As filed with the Securities and Exchange Commission on October 18, 1999
File No. 333-88661
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------------
AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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CHIEFTAIN INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Alberta, Canada 1311 None
(State of (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Classification Identification Number)
Incorporation or Organization Code Number)
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1201 TD Tower
10088-102 Avenue
Edmonton, Alberta T5J 2Z1
Canada
(780) 425-1950
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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John L. Roach, Inc.
4150 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
(214) 922-9850
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent for Service in the United States)
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Copies to:
Thomas R. Brome John S. Burns, Q.C.
Cravath, Swaine & Moore Bennett Jones
825 Eighth Avenue 4500 Bankers Hall East
New York, New York 10019 855-2nd Street S.W.
(212) 474-1000 Calgary, AB T2P 4K7
(403) 298-3100
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Approximate date of commencement of proposed sale to
the public: As soon as practicable after the effective date
of this Registration Statement.
If any of the securities being registered on this form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), 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, 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 this form is a post-effective amendment filed pursuant to Rule
462(d) 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. [ ]
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<PAGE>
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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Subject to Completion, dated October 18, 1999
Preliminary Prospectus
The information contained in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted.
$300,000,000
[LOGO]
Chieftain International, Inc.
Common Shares, Preferred Shares,
Debt Securities and Warrants
- ------------------------------------------------------------------------------
We will offer and sell from time to time Chieftain common shares, preferred
shares, debt securities, or warrants. We will provide specific terms of these
securities in supplements to this prospectus. The terms of the securities will
include the initial offering price, aggregate amount of the offering, listing
on any securities exchange or quotation system, risk factors and the agents,
dealers or underwriters, if any, to be used in connection with the sale of
these securities. You should read this prospectus and any supplement together
with any and all documents incorporated by reference herein and in any
supplement carefully before you invest.
Our common shares are listed on the American Stock Exchange and The Toronto
Stock Exchange under the symbol "CID."
Investing in our securities involves risks. See "Risk Factors" on page 6.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus is October , 1999
<PAGE>
You should rely only on the information we have included or incorporated by
reference in this prospectus. We have not authorized anyone to provide you
with additional or different information. If you receive any unauthorized
information, you must not rely on it. We are offering to sell the securities
only in jurisdictions where sales are permitted. You should not assume that
the information we have included in this prospectus is accurate as of any date
other than the date of this prospectus or that any information we have
incorporated by reference is accurate as of any date other than the date of
the document incorporated by reference.
Table of Contents
Page
About This Prospectus..................................................... 3
Enforcement of Civil Liabilities.......................................... 3
Where You Can Find More Information....................................... 3
Forward Looking Statements................................................ 4
Chieftain................................................................. 5
Risk Factors.............................................................. 6
Ratios of Earnings to Fixed Charges....................................... 9
Use of Proceeds........................................................... 9
Description of Share Capital.............................................. 10
Description of Debt Securities............................................ 15
Description of Warrants................................................... 21
Plan of Distribution...................................................... 24
Legal Matters............................................................. 25
Experts................................................................... 25
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About This Prospectus
This prospectus is part of a registration statement that we filed with the SEC
using a "shelf" registration process. Under the shelf registration process, we
may sell any combination of the securities described in this prospectus in one
or more offerings up to a total dollar amount of $300,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus
supplement, together with additional information described under the heading
"Where You Can Find More Information."
As used in this prospectus, "Chieftain," "we," "us," and "our" refer to
Chieftain International, Inc., a company organized under the laws of the
Province of Alberta, Canada, and its subsidiaries.
Enforcement of Civil Liabilities
We are a corporation organized in Canada under the Business Corporations Act
(Alberta). Most of our directors and officers are not residents of the United
States, and all or a substantial portion of the assets of our directors and
officers are located outside of the United States. As a result, it may be
difficult for holders of the common shares to effect service of process within
the United States upon those directors and officers who do not reside in the
U.S., or enforce against them in the U.S. courts judgments obtained in U.S.
courts predicated upon the civil liability provisions under U.S. federal
securities laws. We have been advised by our Canadian counsel, Bennett Jones,
that there is doubt as to whether, in original actions or actions for
enforcement judgments of U.S. courts, liabilities predicated solely upon U.S.
federal securities laws are enforceable in Canada against us or any of our
directors or officers or the experts named herein, who are not residents of
the United States.
Where You Can Find More Information
We are subject to the informational requirements of the Securities Exchange
Act of 1934, which requires us to file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any
document that we file at the Public Reference Room of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800- SEC-0330
for further information on the operation of its public reference room. You may
also inspect our filings at the regional offices of the SEC located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, New York, New York 10048 or over the Internet at the
SEC's web site at http://www.sec.gov.
This prospectus constitutes part of a registration statement on Form S-3 filed
with the SEC under the Securities Act of 1933. It omits some of the
information contained in the registration
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statement, and reference is made to the registration statement for further
information with respect to us and the securities we are offering. Any
statement contained in this prospectus concerning the provisions of any
document filed as an exhibit to the registration statement or otherwise filed
with the SEC is not necessarily complete, and in each instance reference is
made to the copy of the filed document.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information and the
information in the prospectus. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Act of 1934:
1. Our Annual Report on Form 10-K for the year ended December 31, 1998.
2. Our Proxy Statement dated March 11, 1999 filed with the SEC on
April 7, 1999.
3. Our Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31 and June 30, 1999.
4. The description of our common shares contained in our registration
statement on Form 8-A, dated April 7, 1989, as amended on April 12,
1989, and any subsequent amendment or report filed before or after
the date of this prospectus for the purpose of updating the
description.
You may request a copy of these filings at no cost, by writing or telephoning
Esther S. Ondrack, Senior Vice President and Secretary, Chieftain
International, Inc., 1201 TD Tower, 10088 - 102 Avenue, Edmonton, Alberta,
Canada T5J 2Z1, telephone number (780) 425-1950.
Forward Looking Statements
Some of the information included in this prospectus and in the documents we
have incorporated by reference contains, and any prospectus supplement may
contain, forward-looking statements. Forward-looking statements use
forward-looking terms such as "believe", "may", "intend", "will", "project",
"budget", "should" or "anticipate" or other similar words. These statements
discuss "forward-looking" information such as:
o anticipated capital expenditures and budgets;
o future cash flows and borrowings; and
o pursuit of potential future acquisition or drilling opportunities.
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These forward-looking statements are based on assumptions that we believe are
reasonable, but they are open to a wide range of uncertainties and business
risks, including the following:
o fluctuations of the prices received or demand for oil and natural
gas;
o uncertainty of drilling results, reserve estimates and reserve
replacement;
o operating hazards;
o acquisition risks;
o unexpected substantial variances in capital requirements;
o environmental matters;
o Year 2000 computer related interruptions; and
o general economic conditions.
Other factors that could cause actual results to differ materially from those
anticipated are discussed in our periodic filings with the SEC, including our
Annual Report on Form 10-K for the year ended December 31, 1998.
When considering these forward-looking statements, you should keep in mind the
risk factors and other cautionary statements in this prospectus and in the
documents we have incorporated by reference. We will not update these
forward-looking statements unless the securities laws require us to do so.
Chieftain
Chieftain International, Inc. is an independent energy company engaged in the
exploration, development and production of natural gas and oil. Our producing
properties and exploration acreage are primarily located in the shallow waters
of the U.S. Gulf of Mexico. We also have properties located onshore in
Louisiana, southeast Utah and the United Kingdom sector of the North Sea.
