computer systems and those of
our customers and suppliers may not work
properly and adversely affect our business.
For more information on these issues and
our plans to respond to these risks, please
see our Form 10-Q for the quarter ended
March 31, 1999 under "Management's
Discussion and Analysis of Financial
Condition and Results of Operations
-- Other Matters -- Year 2000 Issue and
Compliance Program" which we specifically
incorporate into this Prospectus by
reference.
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<PAGE> 10
USE OF PROCEEDS
Except as may be set forth in a Prospectus Supplement, Nabors will use the
net proceeds from any sale of the securities described in this Prospectus for
future business acquisitions and other general corporate purposes, such as
working capital, investment in subsidiaries, the retirement of existing debt (if
economically prudent) and/or the repurchase of shares of common stock or other
securities. The exact amounts to be used and when the net proceeds will be
applied to corporate purposes will depend on a number of factors, including our
funding requirements and the availability of alternative funding sources. Nabors
routinely reviews acquisition opportunities. A Prospectus Supplement will
disclose any future proposal to use net proceeds from an offering of our
securities to finance any specific acquisition, if applicable.
Nabors will not receive any proceeds from any sale of shares of Common
Stock by the Selling Shareholders.
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 Nabors' consolidated financial statements (including the notes
thereto) set forth or incorporated by reference in Nabors' 1998 Form 10-K for
the fiscal year ended December 31, 1998 and Nabors' quarterly report on Form
10-Q for the fiscal quarter ended March 31, 1999.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR THREE MONTHS FISCAL YEARS ENDED SEPTEMBER 30,
ENDED ENDED ENDED ---------------------------------
MARCH 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 1997 1996 1995 1994
- -------------- ----------------- ----------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
4.52 11.56 15.15 10.97 7.09 7.67 1.65
</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 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.
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<PAGE> 11
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 a Prospectus Supplement relating to
such Debt Securities.
The Senior Debt Securities are to be issued under a separate indenture (as
supplemented or otherwise modified, from time to time, the "Senior Indenture"),
to be entered into between Nabors and a trustee named in the applicable
Prospectus Supplement. The Subordinated Debt Securities are to be issued under a
separate indenture (as supplemented or otherwise modified, from time to time the
"Subordinated Indenture"), to be entered into between Nabors 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
incorporated 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 an applicable Prospectus Supplement, the Senior
Debt Securities, when issued, will be unsecured and unsubordinated obligations
of Nabors 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 of our Senior Debt (as defined below), as described under
"-- Subordination of Subordinated Debt Securities" and in a 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 an
applicable Prospectus Supplement.
A 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 (Indentures, Section 3.01):
(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
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<PAGE> 12
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 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 Nabors;
(9) if applicable, any obligation of Nabors 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 Nabors (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 of 1933, as amended (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 Nabors, 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;
10
<PAGE> 13
(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.
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 Nabors 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 Securities, but Nabors 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 Nabors is a holding company, the rights of Nabors, and the rights of
creditors of Nabors (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 Nabors may be
recognized as a creditor of the subsidiary. Generally, the Debt Securities will
be effectively subordinated to all existing and future indebtedness of Nabors'
operating subsidiaries.
Unless otherwise specified in an applicable Prospectus Supplement, the
Indentures will not contain any provisions that limit the ability of Nabors 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 Nabors or any subsidiary.
Other Indebtedness. Certain of Nabors' existing debt instruments impose,
and future debt instruments may impose, certain restrictions on Nabors,
including restrictions on the payment of dividends and certain business
combinations, and require Nabors to maintain certain financial ratios.
The 6.80% Notes. On March 9, 1999, Nabors issued $325,000,000 of 6.80%
notes due 2004. Interest on the 6.80% notes is payable semi-annually on April 15
and October 15, commencing on October 15, 1999. The 6.80% notes are redeemable
in whole or in part, at the option of Nabors at any time, at a redemption price
equal to the greater of (1) 100% of their principal amount or (2) the sum of the
present values of the remaining scheduled payments of principal and interest
discounted to the date of redemption on a semi-annual basis using the comparable
treasury security yield plus 25 basis points together in either case with
accrued and unpaid interest. Certain restrictions have been imposed on Nabors as
a result of the issuance of the 6.80% notes, including limitations on the
incurrence of liens and certain sale-leaseback transactions.
