<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 17, 1995)
[LOGO]
$150,000,000
ORYX ENERGY COMPANY
8 3/8% NOTES DUE JULY 15, 2004
Interest payable January 15 and July 15
------------------------
The Notes may not be redeemed by the Company at any time prior to maturity.
The Notes will be represented by global securities registered in the name of
the nominee of The Depository Trust Company (Depositary). Interests in the Notes
will only be evidenced by, and transfers will only be effected through, records
maintained by the Depositary and its participants. Except as described in the
accompanying Prospectus, securities in definitive form will not be issued.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS COMPANY(1)(2)
<S> <C> <C> <C>
Per Note.................................... 99.74% 0.75% 98.99%
Total....................................... $149,610,000 $1,125,000 $148,485,000
</TABLE>
(1) Plus accrued interest, if any, from July 17, 1996.
(2) Before deduction of expenses payable by the Company estimated at $200,000.
------------------------
The Notes are being offered by the Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters. The Underwriters reserve the
right to reject orders in whole or in part. It is expected that the Notes will
be delivered in book-entry form on or about July 17, 1996 through the facilities
of The Depository Trust Company.
Chase Securities Inc. UBS Securities
BA Securities, Inc.
BZW Securities Inc.
NatWest Capital Markets Limited
Nesbitt Burns Securities Inc.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JULY 11, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
Oryx Energy Company (together with its consolidated subsidiaries, unless the
context otherwise requires, Company) engages in the oil and gas exploration and
production business. The Company has a strong base of U.S. and international
reserves and production in the Gulf of Mexico, the southwestern U.S., the U.K.
North Sea, Ecuador and Kazakstan. It also has exploration and development
projects in the above mentioned areas as well as exploration projects in
Australia and Algeria. The Company continues to pursue selective acquisitions of
producing properties in areas in which it is currently operating with a view to
increasing current production volumes and cash flow from operations. The
Company's business in the United States is conducted through Sun Energy
Partners, L.P. (Partnership), of which the Company is the Managing General
Partner and owns a 98 percent interest.
The Company was incorporated in Delaware in 1971. The Company's principal
executive office is located at 13155 Noel Road, Dallas, Texas 75240-5067 and its
telephone number is (214) 715-4000.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Notes
offered hereby, estimated to be approximately $148.3 million after offering
expenses, to refinance debt outstanding under the Company's Revolving Credit
Agreement, uncommitted lines of credit and commercial paper. These vehicles have
been utilized to refinance $100 million of the Company's 9.30% Notes that
matured in May 1996 and $35 million of the Company's 6.05% Medium Term Notes
that matured in February 1996. The Company has an additional $12 million of
8.92% Medium Term Notes that will mature in the fourth quarter of 1996.
Borrowings to be refinanced with the net proceeds have a final maturity of up to
two years, and as of June 30, 1996 had a weighted average interest rate of
6.21%. Pending application, the net proceeds will be used for working capital or
other general corporate purposes.
RECENT DEVELOPMENTS
Oil and gas revenues for the 1996 second quarter are expected to remain
relatively flat in comparison to the 1996 first quarter. Production volumes of
crude oil and natural gas for the 1996 second quarter remain at approximately
the same level as the 1996 first quarter. There has been a favorable increase in
crude oil prices in the 1996 second quarter over the first quarter of 1996 but
this increase is partially offset by small declines in the natural gas price.
Expenses, however, are also expected to increase in the 1996 second quarter as
compared to the 1996 first quarter primarily due to increased production taxes
and exploration costs.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securities set forth
in the accompanying Prospectus under "Description of the Debt Securities," to
which reference is hereby made. The following description does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the description set forth in the Prospectus and the provisions of the Senior
Indenture referred to therein. The Notes will be issued as a series of Debt
Securities under the Senior Indenture and, unless otherwise specified in this
Prospectus Supplement, the terms and conditions relating to the Senior Debt
Securities set forth in "Description of the Debt Securities" will apply to the
Notes. Capitalized terms not otherwise defined herein shall have the meanings
given to them in the Prospectus.
S-2
<PAGE>
GENERAL
The Notes offered hereby will be limited to $150,000,000 aggregate principal
amount and will be issued under the Senior Indenture. The Notes will mature on
July 15, 2004. The Notes will bear interest from July 17, 1996 at the rate per
annum shown on the front cover of this Prospectus Supplement payable
semiannually on January 15 and July 15 of each year, commencing January 15,
1997, to the person in whose name the Notes are registered at the close of
business on the January 1 or July 1, as the case may be, next preceding such
interest payment date. The Notes are not entitled to any sinking fund.
REDEMPTION
The Notes may not be redeemed by the Company at any time prior to maturity.
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of fully registered global notes. The
global notes will be deposited with, or on behalf of, the Depositary and
registered in the name of the Depositary's nominee. Reference is made to the
description of the Depositary's procedures with respect to global notes in the
accompanying Prospectus under "Description of the Debt Securities -- General
Provisions Applicable to Both Indentures -- Book-Entry System."
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated July 11, 1996 (the "Underwriting Agreement"), the Underwriters
named below (the "Underwriters") have severally but not jointly agreed to
purchase from the Company the following respective principal amounts of the
Notes:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT OF NOTES
- ------------------------------------------------------------------- ---------------
<S> <C>
Chase Securities Inc............................................... $ 66,000,000
UBS Securities LLC................................................. 66,000,000
BA Securities, Inc................................................. 4,500,000
BZW Securities Inc................................................. 4,500,000
NatWest Capital Markets Limited.................................... 4,500,000
Nesbitt Burns Securities Inc....................................... 4,500,000
---------------
Total.......................................................... $ 150,000,000
---------------
---------------
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
to purchase the Notes are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all the Notes if any are purchased.
The Underwriting Agreement provides that, in the event of a default by an
Underwriter, in certain circumstances the purchase commitments of non-defaulting
Underwriters may be increased or the Underwriting Agreement may be terminated.
The Company has been advised by the Underwriters that they propose to offer
the Notes to the public initially at the public offering price set forth on the
cover page of this Prospectus Supplement and to certain dealers at such price
less a concession of 0.45% of the principal amount per Note, and the
Underwriters and such dealers may allow a discount of 0.25% of the principal
amount per Note on sales to certain other dealers. After the initial public
offering, the offering price, concession and discount may be changed by the
Underwriters.
The Notes are a new issue of securities with no established trading market.
The Underwriters have advised the Company that they presently intend to act as
market makers for the Notes. However, the Underwriters are not obligated to do
so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or contribute
to payments which the Underwriters may be required to make in respect thereof.
S-3
<PAGE>
NatWest Capital Markets Limited ("NatWest"), a United Kingdom broker-dealer
and a member of the Securities Futures Authority Limited, has agreed that, as
part of the distribution of the Notes offered hereby and subject to certain
exceptions, it will not offer or sell any Notes within the United States, its
territories or possessions or to persons who are citizens thereof or residents
therein. The Underwriting Agreement does not limit the sale of the Notes offered
hereby outside of the United States.
NatWest has also represented and agreed that (i) it has not offered or sold
and will not offer or sell any Notes to persons in the United Kingdom, except to
persons whose ordinary activities involve acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (ii) it has complied with and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom, and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Notes to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemption) Order 1995 or is a person to whom such document may otherwise
lawfully be issued or passed on.
Each of the Underwriters and/or certain of their affiliates (other than UBS
Securities LLC) has engaged in transactions with and performed investment
banking and/or commercial banking services for the Company and certain of its
subsidiaries from time to time in the ordinary course of business, and each may
do so in the future. Affiliates of each of Chase Securities Inc., NatWest and
Nesbitt Burns Securities Inc. are lenders under the Company's Revolving Credit
Agreement, and affiliates of each of BA Securities, Inc. and BZW Securities Inc.
are co-agents and lenders under the Revolving Credit Agreement.