We have assembled a large oil and gas lease acreage position in the Gulf of
Mexico. Our lease interests in the Gulf of Mexico include a balanced portfolio
of exploration and development drilling prospects. These prospects range from
high-impact prospects with relatively greater risks, which we believe have the
potential to add substantially to our reserves, to relatively lower risk
development and exploitation projects. Our exploration efforts are supported
by an extensive 3-D seismic library covering most of our leases. We believe
that our seismic database and related technological expertise have contributed
to our successful exploration and development track record. We believe our
conservative use of debt and our management of cash enable us to better take
advantage of our prospects and other opportunities, including acquisitions of
exploratory and producing property.
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Risk Factors
An investment in our securities involves significant risks. You should
carefully consider the following risk factors before you decide to buy any of
our securities. You should also carefully read and consider all of the
information we have included, or incorporated by reference, in this prospectus
before you decide to buy any of our securities.
If we cannot replace our reserves, our production and financial condition will
suffer.
Unless we successfully replace our reserves, our production will decline,
resulting in lower revenues and cash flow. Replacing our reserves is
particularly important because most of our reserves at December 31, 1998 are
in the Gulf of Mexico where wells normally have steeper rates of decline than
onshore wells. Reduced reserves may also make borrowing and raising equity
more difficult. In response to lower oil and natural gas prices, our capital
expenditures in 1999 are expected to be $55 million, compared to $92.6 million
in 1998. At this level of capital expenditures, it is more difficult to
replace our reserves. Furthermore, for the reasons discussed below, even if
capital is spent on drilling or to make acquisitions, such efforts have a risk
of being unsuccessful.
Drilling wells is speculative and capital intensive.
Exploring for oil and natural gas and developing oil and natural gas
properties require significant capital expenditures and involve a high degree
of financial risk. The budgeted costs of drilling, completing and operating
wells are often exceeded and can increase significantly when drilling costs
rise and supply tightens. Drilling may be unsuccessful for many reasons,
including weather, cost overruns, equipment shortages and mechanical
difficulties. Moreover, the successful drilling of an oil or gas well does not
ensure a profit on investment. Exploratory wells bear a much greater risk of
loss than development wells. A variety of factors, both geological and
market-related, can cause a well to become uneconomic or only marginally
economic. In addition to their costs, unsuccessful wells can hurt our efforts
to replace reserves.
Reserves on properties we buy may not meet our expectations and could change
the nature of our business.
Property acquisition decisions are based on various assumptions and subjective
judgments that are speculative. Although available geological and geophysical
information can provide information about the potential of a property, it is
impossible to predict accurately a property's production and profitability.
In addition, we may have difficulty integrating future acquisitions into our
operations, and they may not achieve our desired profitability objectives.
Likewise, as is customary in the industry, we generally acquire oil and gas
acreage without any warranty of title except through the transferor. In some
instances, title opinions are not obtained if, in our judgment, it would be
uneconomical or impractical to do so. Losses may result from title defects or
from defects in the assignment of leasehold rights. While our current
operations are primarily in shallow waters of the U.S. Gulf of Mexico
(offshore Texas and Louisiana), we may pursue acquisitions or
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properties located in other geographic areas, which would decrease our
geographical concentration.
Estimates of our proved reserves are uncertain, and our revenues from
production may vary significantly from estimated amounts.
The quantities and values of our proved reserves included in this prospectus
are only estimates and are subject to numerous uncertainties. Estimates by
other engineers might differ materially. The accuracy of any reserve estimate
is a function of the quality of available data and of engineering and
geological interpretation. These estimates depend on assumptions regarding
quantities and production rates of recoverable oil and natural gas reserves,
future prices for oil and natural gas, timing and amounts of development
expenditures and operating expenses, all of which will vary from those assumed
in our estimates. These variances may be significant.
Any significant variance from the assumptions used could result in the actual
amounts of oil and natural gas ultimately recovered and future net cash flows
being materially different from the estimates in our reserve reports. In
addition, results of drilling, testing, production and changes in prices after
the date of the estimate may result in substantial downward revisions. These
estimates may not accurately predict the present value of net cash flows from
oil and natural gas reserves.
At December 31, 1998, approximately 30% of our estimated proved reserves were
undeveloped. Recovery of undeveloped reserves generally requires additional
capital expenditures and successful drilling operations. The reserve data
assumes that we can and will make these expenditures and conduct these
operations successfully, which may not occur.
We do not insure against all potential losses and could be seriously harmed by
unexpected liabilities.
Exploration for and production of oil and natural gas can be hazardous,
involving natural disasters and other unforeseen occurrences such as blowouts,
cratering, fires and loss of well control, which can damage or destroy wells
or production facilities, injure or kill people, and damage property and the
environment. Because third party drilling contractors are used to drill our
wells, we may not realize the full benefit of worker's compensation laws in
dealing with their employees. We maintain insurance against many potential
losses and liabilities arising from our operations. However, in accordance
with customary industry practice, we may not be fully insured against these
risks, nor may all such risks be insurable.
Governmental regulations are costly and complex, especially regulations
relating to environmental protection.
Our U.S. exploration, production and marketing operations are regulated
extensively at the federal, state and local levels. These regulations affect
the costs, manner and feasibility of our operations. As an owner and operator
of oil and gas properties, we are subject to federal, state and local
regulation of discharge of materials into, and protection of, the environment.
We have made and will continue to make significant expenditures in our efforts
to comply with the
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requirements of these environmental regulations, which may impose
liability on us for the cost of pollution clean-up resulting from operations,
subject us to liability for pollution damage and require suspension or
cessation of operations in affected areas. Changes in, or additions to,
regulations regarding the protection of the environment could increase our
compliance costs and may negatively impact our business.
We are subject to state and local regulations that impose permitting,
reclamation, land use, conservation and other restrictions on our ability to
drill and produce. These laws and regulations can require well and facility
sites to be closed and reclaimed. We buy and sell interests in properties that
have been operated in the past, and, as a result of these transactions, we may
retain or assume clean-up or reclamation obligations for our own operations or
those of third parties.
U.S. offshore oil and gas operations are subject to regulations of the United
States Department of the Interior, which currently impose absolute liability
upon the lessee under a federal lease for the cost of pollution clean-up
resulting from the lessee's operations, and could subject the lessee to
possible liability for pollution damage. In the event of a serious incident of
pollution, a lessee under a federal lease may be required to suspend or cease
operations in the affected area.
In the United Kingdom, deposits of substances or articles at sea from offshore
oil and gas operations are subject to the licensing control of the Ministry of
Agriculture, Fisheries and Food. The breach of a license will result in
criminal liability and possible civil liability for the cost of any resulting
pollution clean-up. In the event of a serious incident of pollution, the
Ministry may vary or revoke a license.
We may have difficulty competing for oil and gas properties or supplies.
We operate in a highly competitive environment, competing with major
integrated and independent energy companies for desirable oil and gas
properties, as well as for the equipment, labor and materials required to
develop and operate those properties. Many of these competitors have financial
resources substantially greater than ours. We may incur higher costs or be
unable to acquire and develop desirable properties at costs we consider
reasonable because of this competition.
Our shareholder rights plan and by-laws discourage unsolicited takeover
proposals and could prevent you from realizing a premium for your common
shares.