A portion of the proceeds from the issuance of the 6.80% notes were used to
repay certain short-term and long-term borrowings of Nabors and to purchase rigs
and related equipment from Bayard Drilling
11
<PAGE> 14
Technologies, Inc., a wholly owned subsidiary of Nabors. The proceeds from the
equipment sale were subsequently used by Bayard to repay certain Bayard senior
debt.
The 5% Notes. On May 28, 1996, Nabors issued $172.5 million of 5%
Convertible Subordinated Notes with a scheduled maturity on May 15, 2006.
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 Nabors 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 Nabors, 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 applicable subordinated indenture.
The 9.18% Notes. Nabors issued 9.18% Senior Secured Notes due July 31,
2006 in the principal amount of $40.0 million to the John Hancock Mutual Life
Insurance Company and John Hancock Variable Life Insurance Company, pursuant to
note purchase agreements dated October 1, 1992. The 9.18% notes are due in
semi-annual installments of $4.0 million commencing January 2002 and impose
certain restrictions on Nabors, including restrictions on the payments of
dividends and certain business combinations. Nabors may pay dividends to the
extent that Nabors' cumulative dividends, plus certain other payments since
March 31, 1989, do not exceed 50% of Nabors' cumulative net income since March
31, 1989, plus the proceeds of any offering of equity securities of Nabors that
are not redeemable at the option of the holder of the securities. As of March
31, 1999, retained earnings available for dividends totaled approximately $326.0
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 Nabors during a two-year period. The 9.18% notes also require that
certain financial tests be met by Nabors 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 guaranteed by Nabors and are collateralized by net assets
with an aggregate book value of approximately $27.0 million as of December 31,
1998 and 1997. Interest on the 9.18% notes is payable semi-annually on July 31
and January 31 of each year.
Nabors currently has credit facility arrangements with various banks with
total availability of $253.3 million. As of May 31, 1999, remaining
availability, after borrowings on the facilities and outstanding letters of
credit, totaled approximately $234.6 million.
The information included in item 8 (entitled "Financial Statements and
Supplementary Data") in Part II of Nabors' 1998 Form 10-K is specifically
incorporated by reference in this Prospectus.
EVENTS OF DEFAULT AND NOTICE OF DEFAULT
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 (Indentures, Section 501):
(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 Nabors 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 Nabors;
(4) due to acceleration of any indebtedness for borrowed money in a principal
amount in excess of $25.0 million for which Nabors or any Principal
Subsidiary is liable, including Debt Securities of another series, or a
default by Nabors or any Principal Subsidiary in the payment at final
maturity of
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<PAGE> 15
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 Nabors
thereof, unless such acceleration or default at maturity shall be remedied
or cured by Nabors 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 Nabors.
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.
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 Nabors, 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.) Nabors must furnish annually to the Trustee a
statement by one of certain specified officers of Nabors 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.)
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 (Indentures, Section 507):
(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;
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<PAGE> 16
(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.
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 Nabors 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 Nabors 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
(Indentures, Section 902):
(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, Nabors 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.
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 Nabors 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.)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures allow Nabors 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
14
<PAGE> 17
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 of Default" (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) Nabors has delivered to the Trustee (i) in the case of defeasance, an
Opinion of Counsel stating that (A) Nabors 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.
Nabors may exercise its defeasance option with respect to such Debt Securities
notwithstanding its prior exercise of its covenant defeasance option. If Nabors
exercises its defeasance option, payment of such Debt Securities may not be
accelerated because of an Event of Default. If Nabors 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 Nabors 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, Nabors will remain liable for
making such payments. (Indentures, Article Thirteen.)
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<PAGE> 18
CERTAIN COVENANTS
Maintenance of Office or Agency. Nabors 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.)
Paying Agents, Etc. If Nabors 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 Nabors 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 Nabors 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
Nabors, and thereafter the holder of those Debt Securities may look only to
Nabors 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
Nabors 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 Nabors unless (i) either
Nabors 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 Nabors' 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 Nabors 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 Nabors, 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 Nabors, 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
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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 Nabors
is liquidated or insolvent, then Holders of Subordinated Debt Securities may
recover less, ratably, than holders of Senior Debt or other creditors of Nabors
who are not subordinated to holders of Senior Debt.
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.)
Nabors 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 Nabors) 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 Nabors 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
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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 Nabors.
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 Nabors or its subsidiaries, will also
constitute Senior Debt. At May 31, 1999, Senior Debt outstanding aggregated
approximately $390.9 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 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. Nabors 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 Nabors, if
the Debt Securities are offered and sold directly by Nabors. 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. Nabors understands that, under existing industry
practices, if
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Nabors 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
Nabors, 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.
