<PAGE> 1
As filed with the Securities and Exchange Commission on May 19, 1997
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------------------------
<TABLE>
<S> <C> <C>
Delmar Petroleum, Inc. Delaware 76-0352203
Mexican Flats Service Company Delaware 93-0905263
Snyder Fluid Technologies, Inc. Delaware 75-2512445
Snyder Gas Marketing, Inc. Delaware 75-2249262
SOCO Gas Systems, Inc. Delaware 75-2529676
SOCO Holdings, Inc. Delaware 75-1940071
SOCO Louisiana Leasing, Inc. Delaware 75-2694181
SOCO Offshore, Inc. Delaware 74-2209188
Western Transmission Corporation Delaware 13-2664883
Wyoming Gathering and Production Delaware 52-1219944
Company
</TABLE>
<TABLE>
<CAPTION>
(Exact names of Registrants as specified (State or other jurisdiction (I.R.S. Employer
in their charters) of incorporation) Identification Number)
<S> <C> <C>
</TABLE>
777 MAIN STREET, SUITE 2500
FORT WORTH, TEXAS 76102
817/338-4043
(Address, including zip code, and telephone number, including area code,
of Registrants' principal executive offices)
---------------------------------------------
<TABLE>
<C> <C>
PETER E. LORENZEN COPIES TO:
SNYDER OIL CORPORATION THOMAS W. BRIGGS
777 MAIN STREET, SUITE 2500 KELLY, HART & HALLMAN, P.C.
FORT WORTH, TEXAS 76102 201 MAIN STREET
817/882-5905 FORT WORTH, TEXAS 76102
817/878-3521
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
</TABLE>
---------------------------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
by the Registrant.
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 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
================================================================================
<TABLE>
<S> <C> <C> <C> <C>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT PRICE(1) REGISTRATION FEE
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Guarantees (2) (3) $250,000,000 $75,758(4)
==================================================================================================================
</TABLE>
(Footnotes on next page)
---------------------------------------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
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 Commission, acting pursuant to Section 8(a) may
determine.
- --------------------------------------------------------------------------------
<PAGE> 2
(1) In no event will the aggregate maximum offering price of all securities
issued under this Registration Statement, as may be offered from time to
time, exceed $250,000,000.
(2) Each of the Registrants is a direct or indirect wholly owned subsidiary of
Snyder Oil Corporation. Subject to footnote (1), each of the Debt Securities
issued or issuable by Snyder Oil Corporation under Registration Statement
No. 33-54809 may be accompanied by Guarantees issued by any or all of the
Registrants hereunder.
(3) The proposed maximum offering price per unit will be determined from time to
time by the Registrants in connection with the issuance by the Registrants
of the securities issued hereunder.
(4) Previously paid with Registration Statement No. 33-54809 filed by Snyder Oil
Corporation. A registration fee of $86,207 was paid in connection with
Registration Statement No. 33-54809. Pursuant to Rule 429, the Prospectus
included herein also relates to the Securities registered on Registration
Statement No. 33-54809 and, pursuant to Rule 457(n), no additional
registration fee is payable in connection herewith.
<PAGE> 3
EXPLANATORY NOTE
Pursuant to Rule 429, the Prospectus included herein also relates to
$250,000,000 of Debt Securities, Debt Warrants, Preferred Stock, Depositary
Shares, Preferred Stock Warrants, Common Stock and Common Stock Warrants
registered under Registration Statement No. 33-54809.
<PAGE> 4
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 16, 1997
SNYDER OIL CORPORATION
DEBT SECURITIES
PREFERRED STOCK, DEPOSITARY SHARES
COMMON STOCK
WARRANTS
Snyder Oil Corporation (the "Company") may offer from time to time (i) Debt
Securities ("Debt Securities"), which may be either senior debt securities
("Senior Securities") or subordinated debt securities ("Subordinated
Securities"), consisting of debentures, notes or other unsecured evidences of
indebtedness in one or more series; (ii) unconditional guarantees (the
"Subsidiary Guarantees") of Debt Securities by certain subsidiaries (the
"Subsidiary Guarantors") of the Company; (iii) shares of Preferred Stock, par
value $.01 per share ("Preferred Stock"), in one or more series, and depositary
shares ("Depositary Shares") representing a fractional interest in a share of
Preferred Stock; (iv) shares of Common Stock, par value $.01 per share ("Common
Stock"); or (v) Warrants ("Warrants") to purchase Debt Securities, Preferred
Stock, Depositary Shares or Common Stock (Debt Securities, Preferred Stock,
Depositary Shares, Common Stock and Warrants are hereafter collectively called
"Securities") at an aggregate initial offering price not to exceed
US$250,000,000 at prices and on terms to be determined at the time of sale.
All specified terms of the offering and sale of the Securities will be set
forth in one or more supplements to this Prospectus ("Prospectus Supplement"),
including (i) in the case of Debt Securities, the title, aggregate principal
amount, whether such Debt Securities are senior or subordinate, denominations,
maturity, rate, if any, of interest (which may be fixed or variable) or method
of calculation thereof, and time of payment of any interest, any terms for
redemption at the option of the Company or the holder, any terms for sinking
fund payments, any conversion or exchange rights, any listing on a securities
exchange, applicability and terms of any Subsidiary Guarantees and the initial
public offering price and any other terms in connection with the offering and
sale of such Debt Securities; (ii) in the case of Preferred Stock and Depositary
Shares, the designation, number of shares, stated value and liquidation
preference per share, initial public offering price, dividend rate (or method of
calculation), dates on which dividends will be payable and dates from which
interest will accrue, voting rights, any redemption or sinking fund provisions,
any conversion or exchange rights, whether the Company has elected to offer the
Preferred Stock in the form of Depositary Shares, any listing of the Preferred
Stock on a securities exchange, and any other terms in connection with the
offering and sale of such Preferred Stock; (iii) in the case of Common Stock,
the number of shares of Common Stock and the terms of the offering thereof; and
(iv) in the case of Warrants, the number and terms thereof, the designation and
the number of Securities issuable upon their exercise, the exercise price, any
listing of the Warrants or the underlying Securities on a securities exchange
and any other terms in connection with the offering, sale and exercise of the
Warrants. The Senior Securities will rank equally with all other unsecured
Senior Indebtedness (as defined) of the Company. The Subordinated Securities
will be subordinated to all existing and future Senior Indebtedness (as defined)
of the Company.
The Company's Common Stock is listed on the New York Stock Exchange (Symbol
"SNY"). Any Common Stock offered will be listed, subject to notice of issuance,
on such exchange. The Company also has listed on the New York Stock Exchange
Depositary Shares representing a one-quarter interest in the Company's $6.00
Convertible Exchangeable Preferred Stock (Symbol "SNY Pr A") and 7% Convertible
Subordinated Notes due 2001 (Symbol "SNY RA").
The Company may sell Securities to or through underwriters, and also may
sell Securities directly to other purchasers or through agents. The Prospectus
Supplement will set forth the names of any underwriters or agents involved in
the sale of the Securities in respect of which this Prospectus is being
delivered, the amounts, if any, to be purchased by underwriters and the
compensation, if any, of such underwriters or agents. See "Plan of Distribution"
herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May , 1997
<PAGE> 5
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
IN THE PROSPECTUS SUPPLEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER, AGENT OR DEALER. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS IS DELIVERED OR AN OFFER OF ANY
SECURITIES IN ANY JURISDICTION TO ANY PERSON WHERE SUCH AN OFFER WOULD BE
UNLAWFUL.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the 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"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at its principal offices located at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its
regional offices located at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York,
New York 10048. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and may also be accessed electronically by means of the
Commission's home page on the World Wide Web at "http://www.sec.gov." In
addition, such reports and proxy statements can be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the Securities offered
hereby, reference is made to the Registration Statement and related exhibits.
Statements contained in this Prospectus concerning the contents of any contract,
agreement or other document filed as an exhibit to the Registration Statement
are not necessarily complete. In each instance, reference is made to the copy of
the contract, agreement or other document filed as an exhibit to the
Registration Statement for a more complete description of the matter involved,
and each such statement is qualified in all respects by such reference. Copies
of the Registration Statement may be obtained upon payment of the prescribed
fees at the offices of the Commission set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference: (a) Annual
Report on Form 10-K for the year ended December 31, 1996, as amended; (b)
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1997; and
(c) Current Report on form 8-K dated April 24, 1997. All documents filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of filing of such documents.
Any statement contained herein or in a document all or a portion of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in the Prospectus
Supplement 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 will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any of the documents incorporated by reference
herein, except for the exhibits to such documents (unless such exhibits are
2
<PAGE> 6
specifically incorporated by reference into such documents). Requests should be
directed to Snyder Oil Corporation, Attention: Investor Relations, 777 Main
Street, Fort Worth, Texas 76102, 817/882-5903.
THE COMPANY
Snyder Oil Corporation is an independent energy company engaged in oil and
gas development, acquisition, exploration and production activities primarily in
the Gulf of Mexico, western Rocky Mountains and North Louisiana. The Company
also gathers, transports and markets natural gas near its principal producing
properties. In addition, through its affiliates, the Company participates in
international exploration in international exploration and production.
The Company's principal executive office is located at 777 Main Street,
Fort Worth, Texas 76102, and its telephone number is 817/338-4043.
USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus Supplement,
the net proceeds from any sale of Securities will be used for general corporate
purposes, which may include refinancing of indebtedness, acquisitions, working
capital, capital expenditures and repurchases and redemptions of securities.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges and the ratio of earnings to
combined fixed charges and preferred stock dividends for the Company and its
subsidiaries for the periods indicated below was:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS
--------------------------------------- ENDED MARCH 31,
1992 1993 1994 1995 1996 1997
----- ---- ---- ------ ---- ---------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges........................... 4.0x 5.2x 2.3x N/A(1) 3.9x 5.3x
Ratio of earnings to combined fixed
charges and preferred stock
dividends......................... 2.0x 1.9x 1.1x N/A(2) 3.1x 4.0x
</TABLE>
- ---------------
(1) Earnings were inadequate to cover fixed charges by $40.6 million.
(2) Earnings were inadequate to cover combined fixed charges and preferred
dividends by $46.8 million.
For the purposes of calculating the above ratios, earnings are net income
(loss) before income taxes, minority interest, extraordinary item and interest
expense. Fixed charges consist of interest expense and preferred stock dividends
of consolidated subsidiary. Preferred stock dividends represent an amount equal
to income, before income tax, which would be required to meet the dividends on
the Company's preferred stock.