We have a shareholder rights plan that may have the effect of discouraging
unsolicited takeover proposals. The rights issued under the shareholder rights
plan would cause substantial dilution to a person or group that attempts to
acquire us on terms not approved in advance by our board of directors. In
addition, our articles of incorporation and by-laws contain provisions that
may discourage unsolicited takeover proposals that shareholders may consider
to be in their best interests which include:
o provisions that members of the board of directors are elected and
retire in rotation; and
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o the ability of the board of directors to designate the terms of, and
to issue new series of, preferred shares.
Together, these provisions and our shareholder rights plan may discourage
transactions that otherwise could involve payment to you of a premium over
prevailing market prices for your common shares.
Ratios of Earnings to Fixed Charges
The following table sets forth our consolidated ratio of earnings to
fixed charges or the deficiency of our consolidated earnings to cover fixed
charges for each period indicated.
<TABLE>
<CAPTION>
Six Months Years Ended December 31,
Ended ------------------------
June 30, 1999 1998 1997 1996 1995 1994
------------ ---- ---- ---- ---- ----
(U.S. $ in thousands except ratios)
<S> <C> <C> <C> <C> <C> <C>
Canadian Generally Accepted
Accounting Principles
Ratio of Earnings to
Fixed Charges........................ - - 2.1 2.0 - -
Deficiency of Earnings to
Cover Fixed Charges.................. $20,820 $12,157 - - $ 4,551 $21,757
U.S. Generally Accepted
Accounting Principles(1)
Ratio of Earnings to
Fixed Charges........................ - - 2.5 2.3 - -
Deficiency of Earnings to
Cover Fixed Charges.................. $20,026 $98,013 - - $12,337 $20,798
</TABLE>
- ---------------
(1) See Note 11 to the audited consolidated financial statements for the year
ended December 31, 1998, and Note 7 to the unaudited interim financial
statements for the period ended June 30, 1999 incorporated herein by
reference.
For purposes of computing the ratios of earnings to fixed charges,
earnings represent income (loss) before income taxes and fixed charges. Fixed
charges consist of interest expense and preferred share dividend requirements
of the consolidated subsidiary.
Use of Proceeds
Unless otherwise indicated in the applicable prospectus supplement, we will
use the net proceeds from the sale of the securities for our general corporate
purposes, which may include repaying indebtedness and funding capital
expenditures, acquisitions and working capital.
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Description of Share Capital
The following description of our share capital is based upon our articles of
incorporation, our by-laws and applicable provisions of law. The following
description is qualified in its entirety by reference to such articles of
incorporation and by-laws, which have been filed as exhibits to earlier
registration statements filed by us with the SEC. See "Where You Can Find More
Information".
Certain provisions of our articles of incorporation and by-laws summarized in
the following paragraphs may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a shareholder
might consider in its best interests, including those attempts that might
result in a premium over the market price for shares held.
Authorized and Outstanding Share Capital
Our authorized share capital consists of an unlimited number of common shares,
an unlimited number of First Preferred shares and an unlimited number of
Second Preferred shares. As of June 30, 1999 there were 13,348,391 common
shares outstanding and no First Preferred shares or Second Preferred shares
outstanding.
Common Shares
Voting Rights
Pursuant to our articles of incorporation and by-laws, the holders of our
common shares are entitled to one vote for each common share held at all
meetings of shareholders other than meetings of another class or series of
shares. However, pursuant to the subordinated guarantee agreement that we
entered into in 1992 when our subsidiary, Chieftain International Funding
Corp., issued its $1.8125 Convertible Redeemable Preferred shares, we have
agreed to use our best efforts, subject to applicable law, to nominate and
cause to be elected to our board of directors two persons designated by the
holders of a majority of the outstanding Chieftain International Funding Corp.
$1.8125 Convertible Redeemable Preferred shares if Chieftain International
Funding Corp. shall have failed to declare and pay dividends on its $1.8125
Convertible Redeemable Preferred shares in the manner required for any six or
more quarterly dividend payments and until all such accumulated and unpaid
dividends are paid in full.
Dividends and Liquidation Rights
The holders of our common shares are entitled to any dividends as
may be declared by the board of directors, subject to the preferential rights
attaching to the First Preferred shares and the Second Preferred shares and
any other of our shares ranking in priority to the common shares. In addition,
pursuant to the subordinated guarantee agreement that we entered into in 1992
when our subsidiary, Chieftain International Funding Corp., issued its $1.8125
Convertible Redeemable Preferred shares, we have agreed that we will not
declare or pay or set apart for payment any dividend on any of our share
capital and that no other distribution shall be paid or declared and set apart
for payment and no other distribution shall be made upon any of our share
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capital unless (a) the full cumulative dividends on all outstanding $1.8125
Convertible Redeemable Preferred shares have been paid, (b) sufficient funds
have been set apart for the payment of dividends for the then current period
on the $1.8125 Convertible Redeemable Preferred shares and (c) the full
redemption price for the $1.8125 Convertible Redeemable Preferred shares which
have been called for redemption has been paid or set apart for payment in
accordance with the certificate of designation for the $1.8125 Convertible
Redeemable Preferred shares.
In the event of our liquidation, dissolution or winding up, the holders of our
common shares are entitled, subject to the rights of the holders of our shares
ranking in priority to the common shares, to participate ratably among
themselves, and ratably with the holders of any shares ranking on a parity
with the common shares, in any distribution of our assets remaining after the
payment of all our liabilities.
Other Provisions
There are no preemptive rights to subscribe for any additional securities
which we may issue, and there are no redemption provisions or sinking fund
provisions applicable to the common shares. All outstanding common shares are
legally issued, fully paid and nonassessable.
Transfer Agents and Registrars
The transfer agent and registrar for the common shares of Chieftain in Canada
is the CIBC Mellon Trust Company at its principal office located in each of
the cities of Calgary, Vancouver, Winnipeg and Toronto. The transfer agent and
registrar for the common shares of Chieftain in the United States is
ChaseMellon Shareholder Services of New York at its principal office located
in the City of New York.
Preferred Shares
Pursuant to our articles of incorporation and by-laws, we are authorized to
issue one or more series of First Preferred shares and Second Preferred
shares. The First Preferred shares and the Second Preferred shares are alike
in all respects except that any First Preferred shares have a preference over
the Second Preferred shares upon our liquidation, dissolution or winding up or
in respect of payment of any dividends thereon.
Either the First Preferred shares or the Second Preferred shares may be issued
in one or more series. Each series may consist of the number of shares as may
be determined by our board of directors. Our board of directors may, by
resolution, fix the designation, rights, privileges, restrictions and
conditions attaching to the preferred shares of each series including:
o the rate of preferential dividends;
o the dates of payment of dividends;
o the terms and conditions of redemption, purchase or conversion, if
any; and
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o any sinking fund or other provisions.
The holders of preferred shares are not entitled, as such, to receive notice
of or to vote at any meeting of our common shareholders except as may be
required by law.
The preferred shares of each series will rank on a parity with the preferred
shares of every other series of the same class. They will be entitled to
preference over our common shares and any other shares ranking junior to them
with respect to priority in payment of dividends and to the distribution of
assets or return of capital in the event of our liquidation, dissolution or
winding up, or any other distribution of the assets or return of capital among
our shareholders for the purpose of winding up our affairs. However, pursuant
to the subordinated guarantee agreement that we entered into in 1992 when our
subsidiary, Chieftain International Funding Corp., issued its $1.8125
Convertible Redeemable Preferred shares, we may not pay dividends on our
preferred shares until the payment of dividends on the $1.8125 Convertible
Redeemable Preferred shares has been provided for. See "Common
Shares--Dividends and Liquidation Rights" for more information. In the event
of our liquidation, dissolution, winding up or other distribution of our
assets or return of capital, the holders of the preferred shares will be
entitled to receive, in priority to the holders of our common shares and any
other shares ranking junior to the preferred shares, the amount paid up on the
preferred shares and all accrued and unpaid dividends. The holders of the
preferred shares will not be entitled to share in any further distribution of
our property or assets.
