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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1997.
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
UNIT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1000 KENSINGTON TOWER 73-1283193
(State or other jurisdiction of 7130 SOUTH LEWIS (I.R.S. Employer
incorporation or organization) TULSA, OKLAHOMA 74136 Identification No.)
(918) 493-7700
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
With A Copy To:
MARK E. SCHELL LYNNWOOD R MOORE
GENERAL COUNSEL & SECRETARY CONNER & WINTERS,
1000 KENSINGTON TOWER A Professional Corporation
TULSA, OKLAHOMA 74136 15 EAST 5th STREET
(918) 493-7700 3700 FIRST PLACE TOWER
(Name, address, including zip code, TULSA, OKLAHOMA 74103-4391
and telephone number including area code, (918) 586-5711
of agent for service)
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please 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, 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 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. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT
TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE OF
SECUTITIES TO TO BE PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED PER SHARE PRICE FEE
Common Stock, par
value $0.20 per share. 1,300,000 $9.625(1) $12,512,500(1) $3,692
(1) Pursuant to Rule 457(c), the registration fee is calculated on the basis of
the average of the high and low sale prices for the Common Stock on the
New York Stock Exchange on December 15, 1997, $9.625 per share.
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Subject to Completion: Dated December 16, 1997
PROSPECTUS
1,300,000 SHARES
UNIT CORPORATION
COMMON STOCK
The 1,300,00 shares (the "Shares") of common stock, par value $0.20 per share
(the "Common Stock"), of Unit Corporation, a Delaware corporation ("UNIT" or
the "Company"), offered hereby are held by certain shareholders of the Company
(the "Selling Stockholders"). The Company will not receive any part of the
proceeds of the sale of the Shares.
Any or all of the Shares being registered hereby may be sold from time to time
to purchasers directly by any Selling Stockholder. Alternatively, any Selling
Stockholder may from time to time offer the Shares through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from such Selling Stockholder and/or the
purchaser of the Shares for whom they may act as agent. Any such Selling
Stockholder, and any such underwriters, dealers or agents that participate in
the distribution of the Shares, may be deemed to be underwriters, and any profit
on the sale of the Shares by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended (the "Securities Act"). To the
extent required, the names of the Selling Stockholders, the number of Shares to
be sold, purchase price, public offering price, the name of any agent, dealer or
underwriter and any applicable commission or discount or other items
constituting compensation or indemnification arrangements with respect to a
particular offering will be set forth in an accompanying Prospectus Supplement.
See "Plan of Distribution By Selling Stockholders."
The Company has agreed to indemnify the Selling Stockholders against certain
liabilities, including liabilities under the Securities Act. See "Plan of
Distribution By Selling Stockholders."
The total costs, fees and expenses incurred in connection with the registration
of the Shares are estimated to be approximately $13,192.
The Common Stock is traded on the New York Stock Exchange ("NYSE") under the
symbol "UNT". On December 15, 1997, the closing sales price of the Common Stock
as reported on the NYSE was $9.25 per share.
INVESTORS SHOULD CONSIDER CAREFULLY THE MATTERS SET FORTH
UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 16, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Registration
Statement (as defined herein), as well as such reports, proxy statements and
other information filed by the Company with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at its regional
offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. Copies of such material can also be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a site on the World Wide Web
that contains certain documents filed with the Commission electronically. The
address of such site is http://www.sec.gov and the Registration Statement
may be inspected at such site. The Common Stock is listed and traded on the New
York Stock Exchange and certain of the Company's reports, proxy statements and
other information can be inspected at the offices of the New York Stock
Exchange, 11, Wall Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form S-3
(together with any amendments or supplements thereto, the "Registration
Statement") under the Securities Act with respect to the Shares. This Prospectus
does not contain all of the information set forth in the Registration Statement
and the exhibits thereto, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Shares, reference is made to the Registration
Statement and the exhibits thereto. Statements contained in this Prospectus (or
in any document incorporated into this Prospectus by reference) as to the
contents of any contract or other document referred to herein (or therein) are
not necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement. Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents, which have been filed by the
Company with the Commission pursuant to the Exchange Act (Commission File No. 1-
9260) or the Securities Act, are incorporated herein by reference and made a
part of this Prospectus:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1996;
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June
30, 1997 and September 30, 1997; and
3. Current Reports on Form 8-K filed December 5, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made hereby shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the respective
dates of filing of such documents.