THE TRUSTEE
Each Indenture contains certain limitations on the Trustee's right, if it
becomes a creditor of Nabors within three months of, or subsequent to, a default
by Nabors, 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, Nabors 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 Nabors' Restated Certificate of Incorporation, the authorized
capital stock of Nabors consists of 200,000,000 shares of Common Stock, par
value $.10 per share, 8,000,000 shares of Class B Stock, par value $.10 per
share, none of which are outstanding, and 10,000,000 shares of Preferred Stock,
par value $.10 per share, none of which are outstanding.
As of May 31, 1999, Nabors had 107,010,097 shares of common stock
outstanding, 19,543,434 shares of common stock reserved for issuance pursuant to
option and employee benefit plans and 9,517,132 shares of common stock reserved
for issuance upon the conversion of the 5% notes. In addition, we have reserved
333,988 shares of common stock for issuance upon the exercise of outstanding
warrants and 19,750,000 shares of common stock for issuance upon the
consummation of our pending acquisition of Pool Energy Services Co. For more
information concerning this pending acquisition, please see our Form 10-Q for
the period ended March 31, 1999 under "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."
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
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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
Nabors 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 Nabors (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 Nabors, 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, Nabors has no Preferred Stock
outstanding.
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 Nabors;
(7) whether Nabors 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 Nabors 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 Nabors 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 Nabors 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 Nabors.
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
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Board of Directors of Nabors 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 Nabors, on the record dates fixed by the Board of
Directors of Nabors or a duly authorized committee thereof. Dividends on any
series of the Preferred Stock may be cumulative or noncumulative, as provided in
the related Prospectus Supplement.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of Nabors, 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 Nabors 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 Nabors, 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 Nabors 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 Nabors, in which case the number of other securities of Nabors to be
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 Nabors 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. Nabors 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 between Nabors and a
Depositary to be named by Nabors in the applicable Prospectus Supplement.
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 incorporated by reference 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.
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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 Nabors, 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 Nabors 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 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 Nabors 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 Nabors 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
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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 Nabors, 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 Nabors 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 Nabors, and Nabors 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.
Charges of Depositary. Nabors 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 Nabors that are delivered to the
Depositary and that Nabors is required or otherwise determines to furnish to the
holders of the corresponding series of Preferred Stock.
Neither the Depositary nor Nabors 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 Nabors under the Deposit Agreement
are limited to performing its duties thereunder in good faith. Neither Nabors
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. Nabors 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
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<PAGE> 26
stockholders may be called by the Board of Directors of Nabors and must be
called upon the written request of the holders of not less than 50% of Nabors'
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 Nabors' stock than
permitted by applicable law. Stockholders of Nabors do not have preemptive
rights to subscribe for shares of any class of Nabors' 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 Nabors may declare from time to time out of funds of Nabors legally
available for the payment of dividends. However, Nabors has neither declared nor
paid any cash dividends on its Common Stock or Class B Stock since 1982. Certain
of Nabors' 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, Nabors' ability to pay dividends. Under the terms of existing
instruments, Nabors may pay dividends to the extent that cumulative dividends
plus certain other payments since March 31, 1989, do not exceed 50% of Nabors'
cumulative net income since March 31, 1989, plus the proceeds of any offering of
equity securities of Nabors that are not redeemable at the option of the holder
of the securities. As of March 31, 1999, retained earnings available for
dividends totaled approximately $326 million. Nabors 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 reference herein) and Nabors' Amended and Restated By-Laws.
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 Nabors' directors are not liable to
Nabors 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 Nabors' officers, directors, employees and agents. Certain directors and
officers of Nabors 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
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<PAGE> 27
directors. Under the Certificate of Incorporation the Board of Directors of
Nabors 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 Nabors 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 Nabors deemed
undesirable by the Board of Directors of Nabors.
The Certificate of Incorporation provides that the board of directors of
Nabors 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 Nabors, 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 Nabors, 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
Nabors 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 separate
Warrant Agreements to be entered into between Nabors and a 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 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
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<PAGE> 28
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 Nabors 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
Nabors), unexercised Warrants will become void.
Upon receipt of payment and of the certificate evidencing a Warrant,
properly completed and duly executed, at the corporate trust office of the
Warrant Agent or any other office indicated in the applicable Prospectus
Supplement, Nabors 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
Nabors 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 Nabors may deem necessary or desirable and which will not
materially and adversely affect the interests of holders of outstanding
Warrants.