3
<PAGE> 7
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate ("Offered Debt Securities"). The particular terms of the Offered Debt
Securities and the extent to which such general provisions may apply will be
described in a Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities will be general unsecured obligations of the Company
and will constitute either senior debt securities or subordinated debt
securities. Debt Securities that will be senior debt securities ("Senior Debt
Securities") will be issued under an Indenture (the "Senior Indenture") between
the Company and a trustee, the form of which is filed as an exhibit to the
Registration Statement. Debt Securities that will be subordinated debt
securities ("Subordinated Debt Securities") will be issued under an Indenture
(the "Subordinated Indenture" and, collectively with the Senior Indenture, the
"Indentures") between the Company and a trustee (collectively with the trustee
under the Senior Indenture, the "Trustee"), the form of which is filed as an
exhibit to the Registration Statement. The statements under this caption
relating to the Debt Securities and the Indentures are summaries only and do not
purport to be complete. Such summaries make use of terms defined in the
Indentures. Wherever such terms are used herein or particular provisions of the
Indentures are referred to, such terms or provisions, as the case may be, are
incorporated by reference as part of the statements made herein, and such
statements are qualified in their entirety by such reference. Certain defined
terms in the Indentures are capitalized herein. The italicized references below
apply to the section numbers in each of the Indentures, unless otherwise
indicated.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which can be issued thereunder and provide that Debt Securities may
be issued from time to time thereunder in one or more series, each in an
aggregate principal amount authorized by the Company prior to issuance. The
Indentures do not limit the amount of other unsecured indebtedness or securities
which may be issued by the Company.
Unless otherwise indicated in a Prospectus Supplement, the Debt Securities
will not benefit from any covenant or other provision that would afford Holders
of such Debt Securities special protection in the event of a highly leveraged
transaction involving the Company.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (a) the title and aggregate principal amount of the
Offered Debt Securities; (b) the date or dates on which the Offered Debt
Securities will mature; (c) the rate or rates (which may be fixed or variable)
per annum, if any, at which the Offered Debt Securities will bear interest or
the method of determining such rate or rates; (d) the date or dates from which
such interest, if any, will accrue and the date or dates at which such interest,
if any, will be payable; (e) the terms for redemption or early payment, if any,
including any mandatory or optional sinking fund or analogous provision; (f) the
terms for conversion or exchange, if any, of the Offered Debt Securities; (g)
the classification as Senior Debt Securities or Subordinated Debt Securities;
(h) whether such Offered Debt Securities will be issued in fully registered form
or in bearer form or any combination thereof; (i) whether such Offered Debt
Securities will be issued in the form of one or more global securities and
whether such global securities are to be issuable in temporary global form or
permanent global form; (j) if other than U.S. dollars, the currency, currencies
or currency unit or units in which such Offered Debt Securities will be
denominated and in which the principal of and premium and interest, if any, on
such Offered Debt Securities will be payable; (k) whether, and the terms and
conditions on which, the Company or a Holder may elect that, or the other
circumstances under which, payment of principal of or premium or interest, if
any, on such Offered Debt Securities is to be made in a currency or currencies
or currency unit or units other than that in which such Offered Debt Securities
are denominated; (l) information with respect to book-entry procedures, if any;
(m) whether the Offered Debt Securities are guaranteed by Subsidiary Guarantees
and (n) any other specific terms of the Offered Debt Securities. Reference is
also made to the Prospectus Supplement for information with respect to any
additional covenants that may be included in the terms of the Offered Debt
Securities. (Section 301)
4
<PAGE> 8
No service charge will be made for any registration of transfer or exchange
of the Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Section 305)
Offered Debt Securities may be sold at a discount (which may be
substantial) below their stated principal amount bearing no interest or interest
at a rate which at the time of issuance is below market rates. Any material
United States federal income tax consequences and other special considerations
applicable thereto will be described in the Prospectus Supplement relating to
any such Offered Debt Securities.
If any of the Offered Debt Securities are sold for any foreign currency or
currency unit or if the principal of or premium or interest, if any, on any of
the Offered Debt Securities is payable in any foreign currency or currency unit,
the restrictions, elections, tax consequences, specific terms and other
information with respect to such Offered Debt Securities and such foreign
currency or currency unit will be set forth in the Prospectus Supplement
relating thereto.
SUBSIDIARY GUARANTEES
The Offered Debt Securities may be unconditionally guaranteed by Subsidiary
Guarantees of the Subsidiary Guarantors, on a senior or subordinated basis,
which will guarantee the due and punctual payment of principal of, premium, if
any, and interest on such Offered Debt Securities when and as the same shall
become due and payable whether at a maturity date, by declaration of
acceleration, call for redemption or otherwise. The applicability and terms of
any such Subsidiary Guarantee relating to a series of Offered Debt Securities
will be set forth in the Prospectus Supplement relating to such Offered Debt
Securities.
EVENTS OF DEFAULT
Unless otherwise provided with respect to any series of Debt Securities,
the following are Events of Default under each Indenture with respect to the
Debt Securities of such series issued under such Indenture: (a) failure to pay
principal of or premium, if any, on any Debt Securities of such series when due;
(b) failure to pay interest, if any, on any Debt Security of such series when
due, continued for 30 days; (c) failure to deposit any mandatory sinking fund
payment, when due, in respect of the Debt Securities of such series, continued
for 60 days; (d) failure to perform any other covenant of the Company in the
applicable Indenture (other than a covenant included in the applicable Indenture
for the benefit of a series of Debt Securities other than such series),
continued for 90 days after written notice as provided in the applicable
Indenture; (e) certain events of bankruptcy, insolvency or reorganization; and
(f) any other Event of Default as may be specified with respect to Debt
Securities of such series. (Section 501) If an Event of Default with respect to
any outstanding series of Debt Securities occurs and is continuing, either the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Debt Securities of such series (in the case of an Event of Default described in
clause (a), (b), (c) or (f) above) or at least 25% in principal amount of all
outstanding Debt Securities under the applicable Indenture (in the case of other
Events of Default) may declare the principal amount of all the Debt Securities
of the applicable series (or of all outstanding Debt Securities under the
applicable Indenture, as the case may be) to be due and payable immediately. At
any time after a declaration of acceleration has been made, but before a
judgment has been obtained, the Holders of a majority in principal amount of the
outstanding Debt Securities of such series (or of all outstanding Debt
Securities under the applicable Indenture, as the case may be) may, under
certain circumstances, rescind and annul such acceleration. (Section 502)
Depending on the terms of other indebtedness of the Company outstanding from
time to time, an Event of Default under an Indenture may give rise to cross
defaults on such other indebtedness of the Company.
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, give to the
Holders of the Debt Securities of such series notice of all uncured and unwaived
defaults known to it; provided, however, that except in the case of a default in
the payment of the principal of or premium or interest, if any, on, or any
sinking fund installment with respect to, any Debt Securities of such series,
the Trustee will be protected in withholding such notice if it in good faith
determines
5
<PAGE> 9
that the withholding of such notice is in the interest of the Holders of the
Debt Securities of such series; and provided further, however, that such notice
shall not be given until at least 60 days after the occurrence of a default in
the performance, or breach, of any covenant or warranty of the Company under
such Indenture other than for the payment of the principal of or premium or
interest, if any, on, or any sinking fund installment with respect to, any Debt
Securities of such series. For the purpose of this provision, "default" with
respect to Debt Securities of any series means any event which is, or after
notice or lapse of time, or both, would become, an Event of Default with respect
to the Debt Securities of such series. (Section 602)
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) have the right, subject to certain limitations,
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series (or of all
outstanding Debt Securities under the applicable Indenture). (Section 512) Each
Indenture provides that in case an Event of Default shall occur and be
continuing, the Trustee shall exercise such of its rights and powers under the
applicable Indenture and use the same degree of care and skill in their exercise
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs. (Section 601) Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under either
Indenture at the request of any of the Holders of the Debt Securities unless
they shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request. (Section 603)
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) may on behalf of the Holders of all Debt
Securities of such series (or of all outstanding Debt Securities under the
applicable Indenture) waive any past default under the applicable Indenture,
except a default in the payment of the principal of or premium or interest, if
any, on any Debt Security or in respect of a provision which under the
applicable Indenture cannot be modified or amended without the consent of the
Holder of each outstanding Debt Security affected. (Section 513) The Holders of
a majority in principal amount of the outstanding Debt Securities affected
thereby may on behalf of the Holders of all such Debt Securities waive
compliance by the Company with certain restrictive provisions of the Indentures.
(Section 1009)
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under each
Indenture and as to any default in such performance. (Section 1008)
MODIFICATION
Modifications and amendments of each Indenture may be made by the Company
and the Trustee with the consent of the Holders of a majority in principal
amount of the outstanding Debt Securities under the applicable Indenture
affected thereby; provided, however, that no such modification or amendment may,
without the consent of the Holder of each outstanding Debt Security affected
thereby, (a) change the stated maturity date of the principal of or any
installment of interest, if any, on any Debt Security, (b) reduce the principal
amount of or the premium or interest, if any, on any Debt Security, (c) change
the place or currency, currencies, or currency unit or units or payment of
principal of or premium or interest, if any, on any Debt Security, (d) impair
the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security or (e) reduce the percentage in principal amount of
outstanding Debt Securities the consent of whose Holders is required for
modification or amendment of the Indentures or for waiver of compliance with
certain provisions of the Indentures or for waiver of certain defaults. (Section
902)
Each Indenture provides that the Company and the Trustee may, without the
consent of any Holders of Debt Securities, enter into supplemental indentures
for the purposes, among other things, of adding to the Company's covenants,
adding additional Events of Default, establishing the form or terms of Debt
Securities or curing ambiguities or inconsistencies in the applicable Indenture,
provided such action to cure ambiguities or inconsistencies shall not adversely
affect the interests of the Holders of the Debt Securities in any material
respect.
6
<PAGE> 10
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of outstanding Debt
Securities, may consolidate with or merge into, or convey, transfer or lease its
assets substantially as an entirety to any Person, provided that the Person
formed by such consolidation or into which the Company is merged or which
acquires or leases the assets of the Company substantially as an entirety is a
corporation, partnership or trust organized under the laws of any United States
jurisdiction and assumes by supplemental indenture the Company's obligations on
the Debt Securities and under the Indentures, that after giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing, and that certain other conditions are met. Upon compliance with
these provisions by a successor Person, the Company will (except in the case of
a lease) be relieved of its obligations under the Indentures and the Debt
Securities. (Article Eight)
DISCHARGE AND DEFEASANCE
The Company may terminate its obligations under each Indenture, other than
its obligations to pay the principal of and premium and interest, if any, on the
Debt Securities of any series and certain other obligations, if it (a)
irrevocably deposits or causes to be irrevocably deposited with the Trustee as
trust funds money or U.S. Government Obligations maturing as to principal and
interest sufficient to pay the principal of, any interest on, and any mandatory
sinking funds in respect of, all outstanding Debt Securities of such series on
the stated maturity of such payments or on any redemption date and (b) complies
with any additional conditions specified to be applicable with respect to the
covenant defeasance of Debt Securities of such series. (Section 401)
The terms of any series of Debt Securities may also provide for legal
defeasance pursuant to each Indenture. In such case, if the Company (a)
irrevocably deposits or causes to be irrevocably deposited money or U.S.