LEGAL MATTERS
The validity of the Notes will be passed upon for the Company by Akin, Gump,
Strauss, Hauer & Feld, L.L.P., New York, New York, and for the Underwriters by
Milbank, Tweed, Hadley & McCloy, New York, New York.
S-4
<PAGE>
PROSPECTUS
$500,000,000
ORYX ENERGY COMPANY
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
------------------
Oryx Energy Company (Company) may offer from time to time in one or more
series its unsecured debt securities (Debt Securities). The Debt Securities may
be senior debt securities (Senior Debt Securities) or subordinated debt
securities (Subordinated Debt Securities). The Subordinated Debt Securities may
be convertible into shares of Common Stock, $1.00 par value, of the Company
(Common Stock). The Company may also from time to time offer shares of Common
Stock or Preferred Stock, $1.00 par value, of the Company (Preferred Stock). The
aggregate offering price of the Debt Securities, the Common Stock and the
Preferred Stock offered hereby (Securities) will not exceed $500,000,000. The
Company will offer the Securities to the public from time to time on terms
determined by market conditions.
The Senior Debt Securities will be senior obligations of the Company,
unsecured and unsubordinated to any other existing indebtedness of the Company.
Because the Company is a holding company, the Senior Debt Securities will be
effectively subordinated to the indebtedness (including trade payables) of the
Company's subsidiaries outstanding from time to time.
The Subordinated Debt Securities will be subordinated in right of payment to
all present and future Senior Debt of the Company as defined herein.
An accompanying Prospectus Supplement relating to Debt Securities will set
forth the specific terms of the offering and sale of such Debt Securities,
including the specific designation, aggregate principal amount, purchase price,
maturity, interest rate (or manner of calculation thereof), time of payment of
interest, terms for conversion (if any), listing (if any) on a securities
exchange, any terms for mandatory or optional redemption and any other specific
terms of the series of Debt Securities in respect of which this Prospectus is
being delivered (Offered Debt Securities).
The Offered Debt Securities may be issuable in registered definitive form
(Certificated Notes) or may be represented by one or more permanent global
securities (Global Notes), as specified in the applicable Prospectus Supplement.
Except in limited circumstances, owners of beneficial interests in a Global Note
will not be entitled to receive physical delivery of Certificated Notes and will
not be considered the holders thereof. See "Description of Debt Securities --
Book-Entry System."
The Prospectus Supplement relating to Preferred Stock will also set forth
the specific designation, number of shares, rights, preferences, privileges and
restrictions, including dividend rate (or manner of calculation thereof), time
of payment of dividends, liquidation value, terms for conversion (if any),
voting rights, listing (if any) on a securities exchange, any terms for
mandatory or optional redemption and any other specific terms of the series of
Preferred Stock in respect of which this Prospectus is being delivered (Offered
Preferred Stock, and together with Offered Debt Securities and any Common Stock
offered by such Prospectus Supplement, Offered Securities).
The Securities will be sold either through underwriters, dealers or agents,
or directly by the Company. The applicable Prospectus Supplement will set forth
the names of any underwriters or agents involved in the sale of the Offered
Securities, the proposed amounts, if any, to be purchased by underwriters and
the compensation, if any, of such underwriters or agents.
The Common Stock is listed on the New York Stock Exchange.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
--------------------------
The date of this Prospectus is October 17, 1995
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE.
------------------------
AVAILABLE INFORMATION
The Company (Commission File No. 1-10053) is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (Exchange Act),
and in accordance therewith files reports, proxy and information statements and
other information with the Securities and Exchange Commission (Commission). Such
reports, proxy and information statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices at Suite 1400, Northwest Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can also be obtained from the Public
Reference Section of the Commission in Washington, D.C. 20549 at prescribed
rates. In addition, such material and other information concerning the Company
can be inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments, supplements and exhibits thereto,
referred to as the Registration Statement) under the Securities Act of 1933, as
amended (Securities Act), with respect to the Securities offered hereby. This
Prospectus, which forms 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, reference is hereby made to the
Registration Statement.
------------------------
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following documents filed with the Commission (File No. 1-10053): (i) the Annual
Report on Form 10-K of the Company for the fiscal year ended December 31, 1994;
(ii) the Quarterly Report on Form 10-Q of the Company for the quarter ended
March 31, 1995; (iii) the Quarterly Report on Form 10-Q of the Company for the
quarter ended June 30, 1995; and (iv) the Company's Current Report on Form 8-K
dated October 17, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Copies of the above documents (excluding exhibits) may be obtained upon
request without charge from the Company, 13155 Noel Road, Dallas, Texas
75240-5067; Attn: Mr. Robert L. Thompson, Comptroller, telephone (214) 715-4000.
2
<PAGE>
THE COMPANY
Oryx Energy Company (together with its consolidated subsidiaries, unless the
context otherwise requires, Company) engages exclusively in the exploration for
and the development and production of oil and gas. The Company has a strong base
of U.S. and international reserves and production primarily in the Gulf of
Mexico, the southwestern U.S., the U.K. North Sea and Ecuador. It also has
exploration and development projects in the Gulf of Mexico, the U.K. North Sea,
Kazakhstan, Australia and Algeria. The Company's business in the United States
is conducted through Sun Energy Partners, L.P. (Partnership), of which the
Company is the Managing General Partner. At December 31, 1994, the Company had a
98 percent ownership interest in the Partnership.
The Company was incorporated in Delaware in 1971. The Company's principal
executive office is located at 13155 Noel Road, Dallas, Texas 75240-5067 and the
telephone number is (214) 715-4000.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, including repayment of existing indebtedness,
capital expenditures and working capital requirements. Any specific allocation
of the net proceeds of an offering of Securities will be described in the
related Prospectus Supplement. The precise amount and timing of sales of the
Securities will be dependent on the Company's capital requirements and market
conditions and the availability and cost of other funds to the Company.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth the consolidated ratios of earnings to fixed
charges and earnings to fixed charges and preferred stock dividend requirements
for the Company for the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
SIX MONTHS ENDED ----------------------------------
JUNE 30, 1995 1994* 1993* 1992* 1991* 1990
----------------- ----- ----- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.................................... 1.52 -- -- -- -- 2.26
Ratio of earnings to fixed charges and preferred stock dividend
requirements......................................................... 1.52 -- -- -- -- 2.21
<FN>
- ------------------------
* Earnings were inadequate to cover fixed charges, or fixed charges and
preferred stock dividend requirements, by $97 million for 1994, $147 million
for 1993, $44 million for 1992 and $75 million for 1991.
</TABLE>
DESCRIPTION OF THE DEBT SECURITIES
The following sets forth certain general terms and provisions of the
indentures under which the Debt Securities are to be issued. The particular
terms of the Offered Debt Securities will be set forth in the Prospectus
Supplement relating to such Offered Debt Securities.
The Senior Debt Securities may be issued in one or more series under an
indenture dated as of September 15, 1988, as amended and supplemented by the
First Supplemental Indenture dated as of April 1, 1991 (Senior Indenture)
between the Company and The Bank of New York, as trustee (Senior Trustee). The
Subordinated Debt Securities may be issued in one or more series under an
indenture (Subordinated Indenture) between the Company and Bank of Montreal
Trust Company, as trustee (Subordinated Trustee).
The Senior Indenture and the Subordinated Indenture are sometimes
hereinafter collectively referred to as the Indentures. The Senior Trustee and
the Subordinated Trustee are sometimes hereinafter collectively referred to as
the Trustees.