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Any statement contained in a document or information incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document that also is, or is deemed to be,
incorporated herein by reference, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company undertakes to provide, without charge, to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the documents
or information referred to above that have been or may be incorporated by
reference in this Prospectus (excluding exhibits to such documents unless such
exhibits are specifically incorporated by reference). Requests should be
directed to the corporate secretary, 1000 Kensington Tower, 7130 South Lewis,
Tulsa, Oklahoma 74136, telephone number (918) 493-7700.
THE COMPANY
The Company, through its wholly owned subsidiaries, is engaged in the land
contract drilling of oil and natural gas wells and the development, acquisition
and production of oil and natural gas properties. The Company operates
primarily in the Anadarko and Arkoma Basins, which cover portions of Oklahoma,
Texas, Kansas and Arkansas and has additional producing properties located in
Canada and other states, including but not limited to, New Mexico, Louisiana,
North Dakota, Colorado, Wyoming, Montana, Alabama and Mississippi.
The Company was originally incorporated in Oklahoma in 1963 as Unit Drilling
Company. In 1979 it became a publicly held Delaware corporation and changed its
name to Unit Drilling and Exploration Company ("UDE") to more accurately reflect
the importance of its oil and natural gas business. In September 1986, pursuant
to a merger and exchange offer, the Company acquired all of the assets and
assumed all of the liabilities of UDE and six oil and gas limited partnerships
for which UDE was the general partner, in exchange for shares of Common Stock.
The Company's principal executive offices are maintained at 1000 Kensington
Tower I, 7130 South Lewis, Tulsa, Oklahoma 74136; telephone number (918) 493-
7700. The Company also has regional offices in Moore, Oklahoma,
Booker, Texas and Houston, Texas.
RECENT DEVELOPMENTS
On November 20, 1997, the Company closed the acquisition of Hickman Drilling
Company, an Oklahoma corporation (the "Hickman Acquisition") pursuant to an
Agreement and Plan of Merger, dated November 20, 1997 (the "Merger Agreement")
entered into by and between the Company, the Company's wholly owned subsidiary
Unit Drilling Company, Hickman Drilling Company and all of the holders of the
outstanding capital stock of Hickman Drilling Company (the "Selling
Stockholders"). Under the terms of this acquisition, the Selling Stockholders
received, in the aggregate, 1,300,000 shares of Common Stock and promissory
notes to be issued in the aggregate principal amount of $5,000,000, subject to
adjustment as provided in the Merger Agreement, to be paid in five equal annual
installments commencing January 2, 1999.
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RISK FACTORS
In addition to the other information contained or incorporated by reference in
this Prospectus, the following factors should be considered carefully by
prospective investors in evaluating the Company before purchasing any of the
securities offered hereby. The information contained or incorporated by
reference in this Prospectus or any Prospectus Supplement includes forward-
looking statements that involve risks and uncertainties, a number of which are
identified in this "Risk Factors" section. These risks and uncertainties
include, without limitation, industry conditions and the variability of demand
for contract drilling and related oilfield services, intense competition, oil
and natural gas price fluctuations, operating risks inherent in the industry in
which the Company's subsidiaries operate, the adequacy and availability of
insurance, regulations pertaining to environmental matters and the other matters
detailed or referred to below and from time to time in the Company's other
reports filed with the Commission.
The information set forth under the caption "Safe Harbor Statement of Further
Activity" in the Company's 1996 Form 10-K, in addition to the other information
included in the 1996 Form 10-K, is specifically incorporated by reference
herein.
Industry Conditions
The Company's current business and operations are substantially dependent upon
conditions in the oil and gas industry. The demand for contract land drilling
and related services is directly influenced by oil and gas prices, expectations
about future prices, the cost of producing and delivering oil and gas,
government regulations, local and international political and economic
conditions, including the ability of the Organization of Petroleum Exporting
Countries ("OPEC") to set and maintain production levels and prices, the level
of production by non-OPEC countries and the policies of the various governments
regarding exploration and development of their oil and gas reserves. There can
be no assurance that current levels of oil and gas exploration expenditures will
be maintained or that demand for the Company's contract drilling services will
reflect the level of such expenditures.
Competition
All lines of business in which the Company's subsidiaries engage are highly
competitive. The land drilling industry is a highly competitive and cyclical
business characterized by high capital and maintenance costs. Drilling contracts
are usually awarded on a competitive bid basis and, while an operator may
consider factors such as quality of service and type and location of equipment
as well as the ability to provide ancillary services, price and rig availability
are the primary factors in determining which contractor is awarded a job.