The applicable prospectus supplement will describe the terms of any series of
preferred shares being offered, including:
o the number of shares and designation or title of the shares;
o any liquidation preference per share;
o any redemption, repayment or sinking fund provisions;
o any dividend rate or rates and the dates of payment (or the method
for determining the dividend rates or dates of payment);
o any voting rights;
o the currency or currencies, including composite currencies in which
the preferred shares are denominated and/or in which payments will
or may be payable;
o the method by which amounts in respect of the preferred shares may
be calculated and any commodities, currencies or indices, or value,
rate or price, relevant to such calculation;
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o whether the preferred shares are convertible or exchangeable and, if
so, the securities or rights into which the preferred shares are
convertible or exchangeable, and the terms and conditions of
conversion or exchange;
o the place or places where dividends and other payments on the
preferred shares will be payable;
o any conditions or restrictions on the creation and the issuance of
any additional shares; and
o any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
The transfer agent for each series of preferred shares will be described in
the applicable prospectus supplement.
Anti-takeover effects of provisions of our Articles of Incorporation and
By-laws.
Our articles of incorporation and by-laws provide that our directors shall be
elected and retire in rotation. Directors are elected to three year terms and
only one-third of the directors stands for election in a given year. In
addition, our board of directors has the ability to designate the terms of,
and to issue new series of, preferred shares. These provisions may have the
effect of discouraging unsolicited takeover proposals that our common
shareholders might consider to be in their best interests and that otherwise
could involve payment to our common shareholders of a premium over prevailing
market prices for their common shares.
Our Rights Plan
Pursuant to our shareholder rights plan, one right to purchase additional
common shares attaches to each of our common shares. In addition, one
convertible right attaches to each $1.8125 Convertible Redeemable Preferred
share of Chieftain International Funding Corp. Each convertible right entitles
its holder to receive one right to purchase additional common shares for each
whole common share issued upon conversion of such convertible preferred share
into our common shares. The rights and the convertible rights trade
automatically with their respective shares and become exercisable under the
circumstances described below. Until a right is exercised, the holder of the
right, as such, will have no rights as a shareholder, including the right to
vote or receive dividends.
Certain Effects of our Rights Plan
Our rights plan is designed to protect our shareholders in the event of
unsolicited offers to acquire us and other coercive takeover tactics. The
primary purpose of our rights plan is to ensure that any bid for our common
shares, in the context of a takeover, will be made for all our common shares,
at the same price, and with sufficient time for our common shareholders to
fully consider the bid. The provisions of our rights plan may render an
unsolicited takeover of us more difficult or less likely to occur or might
prevent such a takeover, even though such a
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takeover may offer our common shareholders the opportunity to sell their
common shares at a price above the prevailing market rate and may be favored
by a majority of our common shareholders. See "Risk Factors--Our shareholder
rights plan and by-laws discourage unsolicited takeover proposals and could
prevent you from realizing a premium for your common shares."
Summary of Principal Attributes of our Rights Plan
The following is a general summary of the terms of our rights plan, which is
qualified in its entirety by reference to the text of the rights plan
agreement.
(a) One right to purchase common shares on the terms and conditions set
forth in the rights plan agreement is issued at no cost and attaches
to each outstanding common share.
(b) One convertible right entitling the holder to receive one right for
each whole common share issued on conversion of a $1.8125
Convertible Redeemable Preferred share of Chieftain International
Funding Corp., which is convertible into our common shares, is
issued at no cost and attaches to each such outstanding convertible
preferred share.
(c) Until the "separation time" (the eighth trading day following the
earlier of (1) the date on which a person or group of people acquire
beneficial ownership (as defined in the rights plan) of 25% or more
of our common shares (an "acquiring person") and (2) the
commencement date of a takeover bid which is not a Permitted Bid (as
defined below)), rights trade with the common shares to which they
are attached, have no value and may not be exercised.
(d) At the separation time, rights separate and trade separately from
the common shares and, promptly following the separation time,
separate certificates evidencing the rights are mailed to holders of
record of our common shares and, as applicable, to the holders of
record of the $1.8125 Convertible Redeemable Preferred shares of
Chieftain International Funding Corp. as of the separation time. In
addition, after the separation time, each right (other than any
rights held by the acquiring person) may be exercised to acquire, on
payment of the exercise price, common shares having an aggregate
market value equal to twice the exercise price. The initial exercise
price of a right is Cdn. $80 or the U.S.$ equivalent thereof (the
"exercise price") and is subject to certain adjustments. Where a
takeover bid that is not a Permitted Bid or a Competing Permitted
Bid (as defined below) is withdrawn after the separation time, our
board of directors may elect to redeem all the outstanding rights at
a price of Cdn. $0.001. Upon such redemption, the rights plan will
continue in effect as if the separation time had never occurred.
(e) A Permitted Bid is an offer:
o that is open for a minimum of 90 days;
o that is made to acquire all of our outstanding common shares;
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o that is made by an offeror holding not more than 10% of our
common shares;
o pursuant to which the offeror agrees not to acquire any
additional common shares unless 50% or more of the shares not
held by the offeror are tendered, failing which the offer will
be void; and
o which, if successful, allows shareholders who have not already
tendered their shares a further 10 business days in which to do
so.
(f) A Competing Permitted Bid has the same requirements as a Permitted
Bid except that a Competing Permitted Bid must remain open for the
greater of 21 days and the time then remaining under the outstanding
Permitted Bid. The reduction in the acceptance time for a Competing
Permitted Bid is intended to allow, to the extent possible, all
takeover bids to be considered by our common shareholders within the
same time period.
(g) The shareholder rights plan has a term of 10 years from February 23,
1994.
General Impact of our Rights Plan
Our rights plan should not deter a person from acquiring control of us if that
person is prepared to make a takeover bid pursuant to the Permitted Bid or
Competing Permitted Bid requirements. However, if an acquiring person makes a
bid to acquire 25% or more of our common shares, other than by a Permitted Bid
or Competing Permitted Bid, holders of rights, other than the acquiring
person, may acquire additional common shares at a 50% discount to the then
prevailing market price. As a result, it is unlikely that any person will
acquire 25% or more of our outstanding common shares other than by way of a
Permitted Bid or a Competing Permitted Bid.
The proxy mechanism of the Business Corporations Act (Alberta) is not affected
by our rights plan, and a shareholder may use his statutory rights thereunder
to promote a change in our management or direction. Under the Business
Corporations Act (Alberta), shareholders holding not less than 5% of a
company's outstanding shares that carry the right to vote at a meeting may
requisition the board of directors of that company to call a meeting of
shareholders.
Description of Debt Securities
This section describes the general terms and provisions of the debt securities
that we may issue under the shelf registration statement. The prospectus
supplement will describe the specific terms of the debt securities offered by
that prospectus supplement.
We may issue debt securities either separately or together with, or upon the
conversion of, or in exchange for, other securities. The debt securities are
to be either our senior obligations, issued in one or more series and referred
to herein as the "senior debt securities," or subordinated obligations issued
in one or more series and referred to herein as the "subordinated debt
securities." The senior debt securities and the subordinated debt securities
are collectively
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referred to as the "debt securities." We will issue each series of debt
securities under an "indenture" to be entered into by us and a "trustee,"
qualified under the Trust Indenture Act of 1939. The name of the trustee will
be set forth in the applicable prospectus supplement.