Copies of the Indentures have been filed as exhibits to the Registration
Statement. The following summary of the material provisions of the Indentures is
subject to, and is qualified in its entirety by reference to, all provisions of
the Indentures and the Debt Securities, including the definitions therein of
certain terms.
3
<PAGE>
GENERAL PROVISIONS APPLICABLE TO BOTH INDENTURES
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued by the Company and provide that Debt Securities
may be issued from time to time in series. Unless otherwise specified in an
applicable Prospectus Supplement with respect to a series of Debt Securities,
the Debt Securities will be issued in registered form in denominations of $1,000
and any multiple thereof. The Debt Securities of any series will be issued
initially as either certificated notes or global notes, as specified in the
applicable Prospectus Supplement. Except as set forth under "Description of the
Debt Securities -- Book-Entry System," global notes will not be issuable as
certificated notes. Principal is to be payable, and the Debt Securities will be
transferable and exchangeable, at the office or agency of the Company maintained
for such purposes in New York City, which initially will be the Corporate Trust
Office of the applicable Trustee; PROVIDED that global notes will be
exchangeable only in the manner and to the extent set forth under "Book-Entry
System." The Debt Securities may be transferred, combined or divided without
payment of any charge other than taxes or other governmental charges. Payment of
interest may, at the option of the Company, be made by check mailed to such
registered holders.
Because the Company conducts substantially all of its operations through its
subsidiaries (including the Partnership), the Company's rights and the rights of
its creditors, including the holders of the Debt Securities, to participate in
the distribution of the assets of the subsidiaries of the Company, including the
Partnership, upon any liquidation or reorganization of any such subsidiary, or
otherwise, will be subject to the prior claims of creditors of such
subsidiaries, except to the extent that the Company may itself be a creditor
with recognized claims against any subsidiary. The ability of the Company to pay
principal and interest on the Debt Securities is, to a large extent, dependent
upon the payment to it of distributions, dividends, interest or other amounts by
its subsidiaries (including the Partnership).
The Prospectus Supplement will describe the following terms of the Offered
Debt Securities: (1) the title of the Offered Debt Securities; (2) any limit on
the aggregate principal amount of the Offered Debt Securities; (3) the date or
dates on which the Offered Debt Securities may be issued and are, or will be,
payable; (4) the rate or rates per annum (which may be fixed or variable) at
which the Offered Debt Securities will bear interest or the method by which such
rate or rates shall be determined and the date or dates from which such interest
will accrue; (5) the date or dates on which such interest on the Offered Debt
Securities will be payable and the record dates for the determination of holders
to whom interest is payable on any such interest payment dates; (6) each office
or agency where, subject to the terms of the applicable Indenture, the principal
of, and premium, if any, and any interest on the Offered Debt Securities will be
payable and each office or agency where, subject to the terms of the applicable
Indenture, the Offered Debt Securities may be presented for registration of
transfer or exchange; (7) the period or periods within which, the price or
prices at which, and the terms and conditions, if any, upon which the Offered
Debt Securities may be redeemed at the option of the Company; (8) the
obligation, if any, of the Company to redeem, to repay or purchase the Offered
Debt Securities pursuant to any sinking fund or analogous provisions or at the
option of a holder thereof and the period or periods within which, the price or
prices at which and the terms and conditions upon which the Offered Debt
Securities will be redeemed, repaid or purchased pursuant to any such
obligation; (9) in the case of Subordinated Debt Securities, whether and upon
what terms such Debt Securities will be convertible into Common Stock; (10)
whether the Offered Debt Securities are to be issued with original issue
discount within the meaning of Section 1273(a) of the Internal Revenue Code of
1986, as amended (Code), and the regulations thereunder; (11) any addition to,
or modification or deletion of, any Events of Default or covenants provided for
with respect to the Offered Debt Securities; (12) whether the Offered Debt
Securities are to be issued as certificated notes or global notes; (13) the
currency or currencies (including composite currencies) in which payments on the
Offered Debt Securities are to be made if other than U.S. dollars; and (14) any
other detailed terms and provisions of the Offered Debt Securities which are not
inconsistent with the applicable Indenture. Any such Prospectus Supplement will
also describe any special provisions for the payment of additional amounts with
respect to the Offered Debt Securities.
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a discount below their principal amount. Original Issue Discount
Securities means any Debt Securities issued with "original issue
4
<PAGE>
discount" within the meaning of Section 1273(a) of the Code and the regulations
thereunder. United States income tax and other considerations applicable to
Original Issue Discount Securities will be described in the Prospectus
Supplement relating thereto. Original Issue Discount Securities may provide for
the declaration of acceleration of the maturity of an amount less than the
principal amount thereof upon the occurrence of an Event of Default and the
continuation thereof.
BOOK-ENTRY SYSTEM
If so specified in the applicable Prospectus Supplement, a series of Offered
Debt Securities may be issued as global notes. Each global note will be
deposited with, or on behalf of, a depositary, which, unless otherwise specified
in the applicable Prospectus Supplement, will be The Depository Trust Company,
New York, New York (Depositary), and registered in the name of a nominee of the
Depositary. Certificated notes will not be exchangeable for global notes and,
except under the circumstances described below, global notes will not be
exchangeable for certificated notes and will not otherwise be issuable as
certificated notes.
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. The Depositary holds securities that its participants (Participants)
deposit with the Depositary. The Depositary also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. The Depositary is owned by a number of its direct participants
and by the New York Stock Exchange, Inc., the American Stock Exchange Inc. and
the National Association of Securities Dealers, Inc. Access to the Depositary
Trust Company system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a direct participant, either directly or indirectly. The Rules
applicable to the Depositary and its Participants are on file with the
Commission.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a global note to be deposited with or
on behalf of the Depositary will be represented by a global note registered in
the name of such depositary or its nominee. Upon the issuance of a global note
in registered form, the Depositary will credit, on its book-entry registration
and transfer system, the respective principal amounts of the Debt Securities
represented by such global note to the accounts of institutions that have
accounts with such depositary or its nominee (participants). The accounts to be
credited shall be designated by the underwriters or agents of such Debt
Securities or by the Company, if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in such global notes
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such global
notes will be shown on, and the transfer of that ownership interest will be
effected only through, records maintained by the Depositary or its nominee for
such global notes. Ownership of beneficial interests in global notes by persons
that hold through participants will be shown on, and the transfer of that
ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions 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 transfer
beneficial interests in a global note.
So long as the Depositary for a global note in registered form, or its
nominee, is the registered owner of such global note, such depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Debt Securities represented by such global note for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in such
global note will not be entitled to have Debt Securities of the series
represented by such global note registered in their names, will not receive or
be entitled to receive physical delivery of Debt Securities of such series in
definitive form and will not be considered the owner or holders thereof under
the applicable Indenture.
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Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by the Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the global note representing such Debt
Securities. None of the Company, the Trustee, any paying agent or the registrar
for such Debt 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 a global note for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company has been advised by the Depositary that, upon receipt of any
payment of principal, premium or interest in respect of any permanent global
note, the Depositary will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such global note as shown on the records of such
depositary. The Company also expects that payments by participants to owners of
beneficial interests in such global note 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," and will be the responsibility of such participants.
A global note may not be transferred except as a whole by the Depositary to
a nominee of such depositary or by a nominee of such depositary to such
depositary or another nominee of such depositary or by such depositary or any
such nominee to a successor of such depositary or a nominee of such successor.