Government Obligations as described above, (b) makes a request to the Trustee to
be discharged from its obligations on the Debt Securities of such series and (c)
complies with any additional conditions specified to be applicable with respect
to legal defeasance of Securities of such series, then the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
outstanding Debt Securities of such series and the obligations of the Company
under the applicable Indenture and the Debt Securities of such series to pay the
principal of and premium and interest, if any, on the Debt Securities of such
series shall cease, terminate and be completely discharged, and the Holders
thereof shall thereafter be entitled only to payment out of the money or U.S.
Government Obligations deposited with the Trustee as aforesaid, unless the
Company's obligations are revived and reinstated because the Trustee is unable
to apply such trust fund by reason of any legal proceeding, order or judgment.
(Sections 403 and 404)
The term "U.S. Government Obligations" is defined in each Indenture as
direct noncallable obligations of, or noncallable obligations the payment of
principal of and interest on which is guaranteed by, the United States of
America, or to the payment of which obligations or guarantees the full faith and
credit of the United States of America is pledged, or beneficial interests in a
trust the corpus of which consists exclusively of money or such obligations or a
combination thereof.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities are issuable in definitive form as Registered Debt
Securities, as Bearer Debt Securities or both. Unless otherwise indicated in an
applicable Prospectus Supplement, Bearer Debt Securities will have interest
coupons attached. Debt Securities are also issuable in temporary or permanent
global form. (Section 301) See "Global Securities."
Registered Debt Securities of any series will be exchangeable for other
Registered Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, with
respect to any series of Bearer Debt Securities, at the option of the Holder,
subject to the terms of the applicable Indenture, Bearer Debt Securities (with
all unmatured coupons, except as provided below, and all matured coupons in
default) of such series will be exchangeable into Registered Securities of the
same series of any authorized denominations and of a like aggregate principal
amount and tenor. Bearer Debt
7
<PAGE> 11
Securities surrendered in exchange for Registered Debt Securities between a
Regular Record Date or a Special Record Date and the relevant date for payment
of interest shall be surrendered without the coupon relating to such date for
payment of interest, and interest accrued as of such date will not be payable in
respect of the Registered Debt Security issued in exchange for such Bearer Debt
Security, but will be payable only to the Holder of such coupon when due in
accordance with the terms of the applicable Indenture. (Section 305)
In connection with its sale during the restricted period (as defined
below), no Bearer Debt Security (including a Debt Security in permanent global
form that is either a Bearer Debt Security or exchangeable for Bearer Debt
Securities) shall be mailed or otherwise delivered to any location in the United
States (as defined under "-- Limitations on Issuance of Bearer Debt Securities")
and a Bearer Debt Security may be delivered outside the United States in
definitive form in connection with its original issuance only if prior to
delivery the Person entitled to receive such Bearer Debt Security furnishes
written certification, in the form required by the applicable Indenture, to the
effect that such Bearer Debt Security is owned by: (a) a Person (purchasing for
its own account) who is not a United States Person (as defined under
"-- Limitations on Issuance of Bearer Debt Securities"); (b) a United States
Person who (i) is a foreign branch of a United States financial institution
purchasing for its own account or for resale or (ii) acquired such Bearer Debt
Security through the foreign branch of a United States financial institution and
who for purposes of the certification holds such Bearer Debt Security through
such financial institution on the date of certification and, in either case,
such United States financial institution certifies to the Company or the
distributor selling the Bearer Debt Security within a reasonable time stating
that it agrees to comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations thereunder, or (c) a United States or foreign financial
institution for purposes of resale within the "restricted period" as defined in
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7). A financial
institution described in clause (c) of the preceding sentence (whether or not
also described in clauses (a) and (b)) must certify that it has not acquired the
Bearer Debt Security for purpose of resale, directly or indirectly, to a United
States Person or to a Person within the United States or its possessions. In the
case of a Bearer Debt Security in permanent global form, such certification must
be given in connection with notation of a beneficial owner's interest therein in
connection with the original issuance of such Debt Security or upon exchange of
a portion of a temporary global Security. (Section 303) See "-- Limitations on
Issuance of Bearer Debt Securities" and "Global Securities."
Debt Securities may be presented for exchange as provided above, and
Registered Debt Securities may be presented for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without service charge and
upon payment of any taxes and other governmental charges as described in the
applicable Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the Person making the request. The
Company has appointed the Trustee as Security Registrar. (Section 305) If a
Prospectus Supplement refers to any transfer agents (in addition to the Security
Registrar) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
solely as Registered Debt Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt Securities
of a series are issuable as Bearer Debt Securities, the Company will be required
to maintain (in addition to the Security Registrar) a transfer agent in a Place
of Payment for such series located outside the United States. The Company may at
any time designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002)
In the event of any redemption in part, the Company shall not be required
to (a) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on (i) if Debt Securities of the series are issuable only as
Registered Debt Securities, the day of mailing of the relevant notice of
redemption and (ii) if Debt Securities of the series are issuable as Bearer
8
<PAGE> 12
Debt Securities, the day of the first publication of the relevant notice of
redemption or, if Debt Securities of the series are also issuable as Registered
Debt Securities and there is no publication, the day of mailing of the relevant
notice of redemption; (b) register the transfer of or exchange any Registered
Debt Security, or portion thereof, called for redemption, except the unredeemed
portion of any Registered Debt Security being redeemed in part; or (c) exchange
any Bearer Debt Security called for redemption, except to exchange such Bearer
Debt Security for a Registered Debt Security of that series and like tenor which
is simultaneously surrendered for redemption. (Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium and interest, if any, on Bearer Debt Securities will
be payable, subject to any applicable laws and regulations, in the designated
currency or currency unit, at the offices of such Paying Agents outside the
United States as the Company may designate from time to time, at the option of
the Holder, by check or by transfer to an account maintained by the payee with a
bank located outside the United States; provided, however, that the written
certification described above under "-- Form, Exchange, Registration and
Transfer" has been delivered prior to the first actual payment of interest.
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Debt Securities on any Interest Payment Date will be made
only against surrender to the Paying Agent of the coupon relating to such
Interest Payment Date. (Section 1001) No payment with respect to any Bearer Debt
Security will be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
any account maintained with a bank located in the United States, nor shall any
payments be made in respect of Bearer Debt Securities upon presentation to the
Company or its designated Paying Agents within the United States.
Notwithstanding the foregoing, payments of principal of and premium and
interest, if any, on Bearer Debt Securities denominated and payable in U.S.
dollars will be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment of the full amount
thereof in U.S. dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium and interest, if any, on Registered Debt Securities
will be made in the designated currency or currency unit at the office of such
Paying Agent or Paying Agents as the Company may designate from time to time,
except that at the option of the Company payment of any interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on Registered Debt
Securities will be made to the Person in whose name such Registered Debt
Security is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York will be designated as a Paying Agent for the Company for payments with
respect to Debt Securities which are issuable solely as Registered Debt
Securities, and the Company will maintain a Paying Agent outside the United
States for payments with respect to Debt Securities (subject to limitations
described above in the case of Bearer Debt Securities) which are issuable solely
as Bearer Debt Securities, or as both Registered Debt Securities and Bearer Debt
Securities. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Debt
Securities will be named in an applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that, if Debt Securities of a series are issuable solely as
Registered Debt Securities, the Company will be required to maintain a Paying
Agent in each Place of Payment for such series and, if Debt Securities of a
series are issuable as Bearer Debt Securities, the Company will be required to
maintain (a) a Paying Agent in the Borough of Manhattan, The City of New York
for principal payments with respect to any Registered Debt Securities of the
series (and for payments with respect to Bearer Debt Securities of the series in
the circumstances described above, but not otherwise), and (b) a Paying Agent in
a Place of Payment located
9
<PAGE> 13
outside the United States where Debt Securities of such series and any coupons
appertaining thereto may be presented and surrendered for payment; provided,
however, that if the Debt Securities of such series are listed on the
International Stock Exchange of the United Kingdom and the Republic of Ireland
Limited, the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the Company
will maintain a Paying Agent in London, Luxembourg or any other required city
located outside the United States, as the case may be, for the Debt Securities
of such series. (Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed at the end of three years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company and the Holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof. (Section 1003)
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Debt Securities (including securities in permanent global form that are either
Bearer Debt Securities or exchangeable for Bearer Debt Securities) will not be
offered or sold during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)) (generally, the first 40
days after the closing date, and, with respect to unsold allotments, until sold)
within the United States or to United States Persons (each as defined below)
other than to an office located outside the United States of a United States
financial institution (as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury Regulations), purchasing for its own account or for resale or
for the account of certain customers, that provides a certificate stating that
it agrees to comply with the requirements of Section 165(j)(3)(A),(B) or (C) of
the Code and the United States Treasury Regulations thereunder, or to certain
other Persons described in Section 1.163-5(c)(2)(i)(D)(1)(iii)(B) of the United
States Treasury Regulations. Moreover, such Bearer Debt Securities will not be
delivered in connection with their sale during the restricted period within the
United States. Any underwriters, agents and dealers participating in the
offering of Bearer Debt Securities must covenant that they will not offer or
sell during the restricted period any Bearer Debt Securities within the United
States or to United States Persons (other than the persons described above) or
deliver in connection with the sale of Bearer Debt Securities during the
restricted period any Bearer Debt Securities within the United States and that
they have in effect procedures reasonably designed to ensure that their
employees and agents who are directly engaged in selling the Bearer Debt
Securities are aware of the restrictions described above. No Bearer Debt
Security (other than a temporary global Bearer Debt Security) will be delivered
in connection with its original issuance nor will interest be paid on any Bearer
Debt Security until receipt by the Company of the written certification
described above under "--Form, Exchange, Registration and Transfer." Each Bearer
Debt Security, other than a temporary global Bearer Debt Security, will bear a
legend to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
United States Holders of Bearer Debt Securities generally will not be
entitled to deduct any loss sustained on Bearer Debt Securities (other than
Bearer Debt Securities having a maturity of one year or less from the date of
issue).
As used herein, "United States Person" means any citizen or resident of the
Untied States, any corporation, partnership or other entity created or organized
in or under the laws of the United States and any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, and "United States" means the United States of America (including the
states and the District of Columbia) and its possessions.
10
<PAGE> 14
MEETINGS
The Indentures contain provisions for convening meetings of the Holders of
Debt Securities of a series. (Section 1301) A meeting may be called at any time
by the Trustee, and also, upon request, by the Company or the Holders of at
least 10% in principal amount of the Outstanding Debt Securities of such series,
in any such case upon notice given as described under "-- Notices" below.