Certain of the Company's competitors have greater financial and human resources
than the Company, which may enable them to better withstand periods of low rig
utilization, to compete more effectively on the basis of price and technology,
to build new rigs or acquire existing rigs and to provide rigs more quickly than
the Company in periods of high rig utilization. A number of the Company's
competitors have also announced plans to refurbish and reactivate rigs from
their inventory of stacked rigs. The deployment of these additional rigs to the
Company's core markets could further intensify competition based on pricing
and rig availability. There can be no assurance that the Company will be able to
compete successfully against its competitors in the future or that the level of
competition will allow the Company to obtain adequate margins from its
drilling services.
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The Company's oil and natural gas operations likewise encounter strong
competition from major oil companies, independent operators, and others. Many
of these competitors have appreciably greater financial, technical and other
resources and are more experienced in the exploration for and production of oil
and natural gas than the Company.
Operating Risks And Insurance
The Company's land contract drilling and oil and natural gas operations are
subject to a variety of oil field hazards such as fire, explosion, blowouts,
cratering and oil spills or certain other types of possible surface and
subsurface pollution, any of which can cause personal injury and loss of life
and severely damage or destroy equipment, suspend drilling operations and cause
substantial damage to surrounding areas or property of others. As protection
against some, but not all, of these operating hazards, the Company maintains
broad insurance coverage, including all-risk physical damage, employer's
liability and comprehensive general liability. In all states in which the
Company operates except Oklahoma, the Company maintains worker's compensation
insurance for losses exceeding $50,000. In Oklahoma, starting in August 1991,
the Company elected to become self insured. In consideration therewith, the
Company purchased an excess liability reinsurance policy. The Company believes
that to the extent reasonably practicable such insurance coverages are adequate.
The Company's insurance policies do not, however, provide protection against
revenue losses incurred by reason of business interruptions caused by the
destruction or damage of major items of equipment nor certain types of hazards
such as specific types of environmental pollution claims. In view of the
difficulties which may be encountered in renewing such insurance at reasonable
rates, no assurance can be given that the Company will be able to maintain the
amount of insurance coverage which it considers adequate at reasonable rates.
Moreover, loss of or serious damage to any of the Company's equipment, although
adequately covered by insurance, could have an adverse effect upon the Company's
earning capacity.
The Company's oil and natural gas operations are also subject to all of the
risks and hazards typically associated with the search for and production of oil
and natural gas. These include the necessity of expending large sums of money
for the location and acquisition of properties and for drilling exploratory
wells. In such exploratory work, many failures and losses may occur before any
accumulation of oil or natural gas is found. If oil or natural gas is
encountered, there is no assurance that it will be capable of being produced or
will be in quantities sufficient to warrant development or that it can be
satisfactorily marketed. The Company's future natural gas and crude oil
revenues and production, and therefor cash flow and income, are highly dependent
upon the Company's level of success in acquiring or finding additional reserves.
Without continuing reserve additions through exploration or acquisitions, the
Company's reserves and production will decline over the long-term.
Shortages of Personnel
The demand for, and wage rates of, qualified rig crews have begun to rise in the
land drilling industry in response to the increasing number of active rigs in
service. Although the Company has not encountered material difficulty in hiring
and retaining rig crews, such shortages have in the past occurred in the
industry and are again arising as demand for land drilling services increases.
The Company may experience shortages of qualified personnel to operate its rigs,
which could have a material adverse effect on the Company's financial condition
and results of operations.
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Governmental Regulations
Many aspects of the Company's operations are affected by domestic and foreign
political developments and are subject to numerous laws and regulations that may
relate directly or indirectly to the oil and natural gas industry. For example,
the Company's operations are subject to extensive and evolving laws and
regulations governing environmental quality, pollution control, remediation of
contamination and preservation of natural resources. Such laws and regulations
pertain, among other things, to air emissions, waste management, spills and
other discharges, wetlands and endangered species protection and cleanup of
contamination. The handling of waste materials, some of which are classified as
hazardous substances, is a routine part of the Company's operations.