If the Depositary is at any time unwilling or unable to continue as depositary
and a successor depositary is not appointed by the Company within ninety days,
the Company will issue certificated notes in definitive registered form in
exchange for the global note or Notes representing such Debt Securities. In
addition, the Company may at any time and in its sole discretion determine not
to have any Debt Securities in registered form represented by one or more global
notes and, in such event, will issue certificated notes in definitive form in
exchange for the global note or Notes representing such Debt Securities. In any
such instance, an owner of a beneficial interest in a global note will be
entitled to physical delivery in definitive form of certificated notes of the
series represented by such global note equal in principal amount to such
beneficial interest and to have such certificated notes registered in its name.
CONSOLIDATION, MERGER OR SALE
Nothing contained in the Indentures prevents any consolidation or merger of
the Company with or into any other corporation or corporations (whether or not
affiliated with the Company) or any sale or conveyance of all or substantially
all the property of the Company to any other corporation, provided that upon any
such consolidation, merger, sale or conveyance of or by the Company, other than
a consolidation or merger in which the Company is the continuing corporation,
the due and punctual payment of the principal of, and premium, if any, and
interest on, all of the Debt Securities, according to their tenor, and the due
and punctual performance and observance of all the covenants and conditions of
the Indentures and the Debt Securities to be performed by the Company, are
expressly assumed by the corporation formed by such consolidation, or into which
the Company shall have been merged, or by the corporation which shall have
acquired such property.
MODIFICATION OF THE INDENTURES
The Indentures contain provisions permitting the Company and the applicable
Trustee, with the consent of the holders of not less than 66 2/3 percent in
principal amount of the outstanding Debt Securities of each series affected, to
modify the applicable Indenture or any applicable supplemental indenture or the
rights of the holders of the Debt Securities of such series; provided that no
such modification shall without the consent of the holders of each outstanding
Debt Security affected thereby (a) change the fixed date upon which the
principal of or the interest on any Debt Security is due and payable, or reduce
the principal amount thereof or the rate of interest thereon or any amount
payable upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be payable upon a declaration of
acceleration of the maturity thereof, or change the place or places where, or
the currency in which, any Debt Security or any interest thereon is payable, or
impair the right to institute suit for the enforcement of any payment on or
after the date on which such is due (or, in the case of redemption, on or
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after the date fixed for redemption) or, in the case of Subordinated Debt
Securities, impair the right to convert such Debt Securities into Common Stock
or, in the case of Subordinated Debt Securities, modify the provisions of the
Subordinated Indenture with respect to the subordination of such Debt Securities
in a manner adverse to holders thereof or (b) reduce the aforesaid percentage of
Debt Securities, the consent of the holders of which is required for any
modification of the applicable Indenture or for waiver by the holders of certain
of their rights.
The Indentures also contain provisions permitting the Company and the
applicable Trustee to amend the applicable Indenture in certain circumstances
without the consent of the holders of any Debt Securities to evidence the merger
of the Company, or the replacement of the applicable Trustee and for certain
other purposes.
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series is defined
in the Indentures as being: default for 30 days in payment of any interest of
the Debt Securities of such series; default in payment of principal, including
the payment of principal when due pursuant to any redemption provision, of the
Debt Securities of such series; default for 90 days after written notice in
performance of any other covenant in the Indenture applicable to the Securities
of such series; provided, however, that such a default will not be an Event of
Default if it cannot with due diligence be cured within such 90-day period due
to causes beyond the control of the Company; default under any instrument
evidencing indebtedness for borrowed money, if indebtedness in excess of
$10,000,000 is thereby accelerated and such acceleration is not rescinded within
30 days after written notice is given to the Company by the applicable Trustee
or to the Company and the applicable Trustee by the holders of 25 percent or
more in aggregate principal amount of the Debt Securities of that series;
certain events of bankruptcy, insolvency, reorganization, receivership or
liquidation involving the Company, the Partnership, Sun Operating Limited
Partnership or Oryx U.K. Energy Company; or any other Event of Default provided
with respect to Debt Securities of that series. The Company will be required to
file with the applicable Trustee annually an officers' certificate as to the
absence of default in performance of certain covenants in the Indentures. The
Indentures provide that the applicable Trustee may withhold notice to the
holders of the Debt Securities of any default (except in payment of principal
of, or interest on, the Debt Securities) if such Trustee considers it in the
interest of the holders of the Debt Securities to do so. The Indentures provide
that, if an Event of Default with respect to the Debt Securities of any series
specified therein shall have happened and be continuing, either the applicable
Trustee or the holders of 25 percent or more in aggregate principal amount of
the Debt Securities of that series may declare the principal amount (or if the
Debt Securities are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms of that series of Debt Securities) of
all the Debt Securities and the interest accrued thereon to be due and payable
immediately, but if the Company shall cure all defaults (except the nonpayment
of principal of and accrued interest on Debt Securities which shall be become
due by acceleration) and certain other conditions are met, such declaration may
be annulled and past defaults may be waived by the holders of a majority in
aggregate principal amount of the Debt Securities of that series.
Subject to the provisions of the Indentures relating to the duties of the
Trustees, the Trustees will be under no obligation to exercise any of its rights
or powers under the Indentures at the request or direction on any of the holders
of the Debt Securities, unless such holders shall have offered to the applicable
Trustee reasonable indemnity. Subject to such provision for indemnification, the
holders of a majority in principal amount of the Debt Securities of a particular
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the applicable Trustee, or exercising
any trust or power conferred on the applicable Trustee with respect to the Debt
Securities of that series, provided that the applicable Trustee shall have the
right to decline to follow any such direction if such Trustee shall determine
that the action so directed conflicts with any law or the provisions of the
applicable Indenture or if such Trustee shall determine that such action would
involve such Trustee in personal liability or would be prejudicial to holders
not taking part in such direction.
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GOVERNING LAW
The Indentures and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
CONCERNING THE TRUSTEES
The Bank of New York is Senior Trustee under the Senior Indenture and has
been appointed by the Company as Registrar and Paying Agent with regard to the
Senior Debt Securities.
Bank of Montreal Trust Company is Subordinated Trustee under the
Subordinated Indenture and has been appointed by the Company as Registrar and
Paying Agent with regard to the Subordinated Debt Securities. Bank of Montreal
Trust Company and its affiliates have other customary banking relations with the
Company.
SENIOR INDENTURE PROVISIONS
GENERAL
The Senior Debt Securities will be senior obligations of the Company,
unsecured and unsubordinated to any other indebtedness of the Company. Because
the Company is a holding company, the Senior Debt Securities will be effectively
subordinated to the indebtedness (including trade payables) of the Company's
subsidiaries outstanding from time to time. As of June 30, 1995, the Company's
subsidiaries had aggregate indebtedness of $190 million outstanding to third
parties, including approximately $89 million of trade payables. The Senior
Indenture contains no restrictions on the ability of the Company or its
subsidiaries to incur additional indebtedness and except as set forth below, the
Senior Indenture contains no restrictions on the ability of the Company and its
subsidiaries to incur secured indebtedness.