(Section 1302) Except for any consent that must be given by the Holder of each
Outstanding Debt Security affected thereby, as described under "-- Modification"
above, any resolution presented at a meeting or adjourned meeting at which a
quorum is present may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series;
provided, however, that, except for any consent that must be given by the Holder
of each Outstanding Debt Security affected thereby, as described under
"-- Modification" above, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that may be
made, given or taken by the Holders of a specified percentage, which is less
than a majority in principal amount of the Outstanding Debt Securities of a
series, may be adopted at a meeting or adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Debt Securities of
that series. Subject to the proviso set forth above, any resolution passed or
decision taken at any meeting of the Holders of Debt Securities of any series
duly held in accordance with the Indenture will be binding on all Holders of
Debt Securities of that series and any related coupons. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
Persons holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series. (Section 1304)
NOTICES
Except as otherwise provided in the Indentures, notices to Holders of
Bearer Debt Securities will be given by publication at least twice in a daily
newspaper in The City of New York and London or other capital city in Western
Europe and in such other city or cities as may be specified in such Securities.
Notices to Holders of Registered Debt Securities will be given by mail to the
addresses of such Holders as they appear in the Security Register. (Section 107)
THE TRUSTEE
Each Indenture contains certain limitations on the right of the Trustee, as
a creditor of the Company, to obtain payment of claims in certain cases and to
realize on certain property received with respect to any such claims, as
security or otherwise. (Section 613) The Trustee is permitted to engage in other
transactions, except that, if it acquires any conflicting interest (as defined),
it must eliminate such conflict or resign. (Section 608)
The Trustee has made loans to the Company and its subsidiaries and
affiliates from time to time in the ordinary course of business and at
prevailing interest rates under agreements with commercial bank groups. In
addition, the Trustee serves as a depositary of funds of, and performs other
services for, the Company and its trustee under two other indentures pursuant to
which several outstanding series of the Company's debentures have been issued.
SUBORDINATION
The payment of the principal of and premium, if any, and interest on the
Subordinated Debt Securities is, to the extent set forth in the Subordinated
Indenture, subordinated in right of payment to the prior payment in full of all
Senior Indebtedness, whether now outstanding or incurred in the future (Section
1301 of the Subordinated Indenture). Upon any payment or distribution of assets
of the Company to creditors upon any liquidation, dissolution, winding up,
assignment for the benefit of creditors or marshalling of assets and liabilities
or any bankruptcy, insolvency, receivership, liquidation, reorganization or
similar proceedings of the Company, the holders of all Senior Indebtedness will
first be entitled to receive any payment in full of all amounts due or to become
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment (other than any payment in the form of Permitted
Junior Securities) on account of the
11
<PAGE> 15
principal of or premium, if any, or interest on the Subordinated Debt Securities
(Section 1302 of the Subordinated Indenture).
No payment (other than any payment in the form of Permitted Junior
Securities) on account of principal of and premium, if any, or interest on the
Subordinated Debt Securities may be made if a Payment Event of Default shall
have occurred and be continuing. In addition, no payment (other than any payment
in the form of Permitted Junior Securities) on account of principal of or
premium, if any, or interest on the Subordinated Debt Securities may be made if
a Non-payment Event of Default shall have occurred and be continuing, for the
period (a "Payment Blockage Period") commencing on receipt of notice of such
event of default by the Trustee from holders of at least a majority in principal
amount of any Designated Senior Indebtedness (or any other trustee or other
representative therefor) and ending on the earlier of (i) the date such
Non-payment Event of Default has been cured or waived or has ceased to exist or
any acceleration of such Designated Senior Indebtedness has been rescinded or
annulled or such Designated Senior Indebtedness shall have been discharged and
(ii) the date 176 days after such receipt of notice. Any number of such notices
may be given; provided, however, that, during any 360-day period, the aggregate
Payment Blockage Periods shall not exceed 176 days and there shall be a period
of at least 184 consecutive days when no Payment Blockage Period is in effect.
No default existing or continuing when a Payment Blockage Period begins may be
the basis for any subsequent Payment Blockage Period unless such default has
been cured for a period of at least 90 consecutive days. In the event that,
notwithstanding the restrictions described in the preceding sentences, the
Company makes any payment to the Trustee or a Holder of Subordinated Debt
Securities prohibited by any such restriction, with such Trustee or Holder, as
the case may be, knowing of such contravention before receipt thereof, then such
payment will be required to be paid over and delivered forthwith to the Company
to the extent necessary to pay in full all such Senior Indebtedness (Section
1302 of the Subordinated Indenture).
The subordination rights of holders of Senior Indebtedness will not be
prejudiced or impaired by any acts or failures to act by the Company or by any
such holder (Section 1308 of the Subordinated Indenture). The subordination of
the Subordinated Debt Securities set forth above will not prevent the occurrence
of any Event of Default under the Subordinated Indenture. Furthermore, the
subordination of the Subordinated Debt Securities as set forth above will not
impair, as between the Company, the Holders of the Subordinated Debt Securities
and creditors of the Company other than holders of Senior Indebtedness, the
obligations of the Company to make payments on the Subordinated Debt Securities
in accordance with their terms. In certain circumstances, as set forth in the
Indenture, the Holders of Subordinated Debt Securities will be subrogated to
certain rights of the holders of Senior Indebtedness upon payment in full of all
Senior Indebtedness (Section 1302 of the Subordinated Indenture).
By reason of such subordination, in the event of insolvency of the Company,
the holders of Senior Indebtedness (as well as other creditors of the Company
who are holders of indebtedness that is not subordinated to the Senior
Indebtedness) may recover more, ratably, than the Holders of the Subordinated
Debt Securities.
The Subordinated Debt Securities will also be effectively subordinated to
all liabilities, including trade payables and capitalized lease obligations, if
any, of the Company's subsidiaries. Any right of the Company to receive the
assets of any of its subsidiaries upon their liquidation or reorganization (and
the consequent right of the Holders of the Subordinated Debt Securities to
participate in those assets) will be subject to the prior payment of claims of
that subsidiary's creditors (including trade creditors), except to the extent
that the Company is itself a creditor of such subsidiary, in which case the
claims of the Company would still be subject to the prior payment of claims
secured by security interests in the assets of such subsidiary and any other
indebtedness of such subsidiary senior to that held by the Company.
If Subordinated Debt Securities are issued under the Subordinated
Indenture, the aggregate principal amount of Senior Indebtedness outstanding as
of a recent date will be set forth in the Prospectus Supplement. The
Subordinated Indenture does not restrict the amount of Senior Indebtedness that
the Company may incur.
12
<PAGE> 16
CERTAIN DEFINITIONS
The term "Bank Credit Facility" is defined in the Indenture as the
Company's existing bank credit facility and any renewals, amendments,
extensions, supplements, modifications, refinancing or replacements thereof
(whether or not the principal amount outstanding thereunder shall be
increased)(Section 101 of the Subordinated Indenture).
The term "Designated Senior Indebtedness" is defined in the Subordinated
Indenture as (i) all Senior Indebtedness under the Bank Credit Facility if the
sum of the amounts outstanding under the Bank Credit Facility and the amounts
available for borrowing thereunder is equal to or greater than $25,000,000 and
(ii) all other Senior Indebtedness having an outstanding principal amount equal
to or greater than $25,000,000 (provided, however, that the agreements,
indentures or other instruments evidencing any Senior Indebtedness referred to
in this clause (ii) specifically state that such Senior Indebtedness shall be
classified as "Designated Senior Indebtedness" for purposes of the Subordinated
Indenture) (Section 101 of the Subordinated Indenture).
The term "Indebtedness," as applied to any Person, is defined in the
Subordinated Indenture as all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by such Person for the
repayment of money borrowed, and obligations, computed in accordance with
generally accepted accounting principles, as lessee under leases that should be,
in accordance with generally accepted accounting principles, treated as capital
leases. All Indebtedness secured by a lien upon property owned by the Company or
any Subsidiary and upon which Indebtedness such Person customarily pays
interest, although such Person has not assumed or become liable for the payment
of such Indebtedness, shall be deemed to be Indebtedness of such Person. All
Indebtedness of others guaranteed as to payment of principal by such Person or
in effect guaranteed by such Person through a contingent agreement to purchase
such Indebtedness shall also be deemed to be Indebtedness of such Person
(Section 101 of the Subordinated Indenture).
The term "Non-payment Event of Default" is defined in the Subordinated
Indenture as any event (other than a Payment Event of Default) the occurrence of
which entitles any one or more persons to accelerate the maturity of any
Designated Senior Indebtedness (Section 101 of the Subordinated Indenture).
The term "Payment Event of Default" is defined in the Subordinated
Indenture as any default in the payment of principal of or premium, if any, or
interest on any Designated Senior Indebtedness when due (whether at maturity,
upon acceleration or otherwise) (Section 101 of the Subordinated Indenture).
The term "Permitted Junior Securities" is defined in the Subordinated
Indenture as subordinated debt securities of the Company (or any successor
obligor with respect to the Senior Indebtedness) provided for by a plan of
reorganization or readjustment that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding to substantially the same extent as,
or to a greater extent than, the Subordinated Debt Securities are subordinated
as provided in the Subordinated Indenture (Section 101 of the Subordinated
Indenture).
The term "Senior Indebtedness" is defined in the Subordinated Indenture as
all obligations of the Company under the Bank Credit Facility and (b) all other
Indebtedness of the Company, whether currently outstanding or hereafter issued;
provided that "Senior Indebtedness" shall not include (i) the Company's 7%
Convertible Subordinated Notes due 2001, (ii) the Company's 6% Convertible
Subordinated Debentures, if and when issued, for which the Company's existing
preferred stock is exchangeable, (iii) any obligation owed to a Subsidiary or an
Affiliate of the Company, (iv) any obligation that by the terms of the
instrument creating or evidencing the same is not superior in right of payment
to the Subordinated Debt Securities, and (v) any obligation constituting a trade
account payable (Section 101 of the Subordinated Indenture).
The term "Subsidiary" is defined in the Indenture as a corporation more
than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency (Section 101).
13
<PAGE> 17
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock to which any Prospectus Supplement may relate. The
particular terms of any series of Preferred Stock to be issued hereby will be
described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Company's preferred stock (including the
Preferred Stock) contained in this Prospectus does not purport to be complete
and is subject to, and qualified in its entirety by, the provisions of the
Company's Certificate of Incorporation and the certificate of designations
relating to each series of preferred stock, including the Preferred Stock
("Certificate of Designations"), which will be filed as an exhibit to or
incorporated by reference in the Registration Statement of which this Prospectus
is a part at or prior to the time of issuance of such series of the Preferred
Stock.
The Company's Certificate of Incorporation authorizes the issuance of
10,000,000 shares of preferred stock, par value of $.01 per share. On March 31,
1997, 1,033,500 shares of preferred stock were outstanding. Preferred stock may
be issued from time to time in one or more classes or series with such rights
and preferences, including voting, dividend and conversion rights and other
terms, as the Board of Directors may establish without any further authorization
by the stockholders.