Consequently, the regulations applicable to the Company's operations include
those with respect to containment, disposal and controlling the discharge of
hazardous oilfield waste and other nonhazardous waste material into the
environment, requiring removal and cleanup under certain circumstances, or
otherwise relating to the protection of the environment. Laws and regulations
protecting the environment have become more stringent in recent years and may in
certain circumstances impose strict liability, rendering a party liable for
environmental damage without regard to negligence or fault on the part of such
party. Such laws and regulations may expose the Company to liability for the
conduct of, or conditions caused by, others or for acts of the Company which
were in compliance with all applicable laws at the time such acts were
performed. The Company may also be exposed to environmental or other liabilities
originating from businesses and assets subsequently acquired by the Company.
Compliance with such laws and regulations may require significant capital
expenditures. Although such compliance costs to date have not had a material
effect on the Company, application of these requirements or the adoption of new
requirements could have a material adverse effect on the Company. In addition,
the modification or judicial interpretations of existing laws or regulations or
the adoption of new laws or regulations curtailing exploratory or development
drilling for oil and gas for economic, environmental or other reasons could have
a material adverse effect on the Company's operations by limiting future
opportunities.
Restrictions Imposed by Terms of Indebtedness
The loan agreement setting forth the terms of the Company's bank loan agreement
contains certain restrictive covenants. This agreement also requires the Company
to maintain specific financial ratios and satisfy certain financial condition
tests. The Company's ability to meet those financial ratios and financial
condition tests can be affected by events beyond its control, and there can be
no assurance that the Company will meet those tests.
Qualification of The Hickman Acquisition as a Reorganization For U.S. Federal
Income Tax Purposes
The Hickman Acquisition is intended to qualify as a tax free reorganization
under Sections 368 of the Internal Revenue Code of 1986, as amended (the
"Code"), with respect to the Common Stock received by the Selling Stockholders.
If the Hickman Acquisition fails to qualify as a tax free reorganization for any
reason, the receipt of Common Stock will be taxable to the Selling Stockholders
at the time of the Hickman Acquisition, and Hickman Drilling Company will be
deemed to have sold all of its assets in a taxable exchange triggering a
corporate tax liability to Hickman Drilling Company. The Company's wholly-owned
subsidiary, Unit Drilling Company, as the surviving corporation of the Hickman
Acquisition, arguably could be liable for any such corporate tax, if imposed.
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FORWARD-LOOKING STATEMENTS
This Prospectus contains, or incorporates by reference, certain statements that
may be deemed "forward-looking statements" within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. All statements, other
than statements of historical facts, that address activities, events or
developments that the Company intends, expects, projects, believes or
anticipates will or may occur in the future are forward-looking statements. Such
statements are based on certain assumptions and analyzes made by management of
the Company in light of its experience and its perception of historical trends,
current conditions, expected future developments and other factors it believes
to be appropriate. The forward-looking statements included in this Prospectus
are also subject to a number of material risks and uncertainties. Prospective
investors are cautioned that such forward-looking statements are not guarantees
of future performance and that actual results, developments and business
decisions may differ from those envisaged by such forward-looking statements.
SHARES ELIGIBLE FOR FUTURE SALE
There are 1.3 million shares of Common Stock which are available for sale under
this Prospectus. On a fully diluted basis, such shares represent approximately
5.01% of the Company's outstanding Common Stock.
SELLING STOCKHOLDERS
The following table sets forth certain information, as of the date hereof, with
respect to the number of Shares beneficially owned and being offered hereby by
the Selling Stockholders. All of the Shares of the Selling Stockholders were
received by them as part of the merger consideration in the Hickman Acquisition
(See "Recent Developments"). The offer and sale of the Shares are being
registered pursuant to the registration rights granted to the Selling
Stockholders in that transaction.
SHARES
SHARES BENEFICIALLY
BENEFICIALLY SHARES OFFERED OWNED AFTER THE
NAME OF BENEFICIAL OWNER OWNED HEREBY OFFERING(1)
------------------------ ------------ -------------- ---------------
H. C. Hickman(2) 331,192 331,192 0
Bonnie B. Hickman(2) 331,192 331,192 0
Gregory S. Hickman(3) 318,808 318,808 0
Bradley L. Hickman(3) 318,808 318,808 0
(1) Assumes that all of the Shares covered by this Prospectus are sold and the
Selling Stockholder does not acquire beneficial ownership of additional
shares of Common Stock after the date of this Prospectus unless otherwise
noted.
(2) Share data represents shares of Common Stock which are owned indirectly as
Trustee of a Revocable Trust.
(3) Share data represents 108,625 shares of Common Stock which are owned
directly and 210,183 shares which are owned indirectly as Trustee of an
Irrevocable Trust.