LIMITATIONS ON LIENS
Nothing in the Senior Indenture or the Senior Debt Securities will in any
way limit the amount of indebtedness or securities (other than the Securities)
which may be incurred or issued by the Company or any of its subsidiaries. The
Senior Indenture provides that neither the Company nor any Restricted Subsidiary
(as defined below) will issue, assume or guarantee any notes, bonds, debentures
or other similar evidences of indebtedness for money borrowed (Debt) secured by
a mortgage, lien, pledge or other encumbrance (Mortgage) upon any Restricted
Property (as defined below) without effectively providing that the outstanding
Senior Debt Securities (together with, if the Company so determines, any other
indebtedness or obligation then existing or thereafter created, ranking equally
with the Senior Debt Securities) shall be secured equally and ratably with (or
prior to) such Debt so long as such Debt shall be so secured. This restriction
will not, however, apply to (a) Mortgages on property to secure all or part of
the cost of exploration, drilling or development thereof or all or part of the
cost of altering or repairing equipment used in connection therewith or (in the
case of property which is, in the opinion of the Board of Directors,
substantially unimproved for the use intended by the Company) all or part of the
cost of improvement thereof, or to secure Debt incurred to provide funds for any
such purpose; (b) Mortgages which secure only indebtedness owing by a Subsidiary
(as defined below) to the Company, or to one or more Subsidiaries, or to the
Company and one or more Subsidiaries; (c) Mortgages on the property of any
corporation or other entity existing at the time such corporation or entity
becomes a Subsidiary; (d) Mortgages on any property to secure Debt or other
indebtedness incurred in connection with the construction, installation or
financing of pollution control or abatement facilities or other forms of
industrial revenue bond financing or Debt issued or guaranteed by the United
States, any State or any department, agency or instrumentality of either; or (e)
any extension, renewal or replacement of any Mortgage referred to in the
foregoing clauses (a) through (d) or of any Mortgage existing on the date of
original issuance of the applicable series of Senior Debt Securities.
Notwithstanding the foregoing, the Company and any one or more Restricted
Subsidiaries may issue, assume or guarantee Debt secured by a Mortgage which
would otherwise be subject to the foregoing restrictions in an aggregate
principal amount which, together with the aggregate outstanding principal amount
of all other Debt of the Company and its Restricted Subsidiaries so secured, and
the aggregate value of the sale and lease-back transactions which would
otherwise be subject to the restrictions described under "Limitation on Sale and
Lease-Back," does not at the time such Debt is incurred exceed ten percent of
the Shareholders' Equity in the Company and its consolidated subsidiaries as
shown in the latest audited
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consolidated balance sheet of the Company. The following types of transactions,
among others, shall not be deemed to create Debt secured by Mortgages: (1) the
sale or other transfer of crude oil, natural gas or other petroleum hydrocarbons
in place for a period of time until, or in an amount such that, the transferee
will realize therefrom a specified amount (however determined) of money or such
crude oil, natural gas or other petroleum hydrocarbons or the sale or other
transfer of any other interest in property of the character commonly referred to
as a production payment or as an overriding royalty; and (2) Mortgages required
by any contract or statute in order to permit the Company or a Subsidiary to
perform any contract or subcontract made by it with or at the request of the
United States, any State or any department, agency or instrumentality of either,
or to secure partial, progress, advance or other payments to the Company or any
Subsidiary by such governmental unit pursuant to the provisions of any contract
or statute.
The Senior Indenture contains no limitations on Mortgages on property
acquired or constructed after the date of original issuance of the applicable
series of Senior Debt Securities or property owned which is not Restricted
Property. The term Restricted Property is defined to mean any interest owned on
the date of original issuance of the applicable series of Senior Debt Securities
by the Company or a Subsidiary in property situated in the United States (both
onshore and offshore) classified by such owner as productive of crude oil,
natural gas or other petroleum hydrocarbons in paying quantities as of the date
of issuance of the applicable series of Senior Debt Securities and any shares of
capital stock or indebtedness of a Restricted Subsidiary. The term Restricted
Subsidiary is defined to mean any Subsidiary (as defined below) of the Company
which owns Restricted Property. The term Subsidiary is defined to mean any
corporation, partnership, association, company, business trust or other entity
in which the Company directly or indirectly (i) owns or controls a majority of
the outstanding voting securities having by the terms thereof ordinary voting
power to elect a majority of the board of directors (or other body fulfilling a
substantially similar function) of such entity (irrespective of whether or not
at the time any other class or classes of such voting securities shall have or
might have voting power by reason of the happening of any contingency) or (ii)
in the case of an entity which does not have a board of directors (or other body
fulfilling a substantially similar function) has the authority to control the
policies of such entity (including any partnership of which the Company or a
Subsidiary is a managing general partner).
LIMITATION ON SALE AND LEASE-BACK
The Senior Indenture provides that neither the Company nor any Restricted
Subsidiary will enter into any arrangement with any person (other than the
Company or a Restricted Subsidiary) providing for the leasing to the Company or
a Restricted Subsidiary for a period of more than three years of any Restricted
Property which has been, or is to be, sold or transferred by the Company or such
Restricted Subsidiary to such person or to any person (other than the Company or
a Restricted Subsidiary) to which funds have been or are to be advanced by such
person on the security of the leased property unless either (a) the Company or
such Restricted Subsidiary would be entitled, pursuant to the provisions
described under "Limitations on Liens" above, to incur Debt in a principal
amount equal to or exceeding the value of such sale and lease-back transaction,
secured by a Mortgage on the property to be leased, without equally and ratably
securing the outstanding Senior Debt Securities, or (b) the Company, during or
immediately after the expiration of four months after the effective date of such
transaction, applies to the voluntary retirement of its indebtedness maturing by
its terms more than one year after the original creation thereof (Funded Debt)
an amount equal to the greater of the net proceeds of the sale or transfer of
the property leased in such transaction or the fair value in the opinion of the
Board of Directors of such property at the time of entering into such
transaction (in either case adjusted proportionately to reflect the remaining
term of the lease), less an amount equal to the sum of (i) the principal amount
of Senior Debt Securities delivered, within four months after the effective date
of such arrangement, to the Trustee for retirement and cancellation and (ii) the
principal amount of other Funded Debt voluntarily retired by the Company within
such four month period excluding retirements of Senior Debt Securities and other
Funded Debt as a result of conversions or pursuant to mandatory sinking fund or
mandatory prepayment provisions or by payment at maturity.
The Senior Indenture contains no limitations on the sale and lease-back of
property acquired or constructed after the date of original issuance of the
applicable series of Senior Debt Securities or of any property owned which is
not Restricted Property.
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Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Offered Debt Securities, the covenants applicable to the
Senior Debt Securities would not necessarily afford holders protection in the
event of a highly leveraged transaction, a sale of assets, an incurrance of
additional unsecured debt or other similar transactions involving the Company,
whether or not involving a downgrade in the ratings accorded to the Senior Debt
Securities by any nationally recognized statistical rating organization.
CONSOLIDATION, MERGER OR SALE
In addition to the provisions described above under "General Provisions
Applicable to Both Indentures -- Consolidation, Merger or Sale," the Senior
Indenture also provides that if, upon any consolidation or merger of the Company
with or into any other corporation or upon any sale or conveyance of all or
substantially all of its property to any other corporation, any of the property
of the Company or of any Subsidiary would thereupon become subject to any
mortgage, lien or pledge, the Company will before or at the time of such
consolidation, merger, sale or conveyance secure the Senior Debt Securities,
equally and ratably with any other obligations of the Company or any Subsidiary
then entitled thereto, by a direct lien on all such property prior to all liens
other than any liens already existing thereon.