The indenture will be subject to and governed by the Trust Indenture Act of
1939.
Specific Terms of Each Series of Debt Securities in the Prospectus Supplement
The applicable prospectus supplement will describe the terms of any debt
securities being offered, including:
o the designation, aggregate principal amount and authorized
denominations;
o whether the debt securities are senior debt securities or
subordinated debt securities;
o the maturity date;
o the interest rate, if any, and the method for calculating the
interest rate;
o the interest payment dates and the record dates for the interest
payments;
o any mandatory or optional redemption terms or prepayment,
conversion, sinking fund or exchangeability or convertibility
provisions;
o the places where the principal and interest will be payable;
o if other than denominations of $1,000 or multiples of $1,000, the
denominations the debt securities will be issued in;
o whether the debt securities will be issued in the form of global
securities or certificates;
o additional provisions, if any, relating to the defeasance and
covenant defeasance of the debt securities;
o whether the debt securities will be issuable in registered form or
bearer form or both and, if bearer securities are issuable, any
restrictions applicable to the exchange of one form for another and
the offer, sale and delivery of bearer securities;
o any applicable material federal tax consequences;
o the dates on which a premium, if any, will be payable;
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o our right, if any, to defer payment of interest and the maximum
length of such deferral period;
o any listing on a securities exchange;
o if convertible into common shares or preferred shares, the terms on
which such debt securities are convertible;
o the terms, if any, of any guarantee of the payment of principal of,
and premium, if any, and interest on debt securities of the series
and any corresponding changes to the provisions of the indenture as
currently in effect;
o the terms, if any, of the transfer, mortgage, pledge, or assignment
as security for the debt securities of the series of any properties,
assets, moneys, proceeds, securities or other collateral, including
whether certain provisions of the Trust Indenture Act are
applicable, and any corresponding changes to provisions of the
indenture as currently in effect;
o if the purchase price of any debt securities is payable in a
currency other than U.S. dollars or if principal of, or premium, if
any, or interest on any of the debt securities is payable in any
currency other than U.S. dollars, the specific terms and other
information with respect to such debt securities and such foreign
currency;
o the initial public offering price; and
o other specific terms, including covenants and the events of default
provided for with respect to the debt securities.
Debt securities may be issued with original issue discount to be sold at a
substantial discount below their principal amount. They may include "zero
coupon" securities that do not pay any cash interest for the entire term of
the securities. In the event of an acceleration of the maturity of any
original issue discount security, the amount payable to the holder thereof
upon such acceleration will be determined in the manner described in the
applicable prospectus supplement. Conditions pursuant to which payment of the
principal of the subordinated debt securities may be accelerated will be set
forth in the applicable prospectus supplement. Material federal income tax and
other considerations applicable to original issue discount securities will be
described in the applicable prospectus supplement.
Covenants
Under the indenture, we will be required to:
o pay the principal, interest and any premium on the debt securities
when due;
o maintain a place of payment;
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o deliver a report to the trustee at the end of each fiscal year
reviewing our obligations under the indenture; and
o deposit sufficient funds with any paying agent on or before the due
date for any principal, interest or any premium.
Any particular series of debt securities may contain covenants limiting:
o the incurrence of additional debt (including guarantees) by us and
our subsidiaries;
o the making of certain payments by us and our subsidiaries;
o our business activities and those of our subsidiaries;
o the issuance of other securities by our subsidiaries;
o asset dispositions;
o transactions with our subsidiaries and other affiliates;
o a change of control;
o the incurrence of liens; and
o certain mergers and consolidations involving us and our
subsidiaries.
Any additional covenants will be described in the applicable prospectus
supplement.
Registration, Transfer, Payment and Paying Agent
Unless otherwise indicated in a prospectus supplement, each series of debt
securities will be issued in registered form only, without coupons. The
indenture, however, provides that we may also issue debt securities in bearer
form only, or in both registered and bearer form. Bearer securities shall not
be offered, sold, resold or delivered in connection with their original
issuance in the United States or to any United States person other than
offices located outside the United States of certain United States financial
institutions.
Principal, interest and any premium on fully registered securities will be
paid at the office of the paying agent that we may designate. We will make
payment by check mailed to persons in whose names the debt securities are
registered on days specified in the indenture or any prospectus supplement.
Debt security payments in other forms will be paid at a place designated by us
and specified in a prospectus supplement.
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Fully registered securities may be transferred or exchanged at the corporate
trust office of the trustee or at any other office or agency maintained by us
for these purposes, without payment of any service charge, except for any tax
or governmental charge.
Ranking of Debt Securities
The senior debt securities will be our unsubordinated obligations and will
rank equally in right of payment with all of our other unsubordinated
indebtedness. The subordinated debt securities will be subordinated in right
of payment to all existing and future senior indebtedness as set forth in the
applicable prospectus supplement.
Global Securities
The debt securities of a series may be issued in whole or in part in the form
of one or more global securities that will be deposited with, or on behalf of,
a "depositary" identified in the prospectus supplement relating to such
series. Unless and until it is exchanged in whole or in part for individual
certificates evidencing debt securities, a global debt security may not be
transferred except as a whole (1) by the depositary to a nominee of such
depositary, (2) by a nominee of such depositary to such depositary or another
nominee of such depositary or (3) by such depositary or any such nominee to a
successor of such depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
global debt securities and certain limitations and restrictions relating to a
series of global bearer securities will be described in the prospectus
supplement.
Discharging Our Obligations
Except as may otherwise be set forth in any prospectus supplement, we may
choose to either discharge our obligations on the debt securities of any
series in a legal defeasance or release ourselves from our covenant
restrictions on the debt securities of any series in a covenant defeasance. We
may do so at any time prior to the stated maturity or redemption of the debt
securities of the series if, among other conditions:
o we deposit with the trustee sufficient cash or U.S. government
securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or redemption date of the debt
securities of the series; and
o we provide an opinion of our counsel that holders of the debt
securities will not be affected for U.S. federal income tax purposes
by the defeasance.
If we choose the legal defeasance option, holders of the debt securities of
that series will not be entitled to the benefits of the indenture except for
registration of transfer and exchange of debt securities, replacement of lost,
stolen or mutilated debt securities, any required conversion or exchange of
debt securities, any required sinking fund payments and receipt of principal
and interest on the original stated due dates or specified redemption dates.
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Book-Entry, Delivery and Form
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company, New York, New York ("DTC") will act as depositary. Book-entry debt
securities of a series will be issued in the form of a global debt security
that will be deposited with DTC. This means that we will not issue
certificates to each holder. One global debt security will be issued to DTC
who will keep a computerized record of its participants (for example, your
broker) whose clients have purchased the debt securities. The participant will
then keep a record of its clients who purchased the debt securities. Unless it
is exchanged in whole or in part for a certificated debt security, a global
debt security may not be transferred; except that DTC, its nominees and their
successors may transfer a global debt security as a whole to one another.
Beneficial interests in global debt securities will be shown on, and transfers
of global debt securities will be made only through, records maintained by DTC
and its participants.
DTC has provided us with the following information: DTC 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
United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the provisions of Section 17A of the Securities Exchange Act
of 1934. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also records the settlement among Direct Participants of
securities transactions, such as transfers and pledges, in deposited
securities through computerized records for Direct Participant's accounts.