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. The
applicable Prospectus Supplement will describe the following terms of the series
of Preferred Stock in respect of which this Prospectus is being delivered: (1)
the designation and stated value per share of such Preferred Stock and the
number of shares offered; (2) the amount of liquidation preference per share;
(3) the initial public offering price at which such Preferred Stock will be
issued; (4) the dividend rate (or method of calculation), the dates on which
dividends shall be payable and the dates from which dividends shall commence to
cumulate, if any; (5) any redemption or sinking fund provisions; (6) any
conversion or exchange rights; (7) whether the Company has elected to offer
Depositary Shares as described below under "Description of Depositary Shares";
and (8) any additional voting, dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and restrictions.
GENERAL
The Preferred Stock offered hereby will be issued in one or more series.
The holders of Preferred Stock will have no preemptive rights. Preferred Stock,
upon issuance against full payment of the purchase price therefor, will be fully
paid and nonassessable. Neither the par value nor the liquidation preference is
indicative of the price at which the Preferred Stock will actually trade on or
after the date of issuance. The applicable Prospectus Supplement will contain a
description of certain United States federal income tax consequences relating to
the purchase and ownership of the series of Preferred Stock offered by such
Prospectus Supplement.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer Depositary Shares evidenced by depositary receipts
("Depositary Receipts"), each representing a fractional interest (to be
specified in the Prospectus Supplement relating to the particular series of the
Preferred Stock) in a share of the particular series of the Preferred Stock
issued and deposited with a Depositary (as defined below).
RANK
The Preferred Stock shall, with respect to dividend rights and rights on
liquidation, winding up and dissolution of the Company, rank prior to the
Company's Common Stock and to all other classes and series of equity securities
of the Company now or hereinafter authorized, issued or outstanding (the Common
Stock and such other classes and series of equity securities collectively may be
referred to herein as the "Junior Stock"), other than any classes or series of
equity securities of the Company ranking on a parity with (the "Parity Stock")
or senior to (the "Senior Stock") the Preferred Stock as to dividend rights and
rights upon
14
<PAGE> 18
liquidation, winding up or dissolution of the Company. The Preferred Stock will
be junior to all outstanding debt of the Company. The Preferred Stock will be
subject to creation of Senior Stock, Parity Stock and Junior Stock to the extent
not expressly prohibited by the Company's Certification of Incorporation.
DIVIDENDS
Holders of shares of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors out of funds of the Company legally
available for payment, cash dividends, payable at such dates and at such rates
per share per annum as set forth in the applicable Prospectus Supplement. Such
rate may be fixed or variable or both. Each declared dividend will be payable to
holders of record as they appear at the close of business on the stock books of
the Company (or, if applicable, on the records of the Depositary) on such record
dates, not more than 60 calendar days preceding the payment dates therefor, as
are determined by the Board of Directors (each of such dates, a "Record Date").
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement. If dividends on a series of Preferred Stock are
noncumulative and if the Board of Directors fails to declare a dividend in
respect of a dividend period with respect to such series, then holders of such
Preferred Stock will have no right to receive a dividend in respect of such
dividend period, and the Company will have no obligation to pay the dividends
for such period, whether or not dividends are declared payable on any future
Dividend Payment Dates. Dividends on the shares of each series of Preferred
Stock for which dividends are cumulative will accrue from the date on which the
Company initially issues shares of such series.
No full dividends shall be declared or paid or set apart for payment on
preferred stock of the Company of any series ranking, as to dividends, on a
parity with or junior to the series of Preferred Stock offered by the applicable
Prospectus Supplement for any period unless full dividends for the immediately
preceding dividend period on such Preferred Stock (including any accumulation in
respect of unpaid dividends for prior dividend periods, if dividends on such
Preferred Stock are cumulative) have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof is set apart for
such payment. When dividends are not so paid in full (or a sum sufficient for
such full payment is not so set apart) upon such Preferred Stock and any other
preferred stock of the Company ranking on a parity as to dividends with the
Preferred Stock, dividends upon shares of such Preferred Stock and dividends on
such other preferred stock shall be declared pro rata so that the amount of
dividends declared per share on such Preferred Stock and such other preferred
stock shall in all cases bear to each other the same ratio that accrued
dividends for the then-current dividend period per share on the shares of such
Preferred Stock (including any accumulation in respect of unpaid dividends for
prior dividend periods, if dividends on such Preferred Stock are cumulative) and
accrued dividends, including required or permitted accumulations, if any, on
shares of such other preferred stock, bear to each other. Unless full dividends
on the series of Preferred Stock offered by the applicable Prospectus Supplement
have been declared and paid or set apart for payment for the immediately
preceding dividend period (including any accumulation in respect of unpaid
dividends for prior dividend periods, if dividends on such Preferred Stock are
cumulative) (a) no cash dividend or distribution (other than in shares of Junior
Stock) may be declared, set aside or paid on the Junior Stock; (b) the Company
may not repurchase, redeem or otherwise acquire any shares of its Junior Stock
(except by conversion into or exchange for Junior Stock); and (c) the Company
may not, directly or indirectly, repurchase, redeem or otherwise acquire any
shares of Preferred Stock or Parity Stock otherwise than pursuant to certain pro
rata offers to purchase or a concurrent redemption of all, or a pro rata
portion, of the outstanding shares of such Preferred Stock and Parity Stock
(except by conversion into or exchange for Junior Stock).
CONVERTIBILITY
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted (mandatorily or otherwise) into shares of Common
Stock of the Company, another series of Preferred Stock, Debt Securities or
other securities of the Company will be set forth in the Prospectus Supplement
relating thereto.
15
<PAGE> 19
REDEMPTION
The terms, if any, on which shares of Preferred Stock of any series may be
redeemed will be set forth in the related Prospectus Supplement.
LIQUIDATION
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the holders of a series of Preferred Stock will be
entitled, subject to the rights of creditors, but before any distribution or
payment to the holders of Common Stock or any other security ranking junior to
the Preferred Stock on liquidation, dissolution or winding up of the Company, to
receive an amount per share as set forth in the related Prospectus Supplement
plus accrued and unpaid dividends for the then-current dividend period
(including any accumulation in respect of unpaid dividends for prior dividend
periods, if dividends on such series of Preferred stock are cumulative). If the
amounts available for distribution with respect to the Preferred Stock and all
other outstanding stock of the Company ranking on a parity with the Preferred
Stock upon liquidation are not sufficient to satisfy the full liquidation rights
of all the outstanding Preferred Stock and stock ranking on a parity therewith,
then the holders of each series of such stock will share ratably in any such
distribution of assets in proportion to the full respective preferential amount
(which in the case of preferred stock may include accumulated dividends) to
which they are entitled. After payment of the full amount of the liquidation
preferences, the holders of shares of Preferred Stock will not be entitled to
any further participation in any distribution of assets by the Company.
VOTING
The Preferred Stock of a series will not be entitled to vote, except as
provided below or in the applicable Prospectus Supplement and as required by
applicable law. Unless otherwise specified in the related Prospectus Supplement,
at any time dividends in an amount equal to six quarterly dividend payments on
the Preferred Stock shall have accrued and be unpaid, holders of the Preferred
Stock will have the right to a separate class vote (together with the holders of
shares of any Parity Stock upon which like voting rights have been conferred and
are exercisable, "Voting Parity Stock") to elect two members of the Board of
Directors at any meeting of stockholders held during the period such dividends
remain in arrears. Such voting rights will terminate (and the term of office of
all directors so elected will terminate) when all dividends on the Preferred
Stock have been paid in full or set apart for payment. Additionally, without the
affirmative vote of the holders of two-thirds of the shares of Preferred Stock
then outstanding (voting separately as a class together with any Voting Parity
Stock), the Company may not, either directly or indirectly or through merger or
consolidation with any other corporation, (i) approve the authorization,
creation or issuance, or an increase in the authorized or issued amount, of any
class or series of stock ranking prior to the shares of Preferred Stock in
rights and preferences, (ii) amend, alter or repeal its Certificate of
Incorporation or the Certificate of Designations so as to materially and
adversely change the specific terms of the Preferred Stock, or (iii) effect any
reclassification of the Preferred Stock. An amendment which increases the number
of authorized shares of or authorizes the creation or issuance of other classes
of preferred stock ranking junior to or on a parity with the Preferred Stock
with respect to the payment of dividends or distribution of assets upon
liquidation, dissolution or winding up, or substitute the surviving entity in a
merger, consolidation, reorganization or other business combination for the
Company, shall not be considered to be such an adverse change.
As more fully described under "Description of Depositary Shares" below, if
the Company elects to issue Depositary Shares, each representing a fraction of a
share of a series of the Preferred Stock, each such Depositary Share will, in
effect, be entitled to vote such fraction of a vote per Depositary Share.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the related Prospectus
16
<PAGE> 20
Supplement, the Certificate of Incorporation and in the Certificate of
Designations or as otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be described in
the related Prospectus Supplement.
EXISTING PREFERRED STOCK
In April 1993, the Company issued 1,035,000 shares (represented by
4,140,000 depositary shares) of $6.00 Convertible Exchangeable Preferred Stock,
1,033,500 of which (represented by 4,134,000 depositary shares) were outstanding
on March 31, 1997. Holders of such stock are entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available therefor,
cash dividends at an annual rate of $6.00 per share ($1.50 per depositary
share), payable quarterly in arrears. Upon liquidation, such holders are
entitled to receive a preference of $100.00 per share, plus accrued and unpaid
dividends to the payment date. Each share of such preferred stock is convertible
into 4.888 shares of Common Stock at any time prior to redemption (subject to
adjustment), equivalent to a conversion price of $20.46 for each share of Common
Stock. The Company has the right to exchange the shares of such preferred stock
for the Company's 6% convertible subordinated debentures due 2008 on any
dividend date payment date and has the right to redeem the 6% preferred stock at
any time.
The two existing classes of preferred stock rank prior to the Common Stock,
and on a parity with each other, as to dividends and upon liquidation,
dissolution or winding up.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the forms of Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock which have
been or will be filed with the Commission at or prior to the time of the
offering of such series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
Depositary to the public of receipts for Depositary Shares, each of which will
represent a fractional interest as set forth in the applicable Prospectus
Supplement.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Shares, to all the rights and preferences of the Preferred Stock underlying such
Depositary Share (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form.
17
<PAGE> 21
Definitive Depositary Receipts will be prepared thereafter without unreasonable
delay, and temporary Depositary Receipts will be exchangeable for definitive
Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the whole shares of Preferred Stock underlying the
Depositary Shares evidenced by the surrendered Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to how any
subscription or similar rights offered by the Company to holders of the
Preferred Stock will be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
will mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares relating to shares of Preferred Stock so
redeemed. If less than all of the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of any of such 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 as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Stock underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action which may be deemed necessary by the
Depositary
18
<PAGE> 22
in order to enable the Depositary to do so. The Depositary will abstain from
voting shares of Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Shares relating to such Preferred
Stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the Depositary only if (i)
all outstanding Depositary Shares relating thereto have been redeemed, exchanged
or converted or (ii) there has been a final distribution in respect of the
Preferred Stock of the relevant series in connection with any liquidations,
dissolution or winding up of the Company and such distribution has been
distributed to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstances beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION OF COMMON STOCK
COMMON STOCK
The Company is authorized to issue 75,000,000 shares of Common Stock. On
March 31, 1997, 30,553,865 shares were outstanding. All shares of Common Stock
have equal rights to participate in dividends and, in the event of liquidation,
assets available for distribution to stockholders, subject to any preference
19
<PAGE> 23
established with respect to preferred stock. Each holder of Common Stock is
entitled to one vote for each share held on all matters submitted to a vote of
stockholders, and voting rights for the election of directors are noncumulative.