DEFEASANCE
Unless otherwise specified in the Prospectus Supplement with respect to the
Offered Debt Securities of any series, the Company, at its option, (a) will be
Discharged (as defined in the Senior Indenture) from any and all obligations in
respect of any series of Senior Debt Securities (except in each case for certain
obligations to register the transfer or exchange of Senior Debt Securities,
replace stolen, lost or mutilated Senior Debt Securities, maintain paying
agencies and hold moneys for payment in trust) or (b) need not comply with
certain covenants of the Indenture described under "General Provisions
Applicable to Both Indentures " and "Senior Indenture Provisions" nor be subject
to the operation of the cross acceleration provisions described under "General
Provisions Applicable to Both Indentures -- Events of Default" or to the
provisions relating to redemption of the Senior Debt Securities of such series,
in each case, if the Company irrevocably deposits with the Senior Trustee, in
trust, money or U.S. Government Obligations (as defined in the Senior Indenture)
which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay
all the principal of and interest on the Senior Debt Securities on the dates
such payments are due in accordance with the terms of such series of Senior Debt
Securities. To exercise any such option, the Company is required to deliver to
the Senior Trustee an opinion of counsel or revenue ruling to the effect that
the holders will not recognize income, gain or loss for Federal income tax
purposes as a result of the deposit and related defeasance and will be subject
to Federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such defeasance had not occurred, and, in
the case of a Discharge pursuant to clause (a), if the issue of Senior Debt
Securities is then listed on the New York Stock Exchange, an opinion of counsel
that the deposit and related defeasance would not subject such Senior Debt
Securities to delisting.
SUBORDINATED INDENTURE PROVISIONS
GENERAL
The Subordinated Debt Securities will be unsecured, subordinated obligations
of the Company. The Subordinated Indenture will not limit the amount of other
indebtedness or securities which may be issued by the Company or any of its
subsidiaries.
CONVERSION RIGHTS
The Prospectus Supplement relating to the Offered Debt Securities will
provide whether any Subordinated Debt Securities will be convertible into shares
of Common Stock at any time on or prior to the maturity date of such
Subordinated Debt Securities and if so the initial conversion price at which
such Subordinated Debt Securities will be so convertible, except that if a
Subordinated Debt Security or portion thereof is earlier called for redemption,
the conversion right with respect thereto will terminate at the close of
business on the date fixed for redemption and will be lost if not exercised
prior to that time. Fractional
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shares of Common Stock will not be delivered upon conversion, but a cash
adjustment will be paid in respect of such fractional interests based on the
then current market price (as defined in the Subordinated Indenture) of Common
Stock on the last business day prior to the date of conversion.
The conversion price will be subject to adjustment upon certain events,
including (i) the issuance of Common Stock as a dividend or distribution on the
Common Stock; (ii) subdivisions or combinations of Common Stock; (iii) the
issuance to all holders of Common Stock of rights or warrants (expiring within
60 days after the record date for determining shareholders entitled to receive
them) entitling them to subscribe for or purchase Common Stock at less than the
then current market price (as defined in the Subordinated Indenture); and (iv)
the distribution to all holders of Common Stock or capital stock (other than
Common Stock), evidences of indebtedness of the Company, assets (excluding
regular periodic cash dividends at a rate which is substantially consistent with
past practice, including past practice with respect to increases in dividends),
or rights or warrants to subscribe for or purchase securities of the Company
(excluding the dividends, distributions, rights and warrants mentioned above).
Subordinated Debt Securities surrendered for conversion between a record
date for payment of interest and the next succeeding interest payment date
(unless such Subordinated Debt Securities are subject to redemption on a
redemption date in that period) must be accompanied by payment of an amount
equal to the interest thereon which is to be paid on such interest payment date.
Subject to the foregoing, no payments or adjustments will be made upon
conversion on account of accrued interest on the Subordinated Debt Securities or
for any dividends or distributions on any shares of Common Stock delivered upon
conversion. No adjustment of the conversion price will be required to be made in
any case until cumulative adjustments amount to one percent of such price. The
Company reserves the right to make such reductions in the conversion price, in
addition to those required in the foregoing provisions, as the Company in its
discretion shall determine to be advisable in order that certain stock-related
distributions hereafter made by the Company to its stockholders shall not be
taxable.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock, or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing, in exchange
for cash, property or services.
If at any time the Company makes a distribution of property to its
stockholders which would be taxable to such stockholders as a dividend for
federal income tax purposes (e.g. distributions of evidences of indebtedness or
assets of the Company but generally not stock dividends or rights to subscribe
to capital stock) and, pursuant to the antidilution provisions of the
Subordinated Indenture, the conversion price of the Subordinated Debt Securities
is reduced, such reduction may be deemed to be the receipt of taxable income by
holders of the Subordinated Debt Securities.
SUBORDINATION
The Subordinated Debt Securities will rank PARI PASSU with the Company's
outstanding 7 1/2% Convertible Subordinated Debentures Due 2014, but will be
subordinated and subject, to the extent and in the manner set forth in the
Subordinated Indenture, in right of payment to the prior payment in full of all
Senior Debt (as defined below) of the Company. No payment of principal
(including redemption and sinking fund payments) of, premium, if any, or
interest on, the Subordinated Debt Securities may be made if any Senior Debt is
not paid when due, any applicable grace period with respect to such default has
ended and such default has not been cured or waived, or if the maturity of any
Senior Debt has been accelerated because of a default. During the continuance of
any other event of default with respect to Senior Debt for which maturity may be
accelerated immediately and if the Subordinated Trustee has received written
notice on behalf of holders of such Senior Debt, the Company may not for 90 days
from receipt of such notice do anything which would be prohibited (as set out in
the immediately preceding sentence) if any Senior Debt has not been paid;
however, if the maturity of any such Senior Debt is not accelerated within 90
days following the due date of any payments prevented by such default and
notice, the Company may resume payments on the Subordinated Debt Securities. If
payment of the Subordinated Debt Securities is accelerated because of an Event
of Default, prompt notice must be given to holders of Senior Debt, and the
Company may not pay the
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Subordinated Debt Securities until 30 days after the acceleration occurs (Senior
Debt remaining outstanding) and thereafter may pay the Subordinated Debt
Securities only if the Subordinated Indenture otherwise permits. Upon any
distribution of assets of the Company to creditors upon any dissolution,
winding-up, liquidation or reorganization, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings, all principal of,
and premium, if any, and interest due or to become due on, all Senior Debt must
be paid in full before the holders of the Subordinated Debt Securities are
entitled to receive or retain any payment. The rights of the holders of the
Subordinated Debt Securities will be subrogated to the rights of the holders of
Senior Debt to receive payments or distributions applicable to Senior Debt until
all amounts owing on the Subordinated Debt Securities are paid in full. By
reason of such subordination, in the event of insolvency, creditors of the
Company who are holders of Senior Debt may recover more, ratably, than the
holders of the Subordinated Debt Securities, and creditors of the Company who
are not holders of Senior Debt or the Subordinated Debt Securities may recover
less, ratably, than holders of Senior Debt and may recover more, ratably, than
the holders of the Subordinated Debt Securities.
"Senior Debt" will be defined to mean the principal of, premium, if any,
interest on, and any other payment due pursuant to any of the following, whether
outstanding at the date of execution of the Subordinated Indenture or thereafter
incurred, created or assumed:
(a) all indebtedness of the Company for money borrowed (including any
indebtedness secured by a mortgage or other lien which is (i) given to
secure all or part of the purchase price of property subject thereto,
whether given to the vendor of such property or to another or (ii) existing
on property at the time of acquisition thereof);
(b) all indebtedness of the Company evidenced by notes, debentures,
bonds or other securities sold by the Company for money;
(c) all lease obligations of the Company which are capitalized on the
books of the Company in accordance with generally accepted accounting
principles;
(d) all indebtedness of others of the kinds described in either of the
preceding clauses (a) or (b) and all lease obligations of others of the kind
described in the preceding clause (c) assumed by or guaranteed in any manner
by the Company or in effect guaranteed by the Company through an agreement
to purchase, contingent or otherwise;
(e) all obligations of the Company with respect to letters of credit
issued in connection with indebtedness of others of the kind described in
the preceding clauses (a) or (b) or leased obligations of the kind described
in the preceding clause (c); and
(f) all renewals, extensions or refundings of indebtedness of the kinds
described in any of the preceding clauses (a), (b) and (d), all renewals or
extensions of lease obligations of the kinds described in either of the
preceding clauses (c) and (d) and all renewals or extensions of obligations
with respect to letters of credit of the kind described in the preceding
clause (e);
unless, in the case of any particular indebtedness, lease obligation, renewal,
extension, refunding or obligations with respect to letters of credit, the
instrument or lease creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, lease,
obligation, renewal, extension or refunding is not superior in right of payment
to or is PARI PASSU with the Subordinated Debt Securities.