Nabors 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 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.
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<PAGE> 29
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, Nabors, 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 Nabors 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 Nabors 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 Nabors, this
Prospectus covers the offering for resale of an unspecified number of shares of
Common Stock by Selling Stockholders. 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 Nabors
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.
The Selling Stockholders may include or consist of, from time to time, such
underwriters and/or other persons with whom Nabors may enter into standby
arrangements from time to time as described under "Plan of Distribution."
PLAN OF DISTRIBUTION
DISTRIBUTION BY NABORS
Nabors 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.
In addition, Nabors may determine, from time to time, to redeem, repurchase
or tender for some or all of its outstanding indebtedness. In that case, Nabors
may determine to enter into an agreement with one or more underwriters or other
persons pursuant to which such underwriter or person would agree to act as a
"standby purchaser" and purchase from Nabors a number of shares of Common Stock
or other securities of Nabors as would be required to fund some or all of the
applicable redemption, repurchase or tender offer price. Alternatively, a
standby purchaser may agree to purchase directly any redeemed, repurchased or
tendered indebtedness and receive, as compensation therefor, securities issued
by Nabors. The agreement might also provide that the standby purchaser would
resell the securities received from Nabors. In such case, the standby purchaser
may be deemed to be an underwriter and may be required to resell such securities
pursuant to a Prospectus Supplement to this Prospectus. The applicable terms of
any
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<PAGE> 30
such agreement or arrangement, including terms relating to compensation and the
identity of any such standby purchaser, would be disclosed in a 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, Nabors 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 Nabors.
In connection with the sale of Securities, underwriters, dealers or agents
may receive compensation from Nabors or from purchasers of Securities for whom
they may act as agents in the form of discounts, 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 Nabors (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 Nabors 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 Nabors, underwriters, dealers
and agents who participate in the distribution of Securities may be entitled to
indemnification by Nabors against (and contribution toward) certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by Nabors for certain expenses.
If so indicated in the applicable Prospectus Supplement, Nabors will
authorize agents and underwriters or dealers to solicit offers by certain
purchasers to purchase offered Securities from Nabors, 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 Nabors 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 Nabors 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
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<PAGE> 31
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 Nabors, 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 Nabors 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 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 Nabors.
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
Nabors 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.
Nabors 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 Nabors by Winston & Strawn, New York, New York, and for
any underwriters or agents by counsel to be named in the appropriate Prospectus
Supplement.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in accounting and auditing.
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<PAGE> 32
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth the best estimate of Nabors 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 Securities and Exchange Commission
registration fee, all amounts are estimates):
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $139,625.76
American Stock Exchange listing fee......................... 17,500
Printing and engraving expenses............................. 125,000
Legal fees and expenses..................................... 125,000
Accounting fees and expenses................................ 50,000
Blue sky fees and expenses.................................. 10,000
Trustee's fees and expenses................................. 30,000
Miscellaneous............................................... 873.24
===========
Total............................................. $ 500,000
</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> 33
(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.
Nabors 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 Nabors' 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 Nabors 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.
**4.2 -- 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 Winston & Strawn
12.1 -- Statement of Computation of Ratios of Earnings to Fixed
Charges.
23.1 -- Consent of Winston & Strawn (included in Exhibit 5.1).
</TABLE>
II-2
<PAGE> 34
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.2 -- Consent of PricewaterhouseCoopers LLP.
24.1 -- Powers of Attorney (included on signature page).
*25.1 -- Statement of Eligibility of Trustee for the Senior Debt
Securities on Form T-1.
*25.2 -- Statement of Eligibility of Trustee for the Subordinated
Debt Securities on Form T-1.
</TABLE>
- ---------------
* To be filed by amendment or to be incorporated by reference in connection
with the offering of Securities.
** Filed as an Exhibit to Registration Statement on Form S-3 (No. 333-25233)
filed with the Commission on April 15, 1997.
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 Securities and Exchange 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) 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, individu-
II-3
<PAGE> 35
ally or in the aggregate, represent a fundamental change in the
information set 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 Securities and Exchange Commission under
Section 305(b)(2) of the Trust Indenture Act.
II-4
<PAGE> 36
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on the 18th day of June, 1999.