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PLAN OF DISTRIBUTION BY SELLING STOCKHOLDERS
Any or all of the Shares being registered hereby may be sold from time to time
to purchasers directly by any Selling Stockholder. Alternatively, any Selling
Stockholder may from time to time offer the Shares through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from such Selling Stockholder and/or the
purchaser of the Shares for whom they may act as agent. Any such Selling
Stockholder, and any such underwriters, dealers or agents that participate in
the distribution of the Shares, may be deemed to be underwriters, and any profit
on the sale of the Shares by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. In addition, the Selling Stockholders may from time
to time sell the Shares in transactions permitted by Rule 144 or Rule 145, as
applicable, under the Securities Act. To the extent required, the names of the
Selling Stockholders, the number of Shares to be sold, purchase price, public
offering price, the name of any agent, dealer or underwriter and any applicable
commission or discount or other items constituting compensation or
indemnification arrangements with respect to a particular offering will be set
forth in an accompanying Prospectus Supplement. The Company will receive
no proceeds from the sale by any Selling Stockholder of the Shares offered
hereby.
In connection with distributions of the Shares, any Selling Stockholder may
enter into hedging transactions with broker-dealers and the broker-dealers may
engage in short sales of the Shares in the course of hedging the positions
they assume with such Selling Stockholder. Any Selling Stockholder also may
sell the Shares short and deliver the Shares to close out such short positions.
Any Selling Stockholder also may enter into option or other transactions with
broker-dealers that involve the delivery of the Shares to the broker-dealers,
which may then resell or otherwise transfer such Shares. Any Selling
Stockholder also may loan or pledge the Shares to a broker-dealer and the
broker-dealer may sell the Shares so loaned or upon a default may sell or
otherwise transfer the pledged the Shares.
The Shares covered by this Prospectus are shares of Common Stock issued to the
Selling Stockholders in the Hickman Acquisition. Under the terms of the
registration rights granted to the Selling Stockholders in connection with the
Hickman Acquisition, each Selling Stockholder agrees that until the first
anniversary of the consummation of the Hickman Acquisition, he or she will not
sell shares in excess of an amount equal to 1% of the total number of shares
of the Company's outstanding Common Stock during a three-month period without
the Company's consent.
The Company has agreed to bear the cost of preparing and filing this Prospectus
and the Registration Statement of which it forms a part, estimated to be
approximately $13,192. Each Selling Stockholder who received Shares in the
Hickman Acquisition has agreed to indemnify the Company and each other such
Selling Stockholder with respect to any statements or omissions in this
Prospectus or the Registration Statement of which it forms a part based
on written information furnished by such Selling Stockholder.
There is no assurance that the Selling Stockholders will sell any or all of the
Shares offered hereby.
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DESCRIPTION OF CAPITAL STOCK
The Company's Certificate authorizes the issuance of 40,000,000 shares of Common
Stock, $.20 par value, of which 25,496,973 shares were outstanding on November
30, 1997 and 5,000,000 shares of $1.00 par value Preferred
Stock none of which are currently outstanding.
Common Stock
The holders of Common Stock are entitled to one vote per share on all matters
upon which stockholders generally have the right to vote, including the election
of directors. Except as otherwise required by law or provided in any resolution
adopted by the Board of Directors of the Company with respect to any series of
preferred stock of the Company, the holders of such Common Stock will
exclusively possess all voting power. The holders of the Common Stock do not
have preemptive rights. All shares of Common Stock rank equally on dissolution
and are entitled to participate equally in such dividends as may be declared by
the Board of Directors out of funds legally available therefore.
All shares of Common Stock presently outstanding are fully paid and non-
assessable.
The shares of Common Stock do not have cumulative voting rights, which means
that the holders of a majority of the shares voting for the election of
directors can elect the entire board if they choose to do so and, in such event,
the holders of the remaining shares will not be able to elect any person or
persons to the Board of Directors.
Preferred Stock
As of the date of this Prospectus, there were no shares of Preferred Stock
outstanding. Preferred Stock may be issued from time to time in one or more
series, and the Board of Directors, without further approval of the
stockholders, is authorized to fix the dividend rates and terms, conversion
rights, voting rights, redemption rights and terms, liquidation preferences,
sinking fund and any other rights, preferences, privileges and restrictions
applicable to each series of Preferred Stock. The purpose of authorizing the
Board of Directors to determine such rights, preferences, privileges and
restrictions is to eliminate delays associated with a stockholder vote on
specific issuances. The issuance of Preferred Stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes, could, among other things, adversely affect the voting power of the
holders of Common Stock and, under certain circumstances, make it more difficult
for a third party to gain control of the Company.