Shares of Common Stock carry no conversion, preemptive or subscription rights,
and are not subject to redemption. All outstanding shares of Common Stock are,
and any shares of Common Stock issued upon conversion of convertible securities
will be, fully paid and nonassessable. The Company pays dividends on Common
Stock when, as and if declared by the Board of Directors. Dividends may be
declared in the discretion of the Board of Directors from funds legally
available therefore, subject to restrictions under agreements related to Company
indebtedness.
FACTORS AFFECTING ACQUISITIONS OF CONTROL
The Certificate of Incorporation, as amended, provides that the Board of
Directors, in its discretion, may establish one or more classes or series of
preferred stock having such number of shares, designations, relative voting
rights, dividend rates, liquidation and other rights, preferences and
limitations as may be fixed by the Board of Directors without any further
stockholder approval. Such rights, preferences, privileges and limitations as
may be established could have the effect of impeding or discouraging the
acquisition of control of the Company.
The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law (the "DGCL"). In general, Section 203 prevents
an "interested stockholder" (defined generally as a person owning 15% or more of
a corporation's outstanding voting stock) from engaging in a "business
combination" (as defined) with a Delaware corporation for three years following
the date such person became an interested stockholder unless (i) before such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination; (ii) upon
consummation of the transaction that resulted in the interested stockholder's
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the corporation and by employee stock plans that do not provide employees
with the rights to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer); or (iii) following the
transaction in which such person became an interested stockholder, the business
combination is approved by the board of directors of the corporation and
authorized at a meeting of stockholders by the affirmative vote of the holders
of two-thirds of the outstanding voting stock of the corporation not owned by
the interested stockholder. Under Section 203, the restrictions described above
also do not apply to certain business combinations proposed by an interested
stockholder following the announcement or notification of one of certain
extraordinary transactions involving the corporation and a person who had not
been an interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of the corporation's
directors, if such extraordinary transaction is approved or not opposed by a
majority of the directors who were directors prior to any person becoming an
interested stockholder during the previous three years or who were recommended
for election or elected to succeed such directors by a majority of such
directors.
DIRECTORS' LIABILITY
The Certificate of Incorporation, as amended, also provides for the
elimination of directors' liability for monetary damages for a breach of certain
fiduciary duties and for the indemnification of directors, officers, employees
or agents as permitted by the DGCL. These provisions cannot be amended without
the affirmative vote of the holders of at least a majority in interest of the
outstanding shares entitled to vote.
The Company has entered into indemnification agreements with all directors
and executive officers and may, in the future, enter into such agreements with
employees and agents. Such indemnification agreements provide generally that
such persons will be indemnified, to the extent permitted by applicable law, for
expenses (including attorneys' fees), judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by such persons in
connection with any proceeding (including, to the extent permitted by law, any
derivative action) to which such persons are, or are threatened to be made, a
party by reason of their status in
20
<PAGE> 24
such positions. Such indemnification agreements do not change the basic legal
standards for indemnity under applicable law or as set forth in the Certificate
of Incorporation.
The transfer agent for the Common Stock is ChaseMellon Shareholder
Services, L.L.C., Dallas, Texas.
DESCRIPTION OF WARRANTS
The company may issue Warrants for the purchase of Debt Securities,
Preferred Stock, Depositary Shares or Common Stock. Warrants may be issued
independently or together with Debt Securities, Preferred Stock, Depositary
Shares or Common Stock offered by any Prospectus Supplement and may be attached
to or separate from such Debt Securities, Preferred Stock, Depositary Shares or
Common Stock. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as Warrant agent, all as set forth in the Prospectus
Supplement relating to the particular issue of offered Warrants. The Warrant
agent will act solely as an agent of the Company in connection with the Warrant
certificates relating to the Warrants and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant certificates
or beneficial owners of Warrants. Warrant Agreements, including the forms of
Warrant certificates representing the Warrants, will be filed as an exhibit to
or incorporated by reference in the Registration Statement of which this
Prospectus is a part. The following summaries of certain provisions of the forms
of Warrant Agreements and Warrant certificates do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the Warrant Agreements and the Warrant certificates.
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will describe
the terms of such Warrants, including, in the case of Warrants for the purchase
of Debt Securities, the following where applicable: (i) the title and aggregate
number of such Warrants and the offering price; (ii) the designation,
denominations and terms of the series of Debt Securities purchasable upon
exercise of such Warrants; (iii) the designation and terms of any series of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock with which such
Warrants are being offered and the number of such Warrants being offered with
each such Debt Security, Preferred Stock, Depositary Share or Common Stock; (iv)
the date on and after which such Warrants and the related series of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock will be
transferable separately; (v) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Warrant and the price at which
such principal amount of Debt Securities of such series may be purchased upon
such exercise; (vi) the date on which the right to exercise such Warrants shall
commence and the date (the "Expiration Date") on which such right shall expire;
(vii) any special United States Federal income tax consequences; (viii) the
terms, if any, on which the Company may accelerate the date by which the
Warrants must be exercised; and (ix) any other terms of such Warrants, including
terms, procedures and limitations relating to the exchange and exercise of such
Warrants.
In the case of Warrants for the purchase of Preferred Stock, Depositary
Shares or Common Stock, the applicable Prospectus Supplement will describe the
terms of such Warrants, including the following where applicable: (i) the title
and aggregate number of such Warrants and the offering price; (ii) the aggregate
number of shares purchasable upon exercise of such Warrants, the exercise price,
and in the case of Warrants for Preferred Stock or Depositary Shares, the
designation, aggregate number and terms of the series of Preferred Stock
purchasable upon exercise of such Warrants or underlying the Depositary Shares
purchasable upon exercise of such Warrants; (iii) the designation and terms of
the series of Debt Securities, Preferred Stock, Depositary Shares or Common
Stock with which such Warrants are being offered and the number of such Warrants
being offered with each such Debt Security, Preferred Stock, Depositary Share or
Common Stock; (iv) the date on and after which such Warrants and the related
series of Debt Securities, Preferred Stock, Depositary Shares or Common Stock
will be transferable separately; (v) the date on which the right to exercise
such Warrants shall commence and the Expiration Date; (vi) any special United
States Federal income tax consequences; and (vii) any other terms of such
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Warrants.
21
<PAGE> 25
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of Debt Securities or number of shares of Preferred Stock, Depositary
Shares or Common Stock, as the case may be, at such exercise price as shall in
each case be set forth in, or calculable from, the Prospectus Supplement
relating to the offered Warrants. After the close of business on the Expiration
Date (or such later date to which such Expiration Date may be extended by the
Company), unexercised Warrants will become void.
Warrants may be exercised by delivering to the Warrant agent payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the Debt Securities, Preferred Stock, Depositary Shares or Common
Stock, as the case may be, purchasable upon such exercise together with certain
information set forth on the reverse side of the Warrant certificate. Warrants
will be deemed to have been exercised upon receipt of payment of the exercise
price, subject to the receipt within five business days, of the Warrant
certificate evidencing such Warrants. Upon receipt of such payment and the
Warrant certificate properly completed and duly executed at the corporate trust
office of the Warrant agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, issue and
deliver the Debt Securities, Preferred Stock, Depositary Shares or Common Stock,
as the case may be, purchasable upon such exercise. If fewer than all of the
Warrants represented by such Warrant certificate are exercised, a new Warrant
certificate will be issued for the remaining amount of Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
The Warrant Agreements may be amended or supplemented without the consent
of the holders of the Warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the Warrants and that do not adversely
affect the interest of the holders of the Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a
Warrant entitling the holder to purchase Common Stock (a "Common Stock Warrant")
are subject to adjustment in certain events, including (i) payment of a dividend
on the Common Stock payable in capital stock and stock splits, combinations or
reclassifications of the Common Stock, (ii) issuance to all holders of Common
Stock of rights or warrants to subscribe for or purchase shares of Common Stock
at less than their current market price (as defined in the Warrant Agreement for
such series of Common Stock Warrants), and (iii) certain distributions of
evidences of indebtedness or assets (including securities but excluding cash
dividends or distributions paid out of retained earnings or dividends payable in
Common Stock) or of subscription rights and warrants (excluding those referred
to above). If after the distribution date fixed for purposes of distributing to
holders of Common Stock any Stockholder Rights, exercising holders of any Common
Stock Warrant are not entitled to receive Stockholder Rights that would
otherwise be attributable (but for the date of exercise) to the shares of Common
Stock received upon such exercise, then adjustment of the exercise price will be
made under clause (iii) of this paragraph as if the Stockholder Rights were
being distributed to holder of the Company's Common Stock. If such an adjustment
is made and the Stockholder Rights are later redeemed, invalidated or
terminated, then a corresponding reversing adjustment will be made to the number
of shares of Common Stock issuable upon the exercise of such Common Stock
Warrant, on an equitable basis, to take account of such event. However, the
Company may elect to make provision with respect to Stockholder Rights so that
each share of Common Stock issuable upon exercise of such Common Stock Warrant
whether or not issued after the distribution date for such Stockholder Rights,
will be accompanied by the Stockholder Rights that would otherwise be
attributable (but for the date of exercise) to such shares of Common Stock, in
which event the preceding two sentences will not apply.
No adjustment in the exercise price of, and the number of shares of Common
Stock covered by, a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least 1% in the exercise price than in
22
<PAGE> 26
effect. Except as stated above, the exercise price of, and the number of share
of Common Stock covered by, a Common Stock Warrant will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock, or carrying the right or option to purchase or otherwise acquire
the foregoing, in exchange for cash, other property or services.
In the event of any (i) consolidation or merger of the Company with or into
any entity (other than a consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), (ii) sale, transfer, lease or conveyance of all or substantially
all of the assets of the Company or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a change in par
value of from par value to no par value), then any holder of a Common Stock
Warrant will be entitled, on or after the occurrence of any such event, to
receive on exercise of such Common Stock Warrant the kind and amount of shares
of stock or other securities, cash or other property (or any combination
thereof) that the holder would have received had such holder exercised such
holder's Common Stock Warrant immediately prior to the occurrence of such event.
If the consideration to be received upon exercise of the Common Stock Warrant
following any such event consists of common stock of the surviving entity, then
from and after the occurrence of such event, the exercise price of such Common
Stock Warrant will be subject to the same antidilution and other adjustments
described in the second preceding paragraph, applied as if such common stock
were Common Stock.