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
Registration Statement has been signed by the following persons in the
capacities and on the dates stated. Each person whose signature to this
Registration Statement appears below hereby appoints Anthony G. Petrello or
Bruce P. Koch as his attorney-in-fact, with full power of substitution, to sign
on his behalf, individually and in the capacities stated below, and to file (i)
any and all amendments and post-effective amendments to this Registration
Statement and (ii) any registration statement relating to the same offering
pursuant to Rule 462(b) under the Securities Act of 1933, which amendment or
amendments or registration statement may make such changes and additions as such
attorney-in-fact may deem necessary or appropriate.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ EUGENE M. ISENBERG Chairman, Chief Executive June 18, 1999
- ----------------------------------------------------- officer and Director
Eugene M. Isenberg (principal executive officer)
/s/ ANTHONY G. PETRELLO President, Chief Operating June 18, 1999
- ----------------------------------------------------- Officer and Director
Anthony G. Petrello
/s/ RICHARD A. STRATTON Vice Chairman and Director June 18, 1999
- -----------------------------------------------------
Richard A. Stratton
/s/ BRUCE P. KOCH Vice President of Finance June 18, 1999
- ----------------------------------------------------- (principal financial and
Bruce P. Koch accounting officer)
/s/ HANS W. SCHMIDT Director June 18, 1999
- -----------------------------------------------------
Hans W. Schmidt
/s/ MYRON M. SHEINFELD Director June 18, 1999
- -----------------------------------------------------
Myron M. Sheinfeld
/s/ JACK WEXLER Director June 18, 1999
- -----------------------------------------------------
Jack Wexler
/s/ MARTIN J. WHITMAN Director June 18, 1999
- -----------------------------------------------------
Martin J. Whitman
</TABLE>
II-5
<PAGE> 37
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<C> <S>
*1.1 -- Form of Underwriting Agreement.
**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 Winston & Strawn
12.1 -- Statement of Computation of Ratios of Earnings to Fixed
Charges.
23.1 -- Consent of Winston & Strawn (included in Exhibit 5.1).
23.2 -- Consent of PricewaterhouseCoopers LLP.
24.1 -- Powers of Attorney (included on signature page).
*25.1 -- Statement of Eligibility of Trustee for the Senior Debt
Securities on Form T-1.
*25.2 -- Statement of Eligibility of Trustee for the Subordinated
Debt Securities on Form T-1.
</TABLE>
- ---------------
* To be filed by amendment or to be incorporated by reference in connection
with the offering of Securities.
** Filed as an Exhibit to Registration Statement on Form S-3 (No. 333-25233)
filed with the Commission on April 15, 1997.
<PAGE> 1
EXHIBIT 12.1
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In thousands, except ratio amounts)
<TABLE>
<CAPTION>
Three Three
Months Ended Year Ended Months Ended
March 31, December 31, December 31, Year Ended September 30,
1999 1998 1997 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Pretax income $ 19,613 $ 199,981 $ 62,616 $ 182,410 $ 81,600 $ 58,628 $ 6,239
Add fixed charges as adjusted (from below) 5,575 16,040 4,107 16,980 12,258 7,933 8,555
--------- --------- --------- --------- --------- --------- ---------
Earnings $ 25,188 $ 216,021 $ 66,723 $ 199,390 $ 93,858 $ 66,561 $ 14,794
--------- --------- --------- --------- --------- --------- ---------
Fixed charges:
Interest expense:
Interest on indebtedness $ 5,259 $ 14,974 $ 3,858 $ 15,993 $ 11,356 $ 7,297 $ 7,923
Capitalized -- 2,648 297 1,191 985 747 391
Amortization of debt costs 146 489 121 527 528 314 314
Interest portion of rental expense 170 577 128 460 374 322 318
--------- --------- --------- --------- --------- --------- ---------
Fixed charges before adjustments 5,575 18,688 4,404 18,171 13,243 8,680 8,946
Less capitalized interest -- (2,648) (297) (1,191) (985) (747) (391)
--------- --------- --------- --------- --------- --------- ---------
Fixed charges as adjusted $ 5,575 $ 16,040 $ 4,107 $ 16,980 $ 12,258 $ 7,933 $ 8,555
--------- --------- --------- --------- --------- --------- ---------
Ratio (earnings divided by fixed charges
before adjustments) 4.52 11.56 15.15 10.97 7.09 7.67 1.65
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this registration
statement on Form S-3 (File No. 333- ) of our report dated February 2,
1999 relating to the financial statements, which appears in the Nabors
Industries, Inc. Annual Report on Form 10-K for the year ended December 31,
1998. We also consent to the reference to us under the heading "Experts" in such
registration statement.
PricewaterhouseCoopers LLP
Houston, Texas
June 18, 1999