Certain provisions of the Company's Certificate and By-laws which are described
below, might have the effect of delaying, deferring or preventing a change in
control of the Company.
Fair Price Provision
The Company's Certificate requires that certain business transactions with
related persons be approved by the affirmative vote of the holders of not less
than 80% of the outstanding shares of the Company's voting stock. Related
persons are defined in the Certificate as those having 5% or greater interest in
the Company's voting stock. This super-majority vote of the Company's
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stockholders does not apply to a business transaction with a related person in
which, among other things, the price paid for the Company's Common Stock equals
or exceeds the highest price paid by the related person in acquiring any of its
holdings of Common Stock or to a business transaction with a related person
which is approved by the directors of the Company who are not affiliated with
such related person.
Classified Board of Directors
The Company's Board of Directors shall be not less than three persons nor more
than ten persons and is divided into three classes. Each class has a three-year
term and only one class is elected by the stockholders each year.
Super-Majority Provisions
Subject to certain exceptions, the Certificate requires an 80% approval vote for
certain fundamental corporate actions for which stockholders approval is
required by law, such as mergers with and sales of $10 million or more of the
Company's assets to related persons. The affirmative vote of holders of 80% or
more of the voting power of shares then outstanding is also required for
amendments of the provisions of the Certificate which specify the maximum and
minimum number of Directors and which impose an 80% vote for certain fundamental
corporate transactions and of the fair price provisions. Certain legal matters
in connection with the Shares have been passed upon for the Company by Conner &
Winters, A Professional Corporation, Tulsa, Oklahoma.
Delaware Business Combination Act
The Company is incorporated under the laws of the State of Delaware. Section
203 of the Delaware General Corporation Law prevents an "interested stockholder"
(defined as a stockholder owning 15 percent or more of a corporation's voting
stock) from engaging in a business combination with such corporation for a
period of three years from the date such stockholder became an interested
stockholder unless (a) the corporation's board of directors had earlier approved
either the business combination or transaction by which the stockholder became
an interested stockholder, or (b) upon attaining that status, the interested
stockholder had acquired at least 85 percent of the corporation's voting stock
(not counting shares owned by persons who are directors and also officers), or
(c) the business combination is later approved by the board of directors and
authorized by a vote of two-thirds of the stockholders (not including the shares
held by the interested stockholder). Since the Company has not amended its
Charter or Restated By-laws to exclude the application of Section 203, such
section does apply to the Company and thus may inhibit an interested
stockholder's ability to acquire additional shares of Common Stock or otherwise
engage in a business combination with the Company.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated balance sheets of Unit Corporation as of December 31, 1996 and
1995, and the consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended December 31, 1996,
incorporated by reference in this registration statement, have been included
herein in reliance on the report of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in auditing and
accounting. With respect to the unaudited interim financial information for the
10
<PAGE>
periods ended March 31, 1997, June 30, 1997 and September 30, 1997, incorporated
by reference in this registration statement, the independent accountants have
reported that they applied limited procedures in accordance with professional
standards for a review of such information. However, their separate report
included in the Company's quarterly reports on Form 10-Q for the quarters ended
March 31, 1997, June 30,1997 and September 30, 1997, and incorporated by
reference herein, states that they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their report on such information should be restricted in light of
the limited nature of the review procedures applied. The accountants are not
subject to the liability provisions of Section 11 of the Securities Act of 1933
for their report on the unaudited interim financial information because that
report is not a "report" or a "part" of the registration statement prepared or
certified by the accountants within the meaning of Sections 7 and 11 of the Act.
LEGAL MATTERS
Certain legal matters in connection with the Shares have been passed upon for
the Company by Conner & Winters, A Professional Corporation, Tulsa, Oklahoma.