GLOBAL SECURITIES
REGISTERED GLOBAL SECURITIES
The registered Securities (including Registered Debt Securities but
excluding Common Stock) of a series may be issued in whole or in part in the
form of one or more fully registered global Securities ("Registered Global
Securities") that will be deposited with, or on behalf of, a depository (the
"Depository") identified in the Prospectus Supplement relating to such series.
Registered Global Securities may be issued in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for the individual
registered Securities represented thereby, a Registered Global Security may not
be transferred except as a whole by the Depository for such Registered Global
Security to a nominee of such Depository or by a nominee of such Depository to
such Depository or another nominee of such Depository or by the Depository or
any nominee of such Depository to a successor Depository or any nominee of such
successor.
The specific terms of the depository arrangement with respect to a series
of Securities will be described in the Prospectus Supplement relating to such
series. Unless otherwise specified in the Prospectus Supplement, the Company
anticipates that the following provisions will apply to depository arrangements.
Upon the issuance of a Registered Global Security, the Depository for such
Registered Global Security or its nominee will credit on its book-entry
registration and transfer system the respective principal amounts of the
individual Securities represented by such Registered Global Security to the
accounts of persons that have accounts with such Depository ("Participants").
Such accounts shall be designated by the underwriters, dealers or agents with
respect to such Securities or by the Company if such Securities are offered and
sold directly by the Company. Ownership of beneficial interests in a Registered
Global Security will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the applicable Depository
or its nominee (with respect to interests to Participants) and records of
Participants (with respects to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, pledge or transfer
beneficial interests in a Registered Global Security.
So long as the Depository for a Registered Global Security or its nominee
is the registered owner of such Registered Global Security, such Depository or
such nominee, as the case may be, will be considered the sole owner or holder of
the Securities represented by such Registered Global Security for all purposes
under the Indenture or applicable Warrant Agreement. Except as provided below,
owners of beneficial interests in a
23
<PAGE> 27
Registered Global Security will not be entitled to have any of the individual
Securities of the series represented by such Registered Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Securities of such series in definitive form and will not
be considered the owners or holders thereof under the Indenture or applicable
Warrant Agreement. Accordingly, each person owning a beneficial interest in a
Registered Global Security must rely on the procedures of the Depository for
such Registered Global Security and, if such a person is not a Participant, on
the procedures of the Participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture or applicable Warrant
Agreement. The Company understands that under existing industry practices, if
the Company requests any action of holders or if an owner of a beneficial
interest in a Registered Global Security desires to give or take any action
which a holder is entitled to give or take under the Indenture or applicable
Warrant Agreement, the Depository for such Registered Global Security would
authorize the Participants holding the relevant beneficial interests to give or
take such action, and such Participants would authorize beneficial owners owning
through such Participants to give or take such action or would otherwise act
upon the instructions of beneficial owners holding through them.
Payments of principal of and any premium or interest on individual
Securities represented by a Registered Global Security registered in the name of
a Depository or its nominee will be made to the Depository or its nominee, as
the case may be, as the registered owner of the Registered Global Security
representing such Securities. None of the Company, the Trustee, the Warrant
Agent, any paying agent or the registrar for such Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Registered
Global Security for such Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depository for a series of Securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Registered Global Security representing any of such
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Registered Global Security for such Securities as shown on the
records of such Depository or its nominee. The Company also expects that
payments by Participants to owners of beneficial interests in such Registered
Global Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such Participants.
If a Depository for a series of Securities is at any time unwilling, unable
or ineligible to continue as depository and a successor depository is not
appointed by the Company within 90 days, the Company will issue individual
Securities of such series in exchange for the Registered Global Security
representing such series of Securities. In addition, the Company may, at any
time and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such series of Securities, determine not to
have any Securities of such series represented by one or more Registered Global
Securities and, in such event, will issue individual Securities of such series
in exchange for the Registered Global Security or Securities representing such
series of Securities. Individual Securities of such series so issued will be
issued in denominations, unless otherwise specified by the Company, of $1,000
and integral multiples thereof. Any Securities issued in definitive form in
exchange for a Registered Global Security will be registered in such name as the
Depository shall instruct the Trustee or relevant Warrant Agent. It is expected
that such instructions will be based upon directions received by the Depository
from Participants with respect to ownership of beneficial interests in such
Registered Global Security.
BEARER GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Securities of a series which are issuable as Bearer Debt Securities will
initially be represented by one or more temporary global Bearer Debt Securities
("Bearer Global Securities"), without interest coupons, to be deposited with a
common depositary in London for the Euro-clear System ("Euro-clear") and CEDEL
S.A. ("CEDEL") for credit to the designated accounts. On and after the date
determined as provided in any such temporary Bearer
24
<PAGE> 28
Global Security and described in an applicable Prospectus Supplement, each such
temporary Bearer Global Security will be exchangeable for definitive Bearer Debt
Securities, definitive Registered Debt Securities or all or a portion of a
permanent Bearer Global Security, or any combination thereof, as specified in an
applicable Prospectus Supplement, but, unless otherwise specified in an
applicable Prospectus Supplement, only upon written certification in the form
and to the effect described under "Description of Debt Securities -- Provisions
Applicable to Both Senior and Subordinated Debt Securities -- Form, Exchange,
Registration and Transfer." No Bearer Debt Security delivered in exchange for a
portion of a temporary Bearer Global Security will be mailed or otherwise
delivered to any location in the United States in connection with such exchange.
The specific terms and procedures, including the specific terms of the
depositary arrangement with respect to any portion of a series of Bearer Debt
Securities to be represented by a Bearer Global Security will be described in
the applicable Prospectus Supplement.
PLAN OF DISTRIBUTION
The Company may offer Securities to or through underwriters, through agents
or directly to other purchasers.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such market prices
or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or from purchasers in the form of
discounts, concessions or commissions. Underwriters, agents and dealers
participating in the distribution of the Securities may be deemed to be
underwriters within the meaning of the Securities Act.
Pursuant to agreements which may be entered into between the Company and
any underwriters or agents named in the Prospectus Supplement, such underwriters
or agents may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as agents for the Company to solicit offers
by certain institutional investors to purchase Debt Securities or Preferred
Stock from the Company pursuant to contracts providing for payment and delivery
on a future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but shall in all
cases be subject to the approval of the Company. The obligations of the
purchaser under any such contract will not be subject to any conditions except
(i) the investment in the Debt Securities or Preferred Stock by the institution
shall not at the time of delivery be prohibited by the laws of any jurisdiction
in the United States to which such institution is subject, and (ii) if a portion
of the Debt Securities or Preferred Stock is being sold to underwriters, the
Company shall have sold to such underwriters the Debt Securities or Preferred
Stock not sold for delayed delivery. Underwriters and such other persons will
not have any responsibility in respect of the validity or performance of such
contracts.
All Debt Securities, Preferred Stock and Warrants offered will be a new
issue of securities with no established trading market. Any underwriters to whom
such Debt Securities, Preferred Stock and Warrants are sold by the Company for
public offering and sale may make a market in such Debt Securities, Preferred
Stock and Warrants, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any Debt Securities,
Preferred Stock or Warrants.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
The specific terms and manner of sale of the Securities in respect of which
this Prospectus is being delivered are set forth or summarized in the Prospectus
Supplement.
25
<PAGE> 29
VALIDITY OF SECURITIES
The validity of the Securities offered will be passed upon for the Company
by Peter E. Lorenzen, Vice President and General Counsel of the Company, and for
the underwriters or agents, if any, by a firm named in the Prospectus Supplement
relating to a particular issue of Securities. Mr. Lorenzen owns 35,000 shares,
and holds options to purchase 65,200 shares, of Common Stock.
EXPERTS
The consolidated financial statements and financial statement schedules
incorporated in this Prospectus by reference have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated herein in reliance upon the authority of
such firm as experts in accounting and auditing in giving said reports.
The information incorporated herein by reference regarding proved reserves
and related future net revenues and the present value thereof is derived, as and
to the extent described herein and therein, from reserve reports prepared by
Netherland, Sewell & Associates, Inc., and Ryder Scott Company Petroleum
Engineers, independent oil and gas consultants, and, to such extent, are
included and incorporated by reference in reliance upon the authority of such
firms as experts with respect to the matters contained in such reports.
26
<PAGE> 30
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this Registration
Statement shall have been the meanings assigned to them in the Prospectus which
forms a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the SEC Registration Fee, the following itemized table sets
forth estimates of those expenses payable by the Company in connection with the
offer and sale or exchange of the securities offered hereby:
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 0
Printing and Engraving Expenses............................. 5,000
Legal Fees and Expenses..................................... 5,000
Accountants' Fees and Expenses.............................. 5,000
Miscellaneous Fees and Expenses............................. 5,000
-------
Total............................................. $20,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrants are incorporated in Delaware. Under Section 145 of the
General Corporation Law of the State of Delaware (the "DGCL"), a Delaware
corporation has the power, under specified circumstances, to indemnify its
directors, officers, employees and agents in connection with actions, suits or
proceedings brought against them by a third party or in the right of the
corporation, by reason of the fact that they were or are such directors,
officers, employees or agents, against expenses and liabilities incurred in any
such action, suit or proceeding so long as they acted in good faith and in a
manner that they reasonably believed to be in, or not opposed to, the best
interests of such corporation, and with respect to any criminal action, that
they had no reasonable cause to believe their conduct was unlawful. With respect
to suits by or in the right of such corporation, however, indemnification is
generally limited to attorneys' fees and other expenses and is not available if
such person is adjudged to be liable to such corporation unless the court
determines that indemnification is appropriate. A Delaware corporation also has
the power to purchase and maintain insurance for such persons. Article Nine of
the Certificate of Incorporation of the Registrant provides for mandatory
indemnification of directors and officers to the fullest extent permitted by
Section 145 of the DGCL. Reference is made to the Certificate of Incorporation
of the Registrant, filed as an Exhibit hereto.
The form of the Underwriting Agreement, which will be filed as an Exhibit
hereto, will provide that the Underwriters will indemnify the Registrants, their
directors and officers and certain other persons against liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act")
with respect to information furnished in writing to the Registrants for use in
this Registration Statement.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the DGCL or
(iv) for any transaction from which the director derived an improper personal
benefit. The Registrants' Certificates of Incorporation contain such a
provision.
The above discussion of the Registrants' Certificates of Incorporation and
Sections 102(b)(7) and 145 of the DGCL is not intended to be exhaustive and is
qualified in its entirety by such Certificates of Incorporation and statutes.
II-1
<PAGE> 31
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 -- Form of Underwriting Agreement (for debt securities and
guarantees).*
4.1 -- Form of Indenture, including form of Debenture, with
respect to Senior Indebtedness -- incorporated by
reference from Exhibit 4 to Snyder Oil Corporation's
Registration Statement No. 33-54809.