At September 30, 1995, Senior Debt totalled $1,120 million (not including
accrued interest). The Subordinated Indenture does not limit the amount of
Senior Debt which the Company may incur.
DESCRIPTION OF CAPITAL STOCK
The Company has 280,000,000 authorized shares of stock, consisting of (i)
250,000,000 shares of Common Stock having a par value of $1.00 per share, (ii)
15,000,000 shares of Cumulative Preference Stock (Preference Stock) having a par
value of $1.00 per share, and (iii) 15,000,000 shares of Preferred Stock having
a par value of $1.00 per share. At September 30, 1995, there were 104,421,176
shares of Common
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Stock outstanding. There are two series of Preference Stock designated, none of
which were outstanding at September 30, 1995. Of the Series A Preference Stock,
120,000 shares were designated and reserved for issuance upon exercise of the
Stock Purchase Rights (Rights). The Preferred Stock was authorized by vote of
the shareholders on May 5, 1992 and there are currently no shares of Preferred
Stock designated or outstanding. In addition, on September 30, 1995 the Company
had reserved for issuance 5,111,438 shares of Common Stock on conversion of the
outstanding 7 1/2 % Convertible Subordinated Debentures Due 2014 and 2,842,842
shares of Common Stock upon the exercise of outstanding management options.
The following summary description of the Company's capital stock is subject
to the detailed provisions of the Company's Restated Certificate of
Incorporation (Certificate), a copy of which has been filed as an exhibit to the
Registration Statement.
COMMON STOCK
VOTING. Each share of Common Stock entitles its record owner to one vote on
all matters submitted to the stockholders for action. The stockholders are not
entitled to cumulative voting rights in the election of directors.
DIVIDENDS. Subject to the rights of holders of any class of Preference
Stock or Preferred Stock, the holders of Common Stock are entitled to share
ratably in dividends in such amount as may be declared by the Company's Board of
Directors (Board) from time to time out of funds legally available therefor. The
payment of dividends on the Common Stock is restricted under the Company's
Revolving Credit and Term Loan Agreement to no more than $1.20 per share
annually, and is prohibited in the event of a default.
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS. The Company is covered
by Section 203 of the Delaware General Corporation Law which provides that a
corporation shall not engage in any business combination with an "interested
stockholder" for a period of three years following the date that such
stockholder became an interested stockholder unless (1) prior to such date the
board of directors of the corporation approved either the business combination
or the transaction which resulted in the stockholder becoming an interested
stockholder, (2) upon consummation of such transaction, the interested
stockholder owned at least 85 percent of the voting stock of the corporation
outstanding at the time, excluding certain shares owned by directors, officers
and employees of the corporation, or (3) on or subsequent to such date the
business combination is approved by the board of directors and authorized at a
meeting of stockholders by the affirmative vote of the holders of at least
two-thirds of the outstanding voting stock other than the interested
stockholder. "Interested stockholder" is defined as any person that is the owner
(by itself or with affiliates) of 15 percent or more of the outstanding voting
stock of the corporation.
FAIR PRICE PROVISION. Under the Certificate, a business combination
involving the Company and a related person (defined as a holder of more than ten
percent of the voting stock of the Company) must provide that the price paid all
stockholders in such a transaction will be at least equal in value to the
highest price per share previously paid by the related person in acquiring any
of its shares of voting stock unless such transactions has been approved by: (1)
holders of at least 75 percent of the outstanding shares of voting stock held by
shareholders other than related persons; or (2) two-thirds of the Continuing
Directors (defined as the directors of the Company serving immediately prior to
the time the related person acquired its ten percent interest). As a practical
matter, if a business combination is not approved by the Continuing Directors, a
vote of 75 percent of the outstanding shares of voting stock held by
shareholders other than the related persons may not be obtainable. The
provisions described in this paragraph may only be changed, amended, altered or
repealed by the affirmative vote of at least 75 percent of the votes entitled to
be cast by the stockholders.
PREVENTION OF GREENMAIL. The Certificate prohibits the Company from
purchasing or agreeing to purchase any of its equity securities, at a price in
excess of fair market value, from any holder of five percent or more of any
class of voting stock (excluding any person who held such amounts on November 1,
1988 and who was also a holder of five percent of the outstanding shares of Sun
Company, Inc. common stock on July 6, 1988) who has beneficially owned such
securities for less than two years. However, such a transaction may be
consummated if approved by holders of at least a majority of the Company's
voting stock, excluding
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such five percent holder. This stockholder approval requirement, however, would
not apply to any acquisition by the Company of its equity securities (i) as part
of a tender or exchange offer available on the same terms to all other holders
of securities of the same class as such securities, (ii) as part of an open
market purchase program, and not the result of a privately negotiated
transaction, or (iii) as the result of the redemption of securities which have
terms providing for such redemption. The provisions described in this paragraph
may only be changed, amended, altered or repealed by the affirmative vote of at
least 75 percent of the votes entitled to be cast by the stockholders (excluding
any shares held by any holder of five percent or more of the Common Stock).
BOARD OF DIRECTORS. The Certificate provides that (i) the Board is
classified into three classes, (ii) the number of directors comprising the Board
is to be fixed from time to time by the Board at not less than five nor more
than 11, which number is presently fixed at nine, and (iii) the term of office
of each class expires in consecutive years so that only one class is elected in
each year. The provisions described in this paragraph may only be changed,
amended, altered or repealed by the affirmative vote of at least 75 percent of
the votes entitled to be cast by the stockholders. Because the Board is
classified, under Section 141 of the Delaware General Corporation Law
stockholders may remove directors only for cause.
LIQUIDATION RIGHTS. The holders of Common Stock are entitled to receive pro
rata the assets of the Company legally available for distribution to such
stockholders upon liquidation or dissolution.
OTHER. The shares of Common Stock presently outstanding are, and any shares
of Common Stock to be offered under a Supplemental Prospectus to this Prospectus
will be validly issued, fully paid and nonassessable. The Common Stock is not
redeemable and has no preemptive, exchange or conversion rights.
TRANSFER AGENT AND REGISTRAR. The Transfer Agent and Registrar of the
Common Stock is Chemical Bank, New York, New York.
PREFERRED STOCK
The Board is authorized by the Certificate to issue Preferred Stock in one
or more series and to fix for each such series such qualifications, privileges,
limitations, options, conversion rights, and other special rights as are stated
and adopted by the Board and as are permitted by the Certificate and the
Delaware General Corporation Law, including the designation and number of shares
issuable, the dividend rate, voting rights, conversion rights, redemption and
sinking fund provisions, and liquidation values of each such series. The
particular terms of any series of Offered Preferred Stock will be set forth in
the Prospectus Supplement relating to such Offered Preferred Stock.
Subject to the rights of holders of any class of Preference Stock, the
holders of Preferred Stock are entitled to receive dividends, when and as
declared by the Board out of funds legally available for that purpose. As to
dividends and rights upon liquidation, dissolution or winding up, the Preferred
Stock will rank junior and subordinate to any series of Preference Stock and
prior to the Common Stock.