11
<PAGE>
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, NOR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES IN ANY JURISDICTION TO OR FROM ANY PERSON TO OR FROM WHOM IT IS NOT
LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
PAGE
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference. . . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Recent Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . 7
Shares Eligible for Future Sale. . . . . . . . . . . . . . . . . . . . . 7
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Plan of Distribution by Selling Stockholders . . . . . . . . . . . . . . 8
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . 9
Independent Public Accountants . . . . . . . . . . . . . . . . . . . . .10
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
1,300,000 SHARES
UNIT CORPORATION
COMMON STOCK
(PAR VALUE $0.20 PER SHARE)
PROSPECTUS
DECEMBER 16, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . $ 3,692
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . . . . 0
Legal fees and expenses. . . . . . . . . . . . . . . . . . . . . . 5,000
Printing expenses. . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . 2,500
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
-------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . $13,192
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation of the Company contains a provision which
eliminates personal liability of the directors of the Company or its
stockholders for monetary damages for a breach of their fiduciary duties as
directors. This absolution of liability created by the Certificate does not
extend to (i) any breach of a director's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) any transaction from
which a director derives an improper personal benefit, and (iv) causing the
Company unlawfully to redeem or purchase any of its stock or improperly to pay
dividends to its stockholders.
The Bylaws of the Company do provide for indemnification of officers and
directors to the fullest extent allowed by Delaware law for liability incurred
in connection with the performance of their duties. The Company has also
entered into indemnification agreements with each of its officers and directors
providing for (i) indemnification by the Company from all claims involving the
officers and directors by reason of such officer's or director's position with
the Company to the broadest and maximum extent permitted by Delaware law, (ii)
indemnification by the Company for all expenses incurred in connection with each
successfully resolved issue, (iii) advancement of expenses prior to the
disposition of a claim, and (iv) a procedure to determine entitlement to
indemnification.
Although the Company's Certificate of Incorporation relieves directors of
liability for certain breaches of their fiduciary duties, liability for other
actions still remain. As noted above, a director is not relieved of liability
for breach of loyalty, bad faith acts or omissions, intentional misconduct, a
knowing violation of law, transactions from which he derives an improper
personal benefit, unlawfully causing the Company to redeem or purchase any stock
of the Company or causing the Company to improperly pay a dividend to any of its
stockholders. In addition, there is no effect on a director's liability under
federal and state securities laws or other statutorily imposed liability.
Finally, this provision has no effect on the availability of equitable remedies
such as injunctions and actions for rescission or breach of a director's
fiduciary duty.
II-1
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits
The exhibits listed in the Exhibit Index below are filed as part of the
Registration Statement:
EXHIBIT
NUMBER DESCRIPTION
2.6 -- Agreement and Plan of Merger dated November 20, 1997, by and
among Unit Corporation, Unit Drilling Company, Hickman
Drilling Company and the Selling Stockholders (incorporated
herein by reference to Exhibit 2.1 to Form 8-K dated
December 5, 1997).
4.1 -- Form of Promissory Note to be issued to the stockholders of
Hickman Drilling Company pursuant to the Agreement and Plan
of Merger dated November 20, 1997 (incorporated herein by
reference to Exhibit 4.1 to Form 8-K dated December 5, 1997).
5 -- Opinion of Conner & Winters, A Professional Corporation.
15 -- Letter on unaudited interim financial information.
23.1* -- Consent of Coopers & Lybrand, L.L.P.
23.5* -- Consent of Conner & Winters, A Professional Corporation
(included in their opinion
filed as Exhibit 5 hereto).
24 * -- Power of Attorney (included in the signature page hereto).
* Filed herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant 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 of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the 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 clauses (a)(1)(i) and (a)(1)(ii) of this
paragraph do not apply if the information required to be included
in a post-effective amendment by those clauses is contained in
periodic reports filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, 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; and
(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;
(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 Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) 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) 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 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
proceeding) 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 such indemnification by
it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tulsa, State of Oklahoma, on December 15, 1997.
II-3
<PAGE>
UNIT CORPORATION
By: /s/ John G. Nikkel
John G. Nikkel
President
Each person whose signature appears below hereby appoints John G. Nikkel and
Mark E. Schell or either of them who may act without the joinder of the other,
as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any registration statement for
the same offering filed pursuant to Rule 462 under the Securities Act of 1933,
and to file the same, with all exhibits thereto and all other documents in
connection therewith, with the Commission, granting unto said attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing appropriate or necessary to be done, as fully and for all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done virtue hereof.
Pursuant to 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 indicated.