4.2 -- Form of Indenture, including form of Debenture, with
respect to Subordinated Indebtedness -- incorporated by
reference from Exhibit 4 to Snyder Oil Corporation's
Registration Statement No. 33-54809.
5.1 -- Opinion of Peter E. Lorenzen, Vice President -- General
Counsel of the Registrants, as to legality of the
Securities registered hereby.*
12.1 -- Computation of Ratio of Earnings to Fixed Charges.**
12.2 -- Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.**
23.1 -- Consent of Peter E. Lorenzen to use of his opinion filed
as Exhibit 5.1 (set forth in his opinion filed as Exhibit
5.1).
23.2 -- Consent of Arthur Andersen LLP.**
23.3 -- Consent of Netherland, Sewell, & Associates, Inc.**
23.4 -- Consent of Ryder Scott Company Petroleum Engineers.**
24.1 -- Powers of attorney (set forth on the signature page
hereof).
25.1 -- Form T-1 Statements of Eligibility and Qualification of
Trustees under Trust Indenture Act of 1939 relating to
Senior Indenture and Subordinated Indenture.*
99.1 -- Reserve letter from Netherland, Sewell & Associates, Inc.
dated February 5, 1997 to the Snyder Oil Corporation
interest as of December 31, 1996 -- incorporated by
reference from Exhibit 99 to the Annual Report on Form
10-K of Snyder Oil Corporation for the year ended
December 31, 1997 (File No. 1-10509).
99.2 -- Reserve letter from Netherland, Sewell & Associates, Inc.
dated February 5, 1997 to the Patina Oil & Gas
Corporation interest as of December 31, 1996 --
incorporated by reference from Exhibit 99 to the Annual
Report on Form 10-K of Snyder Oil Corporation for the
year ended December 31, 1997 (File No. 1-10509).
99.3 -- Reserve letter from Ryder Scott Company Petroleum
Engineers dated February 5, 1997 to the SOCO Offshore,
Inc. interest as of December 31, 1996 -- incorporated by
reference from Exhibit 99 to the Annual Report on Form
10-K of Snyder Oil Corporation for the year ended
December 31, 1997 (File No. 1-10509).
</TABLE>
- ---------------
* To be filed as an exhibit to Form 8-K in reference to the specific offering
of Securities, if any, to which it relates.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment 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 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; 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 and of the estimated
maximum offering range may be reflected in the
II-2
<PAGE> 32
form of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than
20 percent 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 (a)(1)(i) and (a)(1)(ii) do not apply if the
information 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 Securities Exchange Act of 1934, as amended (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, 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 post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrants' 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 Registrants hereby undertake if securities are to be
offered pursuant to competitive bidding (1) to use its best efforts to
distribute prior to the opening of bids, to prospective bidders, underwriters
and dealers, a reasonable number of copies of a prospectus which at that time
meets the requirements of section 10(a) of the Securities Act, and relating to
the securities offered at competitive bidding, as contained in this Registration
Statement, together with any supplements thereto, and (2) to file an amendment
to this Registration Statement reflecting the results of bidding, terms of the
reoffering and related matters to the extent required by the applicable form,
not later than the first use, authorized by the issuer after the opening of
bids, of a prospectus relating to the securities offered at competitive bidding,
unless no further public offering of such securities by the issuer and no
reoffering of such securities by the purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling persons of the Registrants 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 Registrants will, unless in the opinion of their 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.
(e) The undersigned Registrants hereby undertake to file applications for
the purpose of determining the eligibility of the Senior Trustee and the
Subordinated Trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Trust Indenture Act.
II-3
<PAGE> 33
SIGNATURES
Pursuant to the requirements of the Securities Act, each Registrant
certifies that it has reasonable grounds to believe that it meets all 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 Fort Worth, State of Texas, on May 16, 1997.
DelMar Petroleum, Inc.
Mexican Flats Service Company
Snyder Fluid Technologies, Inc.
Snyder Gas Marketing, Inc.
SOCO Gas Systems, Inc.
SOCO Holdings, Inc.
SOCO Louisiana Leasing, Inc.
SOCO Offshore, Inc.
Western Transmission Corporation
Wyoming Gathering and Production Company
By: /s/ PETER E. LORENZEN
----------------------------------
Peter E. Lorenzen, Vice
President(1)
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes and appoints John C. Snyder, William G. Hargett, Rodney L.
Waller and Peter E. Lorenzen, and each of them, any one of whom may act without
the joinder of the other, as his attorney-in-fact to sign on his behalf
individually and in the capacity stated below all amendments and post-effective
amendments to this Registration Statement as such attorney-in-fact may deem
necessary or appropriate.
<TABLE>
<C> <S> <C>
/s/ JOHN C. SNYDER Director(1) and Chairman of the
- ----------------------------------------------------- Board(1) May 16, 1997
John C. Snyder
/s/ WILLIAM G. HARGETT Director(1) and President(2)
- ----------------------------------------------------- (Principal Executive
William G. Hargett Officer(2)) May 16, 1997
/s/ CHARLES A. BROWN Director(3) and President(3)
- ----------------------------------------------------- (Principal Executive
Charles A. Brown Officer(3)) May 16, 1997
/s/ PETER C. FORBES Director(4) and President(4)
- ----------------------------------------------------- (Principal Executive
Peter C. Forbes Officer(4)) May 16, 1997
/s/ DAVID M. POSNER Director(5) and President(5)
- ----------------------------------------------------- (Principal Executive
David M. Posner Officer(5)) May 16, 1997
/s/ JAMES H. SHONSEY Vice President(1)
- ----------------------------------------------------- (Principal Financial and
James H. Shonsey Accounting Officer) May 16, 1997
/s/ RODNEY L. WALLER Director(6) and President(6)
- ----------------------------------------------------- (Principal Executive
Rodney L. Waller Officer(6)) May 16, 1997
/s/ RICHARD A. WOLLIN Director(2) May 16, 1997
- -----------------------------------------------------
Richard A. Wollin
</TABLE>
- ---------------
(1) of all Registrants.
(2) of SOCO Louisiana Leasing, Inc.
(3) of Mexican Flats Service Company.
(4) of DelMar Petroleum, Inc. and SOCO Offshore, Inc.
(5) of Snyder Gas Marketing, Inc., SOCO Gas Systems, Inc., Western Transmission
Corporation and Wyoming Gathering and Production Company.
(6) of Snyder Fluid Technologies, Inc. and SOCO Holdings, Inc.
II-4
<PAGE> 1
EXHIBIT 12.1
SNYDER OIL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
THREE
YEAR ENDED DECEMBER 31, MONTHS ENDED
---------------------------------------------------- MARCH 31,
1992 1993 1994 1995 1996 1997
------- ------- ------- -------- ------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before taxes, minority
interest and extraordinary item... $15,027 $22,538 $13,510 $(40,604) $74,701 $31,600
Interest expense.................... 4,997 5,315 10,337 21,679 23,587 6,787
------- ------- ------- -------- ------- -------
Earnings before taxes, minority
interest, extraordinary item and
interest expense.................. $20,024 $27,853 $23,847 $(18,925) $98,288 $38,387
======= ======= ======= ======== ======= =======
Interest expense.................... $ 4,997 $ 5,315 $10,337 $ 21,679 $23,587 $ 6,787
Preferred stock dividends of
majority owned subsidiary......... -- -- -- -- 1,520 502
------- ------- ------- -------- ------- -------
Total fixed charges....... $ 4,997 $ 5,315 $10,337 $ 21,679 $25,107 $ 7,289
======= ======= ======= ======== ======= =======
Ratio of earnings of fixed
charges........................... 4.01 5.24 2.31 N/A(1) 3.91 5.27
======= ======= ======= ======== ======= =======
</TABLE>
- ---------------
(1) Earnings were inadequate to cover fixed charges by $40.6 million.
<PAGE> 1
EXHIBIT 12.2
SNYDER OIL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE
YEAR ENDED DECEMBER 31, MONTHS ENDED
---------------------------------------------------- MARCH 31,
1992 1993 1994 1995 1996 1997
------- ------- ------- -------- ------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before taxes, minority
interest and extraordinary item... $15,027 $22,538 $13,510 $(40,604) $74,701 $31,600
Interest expense.................... 4,997 5,315 10,337 21,679 23,587 6,787
------- ------- ------- -------- ------- -------
Earnings before taxes, minority
interest, extraordinary item and
interest expense.................. $20,024 $27,853 $23,847 $(18,925) $98,288 $38,387
======= ======= ======= ======== ======= =======
Interest expense.................... $ 4,997 $ 5,315 $10,337 $ 21,679 $23,587 $ 6,787
Preferred stock dividends........... 4,800 9,100 10,806 6,210 6,210 1,550
Adjustment to tax effect preferred
stock dividends................... -- -- -- -- 429 690
Preferred stock dividends of
majority owned subsidiary......... -- -- -- -- 1,520 502
------- ------- ------- -------- ------- -------
Total fixed charges....... $ 9,797 $14,415 $21,143 $ 27,889 $31,746 $ 9,529
======= ======= ======= ======== ======= =======
Ratio of earnings to combined fixed
charges and preferred dividends... 2.04 1.93 1.13 N/A(1) 3.10 4.03
======= ======= ======= ======== ======= =======
</TABLE>
- ---------------
(1) Earnings were inadequate to cover combined fixed charges and preferred
dividends by $46.8 million.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report dated February 17, 1997, included in the Company's 1996 Form 10-K
(and to all references to our Firm), included in or made part of this
registration statement.
ARTHUR ANDERSEN LLP
Fort Worth, Texas
May 16, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
As independent petroleum consultants, we hereby consent to the
incorporation by reference in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report to Snyder Oil Corporation dated
February 5, 1997 appearing at Exhibit 99.1 of Snyder Oil Corporation's Annual
Report on Form 10-K for the year ended December 31, 1996 and of our report to
Patina Oil & Gas Corporation dated February 5, 1997 appearing at Exhibit 99.2 of
Snyder Oil Corporation's Annual Report on Form 10-K for the year ended December
31, 1996. We also consent to all references to our firm included as a part of
this Registration Statement on Form S-3 to be filed on or about May 16, 1997.
NETHERLAND, SEWELL & ASSOCIATES,
INC.
By /s/ CLARENCE M. NETHERLAND
-----------------------------------
Clarence M. Netherland, Chairman
Dallas, Texas
May 16, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
As independent petroleum consultants, we hereby consent to the
incorporation by reference in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report to Snyder Oil Corporation dated
February 5, 1997 appearing at Exhibit 99.3 of Snyder Oil Corporation's Annual
Report on Form 10-K for the year ended December 31, 1996. We also consent to all
references to our firm included as a part of this Registration Statement on Form
S-3 to be filed on or about May 16, 1997.
RYDER SCOTT COMPANY PETROLEUM
ENGINEERS
Houston, Texas
May 16, 1997