This eliminates the need to exchange certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and some other organizations.
DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work through a Direct
Participant. The rules that apply to DTC and its participants are on file with
the SEC.
DTC 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.
We will wire principal and interest payments to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of the global debt securities
for all purposes. Accordingly, we, the trustee and any paying agent will have
no direct responsibility or liability to pay amounts due on the global debt
securities to owners of beneficial interests in the global debt securities.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit Direct Participants' accounts on the payment date
according to their respective holdings of beneficial interests in the global
debt securities as shown on DTC's records. In addition, it is DTC's current
practice to assign any consenting or voting rights to Direct Participants
whose accounts are credited with debt securities on a record date, by using an
omnibus proxy. Payments by participants to owners of beneficial interests in
the global debt securities, and voting by
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participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with debt
securities held for the account of customers registered in "street name."
However, payments will be the responsibility of the participants and not of
DTC, the trustee or us.
Debt securities represented by a global debt security will be exchangeable for
certificated debt securities with the same terms in authorized denominations
only if:
o DTC notifies us that it is unwilling or unable to continue as
depositary or if DTC ceases to be a clearing agency registered under
applicable law and a successor depositary is not appointed by us
within 90 days; or
o We determine not to require all of the debt securities of a series
to be represented by a global debt security and notify the trustee
of our decision.
Modification of Indenture
Under the indenture, generally we and the trustee will be able to modify our
rights and obligations and the rights of the holders with the consent of the
holders of a specified percentage of the outstanding holders of each series of
debt affected by the modification. No modification of the principal or
interest payment terms, and no modification reducing the percentage required
for modifications, will be effective against any holder without its consent.
In addition, we and the trustee will be able to amend the indenture without
the consent of any holder of the debt securities to make technical changes.
The Trustees
The Trust Indenture Act contains limitations on the rights of a trustee,
should it become a creditor of ours, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect of any such
claims, as security or otherwise. Each trustee is permitted to engage in other
transactions with us and our subsidiaries from time to time, provided that if
such Trustee acquires any conflicting interest it must eliminate such conflict
upon the occurrence of an event of default under the relevant indenture, or
else resign.
Description of Warrants
We may issue warrants for the purchase of debt securities, preferred shares or
common shares. Warrants may be issued independently or together with debt
securities, preferred shares or common shares offered by any prospectus
supplement and may be attached to or separate from any such offered
securities. Each series of warrants will be issued under a separate warrant
agreement to be entered into between us and a bank or trust company, as
warrant agent. The warrant agent will act solely as our agent in connection
with the warrants and will not assume any obligation or relationship of agency
or trust for or with any holders or beneficial owners of warrants. The
following summary of certain provisions of the warrants does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
provisions of the
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warrant agreement that will be filed with the SEC in connection with the
offering of such warrants.
Debt Warrants
The prospectus supplement relating to a particular issue of debt warrants will
describe the terms of such debt warrants, including the following:
o the title of such debt warrants;
o the offering price for such debt warrants, if any;
o the aggregate number of such debt warrants;
o the designation and terms of the debt securities that may be
purchased upon exercise of such debt warrants;
o if applicable, the designation and terms of the debt securities with
which such debt warrants are issued and the number of such debt
warrants issued with each such debt security;
o if applicable, the date from and after which such debt warrants and
any debt securities issued therewith will be separately
transferable;
o the principal amount of debt securities that may be purchased upon
exercise of a debt warrant and the price at which such principal
amount of debt securities may be purchased upon exercise (which
price may be payable in cash, securities, or other property);
o the date on which the right to exercise such debt warrants shall
commence and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such debt warrants
that may be exercised at any one time;
o whether the debt warrants represented by the debt warrant
certificates or debt securities that may be issued upon exercise of
the debt warrants will be issued in registered or bearer form;
o information with respect to book-entry procedures, if any;
o the currency or currency units in which the offering price, if any,
and the exercise price are payable;
o if applicable, a discussion of material United States federal income
tax considerations;
o the antidilution provisions of such debt warrants, if any;
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o the redemption or call provisions, if any, applicable to such debt
warrants; and
o any additional terms of such debt warrants, including terms,
procedures, and limitations relating to the exchange and exercise of
such debt warrants.
Share Warrants
The prospectus supplement relating to any particular issue of preferred share
warrants or common share warrants will describe the terms of such warrants,
including the following:
o the title of such warrants;
o the offering price for such warrants, if any;
o the aggregate number of such warrants;
o the designation and terms of the common shares or preferred shares
that may be purchased upon exercise of such warrants;
o if applicable, the designation and terms of the offered securities
with which such warrants are issued and the number of such warrants
issued with each such offered security;
o if applicable, the date from and after which such warrants and any
offered securities issued therewith will be separately transferable;
o the number of common shares or preferred shares that may be
purchased upon exercise of a warrant and the price at which such
shares may be purchased upon exercise;
o the date on which the right to exercise such warrants shall commence
and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such warrants that
may be exercised at any one time;
o the currency or currency units in which the offering price, if any,
and the exercise price are payable;
o if applicable, a discussion of material United States federal income
tax considerations;
o the antidilution provisions of such warrants, if any;
o the redemption or call provisions, if any, applicable to such
warrants; and
o any additional terms of such warrants, including terms, procedures
and limitations relating to the exchange and exercise of such
warrants.
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Plan of Distribution
The distribution of the securities may be effected from time to time in one or
more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Each prospectus
supplement will describe the method of distribution of the securities offered
therein.
Chieftain may sell securities directly, through agents designated from time to
time, through underwriting syndicates led by one or more managing underwriters
or through one or more underwriters acting alone. Each prospectus supplement
will describe the terms of the securities to which such prospectus supplement
relates, the name or names of any underwriters or agents with whom we have
entered into arrangements with respect to the sale of such securities, the
public offering or purchase price of such securities and the net proceeds we
will receive from such sale. In addition, each prospectus supplement will
describe any underwriting discounts and other items constituting underwriters'
compensation, any discounts and commissions allowed or paid to dealers, if
any, any commissions allowed or paid to agents, and the securities exchange or
exchanges, if any, on which such securities will be listed. Dealer trading may
take place in certain of the securities, including securities not listed on
any securities exchange.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters or agents to solicit offers by certain institutions to purchase
securities from us pursuant to delayed delivery contracts providing for
payment and delivery at a future date. Institutions with which such contracts
may be made include, among others:
o commercial and savings banks;
o insurance companies;
o pension funds;
o investment companies; and
o educational and charitable institutions.
In all cases, such institutions must be approved by us. Unless otherwise set
forth in the applicable prospectus supplement, the obligations of any
purchaser under any such contract will not be subject to any conditions except
that (a) the purchase of the securities will not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject and (b) if the securities are also being sold to underwriters acting
as principals for their own account, the underwriters will have purchased such
securities not sold for delayed delivery. The underwriters and such other
persons will not have any responsibility in respect of the validity or
performance of such contracts.
Any underwriter or agent participating in the distribution of the securities
may be deemed to be an underwriter, as that term is defined in the Securities
Act, of the securities so offered and sold
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and any discounts or commission received by them, and any profit realized by
them on the sale or resale of the securities may be deemed to be underwriting
discounts and commissions under the Securities Act.
Certain of any such underwriters and agents including their associates, may
engage in transactions with and perform services for us and our subsidiaries
in the ordinary course of business. One or more of our affiliates may from
time to time act as an agent or underwriter in connection with the sale of the
securities to the extent permitted by applicable law. The participation of any
such affiliate in the offer and sale of the securities will comply with Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. regarding the offer and sale of securities of an affiliate.