II-4
<PAGE>
SIGNATURE TITLE DATE
/S/ KING P. KIRCHNER Chairman of the Board, Chief
- -------------------- Executive Officer and Director December 15, 1997
King P. Kirchner (Principal Executive Officer)
/S/ JOHN G. NIKKEL President, Chief Operating Officer
- ------------------ and Director December 15, 1997
J. G. Nikkel
/S/ EARLE LAMBORN Senior Vice President and
- ----------------- Director December 15, 1997
Earle Lamborn
/S/ LARRY D. PINKSTON Vice President, Treasurer and
- --------------------- Chief Financial Officer December 15, 1997
Larry D. Pinkston (Principal Financial Officer)
/S/ STANLEY W. BELITZ Controller
- --------------------- (Principal Accounting Officer) December 15, 1997
Stanley W. Belitz
/S/ JOHN H. WILLIAMS Director December 15, 1997
- --------------------
John H. Williams
/S/ JOHN S. ZINK Director December 15, 1997
- ----------------
John S. Zink
Director December 15, 1997
- ----------------
Don Cook
/S/ WILLIAM B. MORGAN Director December 15, 1997
- ---------------------
William B. Morgan
II-5
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
2.6 -- Agreement and Plan of Merger dated November 20, 1997, by and
among Unit Corporation, Unit Drilling Company, Hickman
Drilling Company and the Selling Stockholders including
form of Promissory Note (incorporated herein by reference to
Exhibit 2.1 to Form 8-K dated December 5, 1997).
4.1 -- Form of Promissory Note to be issued to the stockholders of
Hickman Drilling Company pursuant to the Agreement and Plan
of Merger dated November 20, 1997 (incorporated herein by
reference to Exhibit 4.1 to Form 8-K dated December 5,
1997).
5 * -- Opinion of Conner & Winters, A Professional Corporation.
15 -- Letter on unaudited interim financial information.
23.1 * -- Consent of Coopers & Lybrand, L.L.P.
23.5 * -- Consent of Conner & Winters, A Professional Corporation
(included in their opinion filed as Exhibit 5 hereto).
24 * -- Power of Attorney (included in the signature page hereto).
* Filed herewith.
<PAGE>
EXHIBIT 5
December 15, 1997
Unit Corporation
1000 Galleria Tower I
7130 South Lewis
Tulsa, Oklahoma 74170
Re: Unit Corporation; Form S-3 Registration Statement
Ladies and Gentlemen:
We have acted as special counsel to Unit Corporation (the "Company") in
connection with the Form S-3 Registration Statement (the "Registration
Statement") to be filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"). The Registration Statement relates to the proposed offer and sale from
time to time by certain Selling Stockholders (as defined in the Registration
Statement) of up to 1,300,000 shares of the Company's common stock, par value
$.20 per share ("Common Stock").
In reaching the conclusions expressed in this opinion, we have (a) examined
such corporate records, certificates of officers, other documents, and questions
of law as we have considered necessary or appropriate, (b) relied upon the
accuracy of facts and information set forth in all such documents, and (c)
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as copies, and the authenticity of the originals from
which all such copies were made.
On the basis of such examination and review, we are of the opinion that the
shares covered by the Registration Statement are validly issued, fully paid, and
non-assessable shares of Common Stock.
We consent to the reference to our firm under the heading "Legal Opinion"
and to the filing of this opinion as Exhibit 5 to the Registration Statement.
Very truly yours,
CONNERS & WINTERS
A Professional Corporation
<PAGE>
EXHIBIT 15
December 12, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Unit Corporation
Registration on Form S-3
We are aware that our reports dated April 28, 1997, July 28, 1997 and October
27, 1997 on our reviews of interim financial information of Unit Corporation for
the periods ended March 31, 1997, June 30, 1997 and September 30, 1997 and
included in the Company's quarterly reports on Form 10-Q for the quarters then
ended are incorporated by reference in this registration statement on Form S-3.
Pursuant to Rule 436(c) under the Securities Act of 1933, these reports should
not be considered a part of the registration statement prepared or certified by
us within the meaning of Section 7 and 11 of that Act.
COOPERS & LYBRAND L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Unit Corporation on Form S-3 (File No. ______________) of our report dated
February 18, 1997, on our audits of the consolidated financial statements and
financial statement schedule of Unit Corporation as of December 31, 1996 and
1995, and for the years ended December 31, 1996, 1995 and 1994, which report is
included in the Company's Annual Report on Form 10-K. We also consent to the
reference to our firm under the caption "Independent Public Accountants."
Coopers & Lybrand L.L.P.
Tulsa, Oklahoma
December 12, 1997