PREFERENCE STOCK
The Board is authorized by the Certificate to issue Preference Stock in one
or more series and to fix for each such series such qualifications, privileges,
limitations, options, conversion rights, and other special rights as are stated
and adopted by the Board and as are permitted by the Certificate and the
Delaware General Corporation Law, including the designation and number of shares
issuable, the dividend rate, voting rights, conversion rights, redemption and
sinking fund provisions, and liquidation values of each such series.
Holders of Preference Stock are entitled to receive, when and as declared by
the Board out of assets legally available for that purpose, annual cumulative
dividends payable in quarterly installments. Unless full cumulative dividends on
the Preference Stock have been paid, no dividend may be declared or paid on, or
other distributions made upon, Preferred Stock or Common Stock, nor may any
Preferred Stock or Common Stock be redeemed or purchased by the Company.
Subject to certain conditions, the Company may redeem all or any part of the
Preference Stock then outstanding.
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If the equivalent of six quarterly dividends on the Preference Stock are
unpaid, the number of directors of the Company will be increased by two, and the
holders of the Preference Stock, voting as a class, will be entitled to select
the additional two directors until all dividends in arrears have been paid or
declared and set aside for payment. At such time, the additional two directors
will cease to serve as directors and the number of directors will decrease by
two.
The affirmative vote or consent of holders of at least two-thirds of
outstanding shares of Preference Stock is necessary for the Company to alter or
change certain preferences or rights or to create any class of stock ranking
prior to or on a parity with the Preference Stock.
On September 11, 1990, the Company issued 7,259,394 shares of Series B
Preference Stock to an agent of the Glenmede Trust Company (Glenmede) as trustee
for various charitable trusts, as partial consideration for the repurchase of
all of the Common Stock held by Glenmede for those charitable trusts. By
September 30, 1995, all shares of Series B Preference Stock outstanding had been
converted into Common Stock on a share-for-share basis by the holder in
accordance with the terms thereof.
RIGHTS
On September 11, 1990, the Board declared a dividend distribution of one
Stock Purchase Right on each outstanding share of Common Stock, payable
September 28, 1990 to holders of record of the Common Stock on that date. The
Rights are also issuable upon the issuance of additional shares of Common Stock
prior to the time the Rights are redeemed or expire. Accordingly, the Rights
will also be issued to holders of Common Stock purchased in an offering of
Common Stock under a Prospectus Supplement. Initially, the Rights are
represented by the certificates for the Common Stock and will trade only with
the Common Stock. The Rights will expire September 11, 2000 unless earlier
redeemed by the Company. Unless the Rights are earlier redeemed, if the Company
is (i) acquired in a merger or other business combination transaction or (ii) 50
percent or more of the Company's assets or earning power is sold or transferred
or if a person or group (with certain exceptions relating to affiliates of the
Company) acquires beneficial ownership of 20 percent or more of the outstanding
Common Stock (collectively, Acquisition Events), each Right will entitle its
holder (other than such a person or group) to purchase, at the then current
exercise price, a number of shares of the acquiring Company's common stock, or
of the Common Stock of the Company, as the case may be, that would have a market
value of twice the exercise price. In addition, unless the Rights are earlier
redeemed, if a person or group is determined by the Board to have intentions
toward the Company that are not in the long-term best interests of the Company
or the Company's stockholders and that person or group has or acquires
beneficial ownership of a percentage of common stock of the Company in excess of
the ownership limitation applicable to such person or group (which cannot be
less than 10 percent) as set by the Board (Triggering Event), each Right will
entitle its holder (other than such person or group) to purchase, at the then
current exercise price, a number of shares of the Common Stock of the Company
that would have a market value equal to twice the exercise price multiplied by a
fraction, the numerator of which is 20 percent and the denominator of which is
the applicable ownership limitation. Alternatively, upon the occurrence of the
foregoing, the Company can, at its discretion, exchange the Rights for one-half
the number of shares for which the Rights would otherwise have been exercisable.
With the approval of the Board (but in certain circumstances only with the
consent of certain directors who were in office on September 10, 1990, or whose
nomination or election as a director was approved by such directors) the Company
can redeem the Rights at any time, at a redemption price of $.01 per share,
subject to adjustment, before the occurrence of an Acquisition Event or a
Triggering Event.
The Rights may have certain anti-takeover effects. However, the Board
believes that the Rights will assist in countering takeover tactics the Board
deems unfair and enhance its ability to negotiate with any potential acquiror of
the Company.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in four ways: (i)
through agents, (ii) through underwriters, (iii) through dealers and (iv)
directly to certain purchasers.
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Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered, will
be named, and any commissions payable by the Company to such agent set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment. Agents may be entitled under agreements which may be entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act.
If any underwriters are utilized in the sale, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement, which will be used by the underwriters to make
resales of the Securities in respect of which this Prospectus is delivered to
the public. The underwriters may be entitled, under the relevant underwriting
agreement, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and to reimbursement by the
Company for certain expenses.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale. Dealers
may be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and to reimbursement by the
Company for certain expenses.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase Offered Securities from the Company at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject to only those conditions set forth in the Prospectus
Supplement and the Prospectus Supplement will set forth the commission payable
for solicitation of such offers.
Certain of the underwriters, agents or dealers and their associates may be
customers or engage in transactions with and perform services for the Company in
the ordinary course of business.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York, New York, and for any
underwriters, dealers or agents by Milbank, Tweed, Hadley & McCloy, New York,
New York.
INDEPENDENT ACCOUNTANTS
The consolidated balance sheets as of December 31, 1994 and 1993, and the
consolidated statements of income, cash flows and changes in shareholders'
equity for each of the three years in the period ended December 31, 1994,
incorporated by reference in this Prospectus, have been included herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in auditing and accounting.
With respect to the unaudited interim financial information for the periods
ended June 30 and March 31, 1995 and 1994, incorporated by reference in this
Prospectus, the independent accountants have reported that they have applied
limited procedures in accordance with professional standards for a review of
such information. However, their separate reports included in the Company's
Quarterly Reports on Form 10-Q for the six- and three-month periods ended June
30 and March 31, 1995 and incorporated by reference herein, state that they did
not audit and they do not express an opinion on the interim financial
information. Accordingly, the degree of reliance on their reports on such
information should be restricted in light of the limited nature of the review
procedures applied. The accountants are not subject to the liability
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<PAGE>
provisions of Section 11 of the Securities Act for their reports on the
unaudited interim financial information because such reports are not "reports"
or "parts" of the Registration Statement prepared or certified by the
accountants within the meaning of Section 7 and 11 of the Securities Act.
Any financial statements and schedules hereafter incorporated by reference
in the Registration Statement of which this Prospectus is a part that have been
audited and are the subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon the authority
of such firms as experts in accounting and auditing to the extent covered by
consents filed with the Commission.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
The Company................................... S-2
Use of Proceeds............................... S-2
Recent Developments........................... S-2
Description of Notes.......................... S-2
Underwriting.................................. S-3
Legal Matters................................. S-4
PROSPECTUS
Available Information......................... 2
Incorporation of Documents by Reference....... 2
The Company................................... 3
Use of Proceeds............................... 3
Consolidated Ratio of Earnings to Fixed
Charges...................................... 3
Description of the Debt Securities............ 3
Description of Capital Stock.................. 12
Plan of Distribution.......................... 15
Legal Matters................................. 16
Independent Accountants....................... 16
</TABLE>
$150,000,000
[LOGO]
ORYX ENERGY
COMPANY
8 3/8% NOTES
DUE JULY 15, 2004
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PROSPECTUS SUPPLEMENT
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Chase Securities Inc.
UBS Securities
BA Securities, Inc.
BZW Securities Inc.
NatWest Capital Markets Limited
Nesbitt Burns Securities Inc.
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