Except as indicated in the applicable prospectus supplement, the securities
are not expected to be listed on a securities exchange, except for the common
shares, which are listed on the American Stock Exchange and The Toronto Stock
Exchange, and any underwriters or dealers will not be obligated to make a
market in securities. We cannot predict the activity or liquidity of any
trading in the securities.
Legal Matters
The validity of the securities in respect of which this prospectus is being
delivered will be passed on for us by Bennett Jones, Calgary, Alberta. Certain
other legal matters in connection with the securities will be passed on for us
by Cravath, Swaine & Moore, New York, New York.
Experts
The audited financial statements incorporated by reference in this prospectus
have been audited by PricewaterhouseCoopers LLP, as indicated in their report
with respect to such audited financial statements, and are incorporated by
reference in reliance upon the authority of such firm as experts in giving
such reports. PricewaterhouseCoopers LLP is located at 1501 TD Tower, 10088 -
102 Avenue, Edmonton, Alberta, Canada, T5J 2Z1. The reserve estimates,
relating to our U.S. reserves, of Netherland, Sewell & Associates, Inc.
incorporated by reference in this prospectus have been incorporated by
reference in reliance upon the authority of such firm as experts in petroleum
engineering.
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PART II
INFORMATION NOT REQUIRED TO BE IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth fees payable to the Securities and Exchange
Commission and other estimated expenses expected to be incurred in connection
with the issuance and distribution of the securities being registered. All
such fees and expenses shall be paid by Chieftain:
Securities and Exchange Commission Registration Fee..... $ 83,400
Legal Fees and Expenses ................................ 100,000
Accounting Fees and Expenses............................ 10,000
Miscellaneous........................................... 25,000
----------
Total............................................... $218,400
==========
Item 15. Indemnification of Directors and Officers
Section 119.(1) of the Business Corporations Act (Alberta) provides as
follows:
119.(1) Indemnification by corporation. Except in respect of an action by or
on behalf of the corporation or body corporate to procure a judgment in its
favor, a corporation may indemnify a director or officer of the corporation, a
former director or officer of the corporation or a person who acts or acted at
the corporation's request as a director or officer of a body corporate of
which the corporation is or was a shareholder or creditor, and his heirs and
legal representatives, against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by
him in respect of any civil, criminal or administrative action or proceeding
to which he is made a party by reason of being or having been a director or
officer of that corporation or body corporate, if
(a) he acted honestly and in good faith with a view to the best
interests of the corporation, and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
(2) A corporation may with the approval of the Court indemnify a person
referred to in subsection (1) in respect of an action by or on behalf of the
corporation or body corporate to procure a judgment in its favor, to which he
is made a party by reason of being or having been a director or an officer of
the corporation or body corporate, against all costs, charges and
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expenses reasonably incurred by him in connection with the action if he
fulfills the conditions set out in subsections (1)(a) and (b).
(3) Notwithstanding anything in this section, a person referred to in
subsection (1) is entitled to indemnity from the corporation in respect of all
costs, charges and expenses reasonably incurred by him in connection with the
defense of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of being or having been a director or officer of
the corporation or body corporate, if the person seeking indemnity
(a) was substantially successful on the merits in his defense of the
action or proceeding,
(b) fulfills the conditions set out in subsection (1)(a) and (b), and
(c) is fairly and reasonably entitled to indemnity.
(4) A corporation may purchase and maintain insurance for the benefit of any
person referred to in subsection (1) against any liability incurred by him
(a) in his capacity as a director or officer of the corporation,
except when the liability relates to his failure to act honestly and in
good faith with a view to the best interests of the corporation, or
(b) in his capacity as a director or officer of another body
corporate if he acts or acted in that capacity at the corporation's
request, except when the liability relates to his failure to act honestly
and in good faith with a view to the best interests of the body
corporate.
(5) A corporation or a person referred to in subsection (1) may apply to the
Court for an order approving an indemnity under this section and the Court may
so order and make any further order it thinks fit.
(6) On an application under subsection (5), the Court may order notice be
given to any interested person and that person is entitled to appear and be
heard in person or by counsel.
Section Seven of Chieftain's by-laws, adopted in November 1988, contains the
following provisions with respect to indemnification of Chieftain's officers
and directors (the "Act" meaning the Business Corporations Act (Alberta) and
the "Corporation" meaning Chieftain):
7.01 Conflict of Interest. A director or officer shall not be disqualified
from his office, or be required to vacate his office, by reason only that he
is a party to, or is a director or officer of or has a material interest in
any person who is a party to, a material contract or proposed material
contract with the Corporation or a subsidiary thereof. Such a director or
officer shall, however, disclose the nature and extent of his interest in the
contract at the time and in the manner provided by the Act. Subject to the
provisions of the Act, a director or officer shall not by reason only of his
office be accountable to the Corporation or to its shareholders for any profit
or gain realized from such a contract or transaction, and such contract or
transaction shall not be void or voidable by reason only of the director's or
officer's interest therein, provided that the
II-2
<PAGE>
required declaration and disclosure of interest are properly made, the
contract or transaction is approved by the board of shareholders, if
necessary, and it is fair and reasonable to the Corporation at the time it was
approved and, if required by the Act, the director refrains from voting as a
director on the contract or transaction.
7.02 Limitation of Liability. Every director and officer of the Corporation in
exercising his powers and discharging his duties shall act honestly and in
good faith with a view to the best interests of the Corporation and exercise
the care, diligence and skill that a reasonably prudent person would exercise
in comparable circumstances. Subject to the foregoing, no director or officer
for the time being of the Corporation shall be liable for the acts, neglects
or defaults of any other director or officer or employee, or for joining in
any act for conformity, or for any loss, damage or expense happening to the
Corporation through the insufficiency or deficiency of title to any property
acquired by the Corporation or for or on behalf of the Corporation or for the
insufficiency or deficiency of any security in or upon which any of the moneys
of or belonging to the Corporation shall be placed or invested, or for any
loss or damage arising from the bankruptcy, insolvency or tortious act of any
person, firm or corporation including any person, firm or corporation with
whom or with which any moneys, securities or effects shall be lodged or
deposited, or for any loss, conversion, misapplication or misappropriation of
or any damage resulting from any dealings with any moneys, securities or other
assets of or belonging to the Corporation or for any other loss, damage or
misfortune whatsoever which may happen in the execution of the duties of his
respective office or trust or in relation thereto; provided, however, that
nothing herein shall relieve any director or officer from the duty to act in
accordance with the Act or from a liability for any breach thereof. The
directors for the time being of the Corporation shall not be under any duty or
responsibility in respect of any contract, act or transaction whether or not
made, done or entered into in the name of or on behalf of the Corporation,
except such as shall have been submitted to and authorized or approved by the
board.
No act or proceeding of any director or officer or the board shall be deemed
invalid or ineffective by reason of the subsequent ascertainment of any
irregularity in regard to such act or proceeding or the qualification of such
director or officer or board.
7.03 Indemnity. Subject to the Act, the Corporation shall indemnify a director
or officer of the Corporation, a former director or officer of the
Corporation, and a person who acts or acted at the Corporation's request as a
director or officer of a body corporate of which the Corporation is or was a
shareholder or creditor, if:
(a) he acted honestly and in good faith with a view to the best
interests of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
Every employee of the Corporation, other than an employee who is a director or
officer of the Corporation, and his heirs and legal representatives shall be
indemnified by the Corporation against all costs, charges and expenses,
including any amount paid to settle any action or satisfy
II-3
<PAGE>
any judgment, which any such employee or his heirs or legal representatives
shall incur or become liable to pay, by reason of any contract entered into or
any act or thing done by him as an employee or in any way relating to the
discharge or execution of his duties, excepting any cost, charges or expenses
as are occasioned as a result of the fraud, dishonesty, willful neglect or
default of such employee.
The Corporation shall also indemnify such persons in such other circumstances
as the Act permits or requires. Nothing in this Section shall limit the right
of any person entitled to indemnity to claim indemnity apart from the
provisions of this Section or, subject to the Act, be construed as a
limitation upon the right of the Corporation to exercise its general power to
enter into a contract or undertaking of indemnity with or for the benefit of
any director, officer, employee or agent in any proper case not provided for
in these by-laws.
7.04 Insurance. The Corporation may purchase and maintain insurance for the
benefit of any person referred to in Section 7.03 against any liability
incurred by him:
(a) in his capacity as a director or officer of the Corporation,
except when the liability relates to his failure to act honestly and in
good faith with a view to the best interests of the Corporation;
(b) in his capacity as a director or officer of another body
corporate if he acts or acted in that capacity at the Corporation's
request, except when the liability relates to his failure to act honestly
and in good faith with a view to the best interests of the body
corporate; or
(c) in respect of an employee or agent who is not a director or
officer of the Corporation, in his capacity as an employee or agent of
the Corporation, except when the liability relates to his fraud,
dishonesty, willful neglect or default.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits. See the Exhibit Index following the signature pages to this
Registration Statement.
(b) Financial Statement Schedules. None.
Item 17. Undertakings
(a) Undertaking Pursuant to Rule 415:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
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<PAGE>
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(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 end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement;
(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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents by Reference:
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Undertaking in Respect of Indemnification:
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expense incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action,
II-5
<PAGE>
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(d) Undertaking Pursuant to Rule 430A:
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
(e) Undertaking Regarding Qualification of Trust Indentures Under the Trust
Indenture Act of 1939 for Delayed Offerings:
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Chieftain
International, Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Edmonton, Province of
Alberta, Canada, on October 18, 1999.
CHIEFTAIN INTERNATIONAL, INC.
By: /s/ Edward L. Hahn
------------------------------
Name: Edward L. Hahn
Title: Senior Vice President, Finance
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
Signature Title Date
* President, Chief Executive October 18, 1999
- ----------------------- Officer and Director
Stanley A. Milner (Principal Executive Officer)
/s/ Edward L. Hahn Senior Vice President, Finance October 18, 1999
- ----------------------- and Treasurer
Edward L. Hahn (Principal Financial Officer)
* Vice President and Controller October 18, 1999
- ----------------------- (Principal Accounting Officer)
Ronald J. Stefure
* Director and Authorized October 18, 1999
- ----------------------- Representative in the United
Stephen C. Hurley States
* Director October 18, 1999
- -----------------------
Hugh J. Kelly
* Director October 18, 1999
- -----------------------
John E. Maybin
Director
- -----------------------
David E. Mitchell
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<PAGE>
2
Signature Title Date
* Director October 18, 1999
- -----------------------
Louis G. Munin
* Director October 18, 1999
- -----------------------
Esther S. Ondrack
* Director October 18, 1999
- -----------------------
Stuart T. Peeler
*By: /s/ Edward L. Hahn
-------------------
Edward L. Hahn
Attorney-in-fact
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Document and Description
1** Form of Underwriting Agreement between Chieftain and the
underwriters named therein
4.1*** Form of Indenture
4.2** Form of Warrant Agreement
4.3**** Shareholder Rights Plan Agreement
5.1*** Opinion of Bennett Jones
5.2*** Opinion of Cravath, Swaine & Moore
12* Calculation of ratios of earnings to fixed charges
23.1*** Consent of Independent Accountants
23.2*** Consent of Independent Petroleum Engineers and Geologists
23.3*** Consent of Bennett Jones (included in Exhibit 5.1)
23.4*** Consent of Cravath, Swaine & Moore (included in Exhibit 5.2)
24*** Power of Attorney
25** Statement on Form T-1 of Eligibility of trustee for the debt
securities
- -------------
* Filed herewith
** To be filed by amendment
*** Previously filed
**** Incorporated by reference to Chieftain's Form 8-K filed with the SEC
on May 31, 1994
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<TABLE>
EXHIBIT 12
<CAPTION>
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(CANADIAN GAAP)
Six Months Ended
June 30, Year Ended December 31,
-------------------- ------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ----------
(U.S. $ in thousands, except ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes and
dividends on preferred shares of a
subsidiary............................. $ (16,660) $ 2,542 $ (5,522) $ 17,471 $ 15,987 $ (617) $(14,326)
Fixed charges............................. 5,361 4,887 7,397 8,498 8,075 3,934 7,431
Preferred share dividend requirement
of a consolidated subsidiary........... (4,160) (4,862) (6,635) (8,498) (8,075) (3,934) (7,431)
-------- -------- -------- --------- -------- ------- --------
Earnings (loss) before income taxes and
fixed charges, as adjusted............. $ (15,459) $ 2,567 $ (4,760) $ 17,471 $ 15,987 $ (617) (14,326)
======== ======== ======== ======== ======= ======= =========
Interest incurred......................... $ 1,201 $ 25 $ 762 $ - $ - $ - $ -
Preferred share dividend requirement of
a consolidated subsidiary.............. 4,160 4,862 6,635 8,498 8,075 3,934 7,431
------- ------- -------- --------- ------- ------ -------
Total fixed charges....................... $ 5,361 $ 4,887 $ 7,397 $ 8,498 $ 8,075 $ 3,934 $ 7,431
======= ======= ======= ======== ======== ======= =======
Ratio of earnings to fixed charges........ - - - 2.06 1.98 - -
======= ======= ======= ======== ======== ======= =======
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(U.S. GAAP)
Six Months Ended
June 30, Year Ended December 31,
--------------------- -------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- ---------- --------- --------- --------- ---------- ----------
(U.S. $ in thousands, except ratios)
Income (loss) before income taxes and
dividends on preferred shares of a
subsidiary............................. $(15,568) $(20,764) $(90,440) $ 20,648 $ 18,368 $ (4,582) $(13,301)
Fixed charges............................. 5,659 3,728 8,335 8,195 8,146 7,755 7,497
Preferred share dividend requirement of
a consolidated subsidiary.............. (4,458) (3,703) (7,573) (8,195) (8,146) (7,755) (7,497)
-------- -------- --------- -------- -------- -------- ---------
Earnings (loss) before income taxes and
fixed charges, as adjusted............. $(14,367) $(20,739) $(89,678) $ 20,648 $ 18,368 $ (4,582) $(13,301)
======== ======== ======== ======== ======== ======== ========
Interest incurred......................... $ 1,201 $ 25 $ 762 $ - $ - $ - $ -
Preferred share dividend requirement of
a consolidated subsidiary............... 4,458 3,703 7,573 8,195 8,146 7,755 7,497
-------- -------- -------- -------- -------- -------- --------
Total fixed charges....................... $ 5,659 $ 3,728 $ 8,335 $ 8,195 $ 8,146 $ 7,755 $ 7,497
======== ======== ========= ======== ======= ======== ========
Ratio of earnings to fixed charges........ - - - 2.52 2.25 - -
========= ======== ========= ======== ======== ======== ========
</TABLE>
